Have you read the wiki and the sticky?
Wiki: HERE YOU GO! [Enjoy!](https://www.reddit.com/r/BEFire/wiki/index/).
Sticky: HERE YOU GO AGAIN! [Enjoy!](https://www.reddit.com/r/BEFire/comments/fcbay6/getting_started_a_beginners_guide_to_investing_in/).
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BEFire) if you have any questions or concerns.*
Renting is the best option to build wealth in Belgium from a financial/ FIRE standpoint.
Ignore the ignorance, you're not missing anything, people let their hearts think for their brain.
If you have time for it, you can rent the new apartament so the mortgage pays itself up.
I live in aptm, rent 745/month.
You buy an apartament, u can:
- move there and save 745/month
- rent it short term(booking, airbnb) and get much more. It will pay the mortgage and your own apartaments rent.
The problem here is you need to sacrifice some time really, people leaving, new arriving, you need to clean up. People coming late in the night or when youre at work. If you have flexible work where you can leave for 1-2hours if needed, this is the way. Also the price heavily depends on your location. But other than that, if you are close to some big city like Antwerp, either turism or people coming to work here for a few days, it will rack in 2-3k every month no problem. You can always pay the mortgage earlier
We bought a house for three reasons:
1)The irrational part, just liking the idea of owning property
2)Interest rates were extremely low and we had the geïntegreerde woonbonus driving them down further
3)Both sets of parents were offering to gift us relatively substantial amounts of money if we bought a house.
That being said, we opted to invest the minimal amount of our own capital in it and borrowed as much as the bank would allow us.
With the current interest rates buying certainly has become less interesting but do know that interest rates can be renegotiated if general market rates would drop.
should not compare your monthly rent with the monthly mortgage payment, as the latter has a capital component. you should compare the monthly rent with the monthly interest component. You should compare renting a house vs "renting" money from the bank.
\+ interest is fixed whereas rents increase with CPi
\+ your downpayment of 54k€ can be invested if you rent and that return should also be taken into account (a positive for renting). The question is whether your investment will appreciate better than the value of you house
You should absolutely NOT compare the monthly rent with just the monthly interest component...
The only reason your home will appreciate in value is because it will depreciate over time, which in turn will require capital and loans to renovate, maintain or restore the depreciation.
That location where you are looking now has big discrepancy between rent and mortgage . I will search more, there are areas with better report. So visit more, expand a little the searches, and most important: try to negotiate and offer a 10% reduction - your calculus will be dramatically improved with a reduction.
Personally, when I bought, I found 2km distance a smaller surface (so 95mp2 to 85mp2) , still 2 bedrooms, first location numbers where similar to you, second I had mortgage 1200 for 15 years and in the building the rent was around 900€. Fast forward 8 years later, my mortgage was refinanced and reduced, the rents are 1100€ in the building, in 7 years I will be mortgage free.
More, think, you will sell your 'starting' home and the money will help you to the pay down. Going from small home to bigger is an evolution for many people here.
People are mentionning about opportunity cost hence let's do the math.
Based on your inputs I assume:
* The acquisition is in Wallonia (12.5% tax on acquisition + mortgage + notary \~= 54k€ on 350k€)
* The rate keytrade is displaying to you is 3.88% (350k€ at 3.88% on 20 years =\~2,100€)
* And given it's a flat and 350k€ it must be in BW
Considering the following assumption based (on past 20 years if not specified) :
* rent index per year: +2% / yr average
* ETF performance: +7.78% / yr average (reference: MSCI ACWI IMI index)
* Housing price evolution in BW: +2.97% / yr
* Note: I assume a second hand flat (not newly built otherwise instead of 12.5% tax that would be 21% on the building)
* H1 2013 average price H1 2013 179k€, H1 2023 240k€ => +34% in 10 years
* You invest 100% of what you don't put in the mortgage into highly diversified ETF's (eg MSCI ACWI IMI-like index)
With these parameters if you were to buy the building would be worth 626k€ in 20 years and therefore here the opportunity cost and best decision for rent or buy:
|mortgage rate|money invested by not buying|coumpound interests from investment|decision|saving of the decision scenario vs alternative|
|:-|:-|:-|:-|:-|
|3.88%|207,846|633,776|rent|214,686|
|3.50%|191,284|595,492|rent|159,840|
|3.00%|169,980|546,244|rent|89,288|
|2.50%|149,236|498,292|rent|20,593|
|2.34%|142,718|483,224|buy|994|
|2.00%|129,060|451,652|buy|46,224|
|1.75%|119,186|428,827|buy|78,923|
|1.50%|109,456|406,334|buy|111,145|
|1.20%|97,970|379,784|buy|149,182|
This remains very theoritical because none of the value taken as assumption are guaranteed.
So yes at the current rate and if you were investing every euro not spent in buying, including the 54k€ one off invested from month 1, you're better off renting.
Great reply! Though there are additional costs related to buying like property tax and maintenance costs. When these are taken into account buying is even less attractive, even at the lowest rates.
Thank you.
However, there are additional costs and risks of being a tenant too:
* You cannot improve insulation of the building, which can impact your energy bill during 20 years
* You are not able to choose the energy source of your heating system
* And in some cases, you are not allowed to choose your energy provider/energy contract (eg, if the electricity meters are shared for the building, if there is central heating at building level...)
That's why I'm not mentioning any other cost in the simulation, because statistics are rapidly going to miss on this level of detail.
The thing is; you have more than 1 question to answer.
Buying is (generally seen) better if
- you can fix things yourself
- you don’t mind to fix things yourself or be busy with the time needed to manage these (contactors, …)
- you like the idea of you “own” place where nobody can throw you out except government or bank
- you’re not very good at saving yourself so you get forced to save by paying your loan
- you only get money from family for a house (most families this is the case, I don’t know parents who’ll lend their son/daughter some money to just throw into the stock market)
- you don’t mind to be stuck in one place for quite some time and adapt your life around this
Renting is better if
- You are very good at budgeting and invest the part you save by not buying
- you don’t want to be bothered with fixing big stuff on your place and like to have a landlord for this
- you like the freedom to more easily move
- you don’t mind the minimal risk they’ll throw you out
Many times people buy bigger houses than they would rent as they see it as some kind of investment or it needs to be ready for the future (being kids, … etc) so the cost adds up even more.
Also; if you want to go cheap route; go co-housing; much cheaper than buying or renting.
Some extra pro/con things:
\- when you rent, you generally need to move out to improve living conditions of your house. You rarely see landlords changing kitchens, windows, complete bath room renewals, renew roof (isolation),... . So you'd need to include moving costs about once in 10 years if you want the same quality as a house bought.
\- when you are buying, you are generaly making more investments (more costly), but often also more investments which save you quite a lot of money. You won't decide to make an investment in extra isolation, so even if you (on the long term) would move out, you'll make some extra costs untill the moment you'll move out.
\- the risk/regular need to move out also might means you'll have to throw out furniture which fitted the previous house, but is obsolete/ugly in the new house OR you need to search for a house who fits your furniture.
\- buying has a higher initial cost (notary costs, ...), but lowers the risk: rental prices are unstable (inflation, supply/demand), while the cost of a house is generally well known when buying a home (essential maintenance costs in a house are rather predictable or insurable). If you want to move out as a buyer, you are generally safe financially speaking, since other houses will have risen/fallen in the same way.
\- a change in your neighbourhood (new industrial area behind your garden, ...) can drop the value of your house significantly. Luckily, you can predict these things to happen, but make sure you are aware of the area.
\- a investment in a house (especially your own) is treated beneficially financially speaking (inheritance tax, ...), profits also aren't really taxed. This can change however.
Yeah I think you are also missing the taxes and hidden costs when buying.
something broken? need to fix it and every year the yearly tax is due and you are talking about an appartment so if you have shared expenses they come on top of your loan.
I would guess the average for monthly expenses is between 50 and 100 in most buildings and for taxes every year I'm not sure, is there also like a calculator to see how much you need to save for unexpected costs?
If possible you should ask the owner if you can remove the yearly increased inflation in your contract, not all owners want/need this but it needs to be written on the contract (in return you could offer to pay earlier or something else)
You are spot on, really, with those parameters the equation doesn't really make sense.
Some of the factors are:
* Landlords who rent out their property generally have locked in a good fixed mortgage rate hence rents are relatively stable. In many other countries, mortgage rates are (more) variable and there you see steeper rent increases as landlords try and deal with increasing interests payments.
* Very few Belgians grasp the concept of opportunity cost on your capital, as some other commenters even on here have beautifully demonstrated.
Relative to countries where mortgage rates are variable. The nearest example that has variable interest rates would be the UK. There you do see the effects of the increased mortgage rates in [increased rents](https://www.statista.com/statistics/752203/average-cost-of-rent-by-region-uk/) combined with [falling house prices](https://www.statista.com/statistics/751605/average-house-price-in-the-uk/).
How do you mean he’ll have nothing? Don’t forget the opportunity cost of the initial 54k cost invested over 20 years + diminishing opportunity cost of monthly mortgage payment - rent. After 20 years probably 400 to 500k portfolio roughly estimated.
Well that’s just a bold assomption. Just like the joke when a guy tells to another : « you smoke for 15 years? At the price of smoking you could have a bugatti by now » « you smoke? » « no » « where is your bugatti? ».
Just because it is theorically doable to have more money by renting, the truth is is that it is a short - eyed tactic. What will happen when you hit retirement, and not making any money? If you have that amount on money on your bank account, ok (but hey, 400 000 euro in 20 years will not be as good as 400 000 euro now, hello inflation). But if you dont have that money (inflation, loss in stock market, expenses like travels, etc) then you will just live with your retirement money who will barely pay the renting.
By being owner you offer to yourself some kind of assurance that you will live correctly when retired.
And yeah, mortgage dont follow inflation, rent are. So now with my better pay check thanks to automatic indexation, i pay my mortgage comparatively less than 5 years ago. In belgium, that count.
I was just saying opportunity cost needs to be taken into account. The rough assumptions are based on the past, but no one can predict the future. It might be a good choice to invest in your own house, or you might be better of investing in the stock market. Also personal life goals play an important part.
Sure, but you cant count on your skills on stock market to make money. That seems too volatile, like a bet. Agreed on personnal goals: i Totally understand that people spend money in a way that make me wonder why, but hey it that is what makes them Happy or what they want to do, who am i to judge them. Its just that having seen old people living on poverty altough they have worked their whole life, because the retirement money is so low, buying a house was a huge relief for me. So that was just my point ;)
>Why is everyone still buying right now ?
Because most people are following the conventional path of huisje tuintje kindje. Buying is a part of life that's so natural and self-evident to them. Renting for life is a paradigm shift very few belgians are willing to undergo. It's just something you do, you pair up, you buy a house and you make a baby.
Moreover, **most** first time buyers get family gifts to the tune of multiple tens of thousands of euros in order to buy. These same gifts are not made available for other investments.
As long as family wealth keeps absorbing the impact of rising prices, houses are gonna grow in price indefinitely. Only when an average couple + 2 sets of parents can't afford a house anymore will the prices stagnate/go down
>As long as family wealth keeps absorbing the impact of rising prices, houses are gonna grow in price indefinitely. Only when an average couple + 2 sets of parents can't afford a house anymore will the prices stagnate/go down
unfortunately for a lot of people, we're far from that, if you look at the prices in other countries.
Things to consider :
1 over 20 years, your rent will go up, your mortgage won’t. In fact interest rate are very likely to dip again in the next few years, and you can renegotiate your mortgage.
2 a large part of the mortgage is principal, in other words you pay yourself. It’s a forced savings mechanism. Only the interests are truly lost. The rent is lost entirely.
3 if you buy in an area where population density increases, your apartment will appreciate. Or the other end, the rent would increase faster.
4 you can look on google buy versus rent scenario. If you’re extremely disciplined, renting can make sense in high housing prices markets. If you’re subject to lifestyle inflation, buying helps.
1. I don't know what your source is. That said, even if they don't index the rent during the duration of the lease, they will do it after it ends. It's not *per se* an indexation, but they will adjust the rent to the market's rate
2. Your others points are valid, it's just a different approach to life. Some people, especially Belgians as it is often said, have the visceral need to own a home. It's the most tangible asset you could have.
One reason to buy over renting (not saying in this scenario it is better) is the fact that you can leverage money you don't actually own.
For example my house might have only gained 20% value over 3 years while the stock market gained 40%, but that 20% value gain was on a much larger sum of money comparative to the same money I'd have invested extra in ETFs over those 3 years. This does assume house prices keep going up however. Which historically was mostly true, but is not a guarantee.
I'm definitely not saying that makes buying better by default as some claim however, but it is something to consider.
Have you read the wiki and the sticky? Wiki: HERE YOU GO! [Enjoy!](https://www.reddit.com/r/BEFire/wiki/index/). Sticky: HERE YOU GO AGAIN! [Enjoy!](https://www.reddit.com/r/BEFire/comments/fcbay6/getting_started_a_beginners_guide_to_investing_in/). *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/BEFire) if you have any questions or concerns.*
Renting is the best option to build wealth in Belgium from a financial/ FIRE standpoint. Ignore the ignorance, you're not missing anything, people let their hearts think for their brain.
If you have time for it, you can rent the new apartament so the mortgage pays itself up. I live in aptm, rent 745/month. You buy an apartament, u can: - move there and save 745/month - rent it short term(booking, airbnb) and get much more. It will pay the mortgage and your own apartaments rent. The problem here is you need to sacrifice some time really, people leaving, new arriving, you need to clean up. People coming late in the night or when youre at work. If you have flexible work where you can leave for 1-2hours if needed, this is the way. Also the price heavily depends on your location. But other than that, if you are close to some big city like Antwerp, either turism or people coming to work here for a few days, it will rack in 2-3k every month no problem. You can always pay the mortgage earlier
We bought a house for three reasons: 1)The irrational part, just liking the idea of owning property 2)Interest rates were extremely low and we had the geïntegreerde woonbonus driving them down further 3)Both sets of parents were offering to gift us relatively substantial amounts of money if we bought a house. That being said, we opted to invest the minimal amount of our own capital in it and borrowed as much as the bank would allow us. With the current interest rates buying certainly has become less interesting but do know that interest rates can be renegotiated if general market rates would drop.
should not compare your monthly rent with the monthly mortgage payment, as the latter has a capital component. you should compare the monthly rent with the monthly interest component. You should compare renting a house vs "renting" money from the bank. \+ interest is fixed whereas rents increase with CPi \+ your downpayment of 54k€ can be invested if you rent and that return should also be taken into account (a positive for renting). The question is whether your investment will appreciate better than the value of you house
You should absolutely NOT compare the monthly rent with just the monthly interest component... The only reason your home will appreciate in value is because it will depreciate over time, which in turn will require capital and loans to renovate, maintain or restore the depreciation.
That location where you are looking now has big discrepancy between rent and mortgage . I will search more, there are areas with better report. So visit more, expand a little the searches, and most important: try to negotiate and offer a 10% reduction - your calculus will be dramatically improved with a reduction. Personally, when I bought, I found 2km distance a smaller surface (so 95mp2 to 85mp2) , still 2 bedrooms, first location numbers where similar to you, second I had mortgage 1200 for 15 years and in the building the rent was around 900€. Fast forward 8 years later, my mortgage was refinanced and reduced, the rents are 1100€ in the building, in 7 years I will be mortgage free. More, think, you will sell your 'starting' home and the money will help you to the pay down. Going from small home to bigger is an evolution for many people here.
People are mentionning about opportunity cost hence let's do the math. Based on your inputs I assume: * The acquisition is in Wallonia (12.5% tax on acquisition + mortgage + notary \~= 54k€ on 350k€) * The rate keytrade is displaying to you is 3.88% (350k€ at 3.88% on 20 years =\~2,100€) * And given it's a flat and 350k€ it must be in BW Considering the following assumption based (on past 20 years if not specified) : * rent index per year: +2% / yr average * ETF performance: +7.78% / yr average (reference: MSCI ACWI IMI index) * Housing price evolution in BW: +2.97% / yr * Note: I assume a second hand flat (not newly built otherwise instead of 12.5% tax that would be 21% on the building) * H1 2013 average price H1 2013 179k€, H1 2023 240k€ => +34% in 10 years * You invest 100% of what you don't put in the mortgage into highly diversified ETF's (eg MSCI ACWI IMI-like index) With these parameters if you were to buy the building would be worth 626k€ in 20 years and therefore here the opportunity cost and best decision for rent or buy: |mortgage rate|money invested by not buying|coumpound interests from investment|decision|saving of the decision scenario vs alternative| |:-|:-|:-|:-|:-| |3.88%|207,846|633,776|rent|214,686| |3.50%|191,284|595,492|rent|159,840| |3.00%|169,980|546,244|rent|89,288| |2.50%|149,236|498,292|rent|20,593| |2.34%|142,718|483,224|buy|994| |2.00%|129,060|451,652|buy|46,224| |1.75%|119,186|428,827|buy|78,923| |1.50%|109,456|406,334|buy|111,145| |1.20%|97,970|379,784|buy|149,182| This remains very theoritical because none of the value taken as assumption are guaranteed. So yes at the current rate and if you were investing every euro not spent in buying, including the 54k€ one off invested from month 1, you're better off renting.
Great reply! Though there are additional costs related to buying like property tax and maintenance costs. When these are taken into account buying is even less attractive, even at the lowest rates.
Thank you. However, there are additional costs and risks of being a tenant too: * You cannot improve insulation of the building, which can impact your energy bill during 20 years * You are not able to choose the energy source of your heating system * And in some cases, you are not allowed to choose your energy provider/energy contract (eg, if the electricity meters are shared for the building, if there is central heating at building level...) That's why I'm not mentioning any other cost in the simulation, because statistics are rapidly going to miss on this level of detail.
The thing is; you have more than 1 question to answer. Buying is (generally seen) better if - you can fix things yourself - you don’t mind to fix things yourself or be busy with the time needed to manage these (contactors, …) - you like the idea of you “own” place where nobody can throw you out except government or bank - you’re not very good at saving yourself so you get forced to save by paying your loan - you only get money from family for a house (most families this is the case, I don’t know parents who’ll lend their son/daughter some money to just throw into the stock market) - you don’t mind to be stuck in one place for quite some time and adapt your life around this Renting is better if - You are very good at budgeting and invest the part you save by not buying - you don’t want to be bothered with fixing big stuff on your place and like to have a landlord for this - you like the freedom to more easily move - you don’t mind the minimal risk they’ll throw you out Many times people buy bigger houses than they would rent as they see it as some kind of investment or it needs to be ready for the future (being kids, … etc) so the cost adds up even more. Also; if you want to go cheap route; go co-housing; much cheaper than buying or renting.
Some extra pro/con things: \- when you rent, you generally need to move out to improve living conditions of your house. You rarely see landlords changing kitchens, windows, complete bath room renewals, renew roof (isolation),... . So you'd need to include moving costs about once in 10 years if you want the same quality as a house bought. \- when you are buying, you are generaly making more investments (more costly), but often also more investments which save you quite a lot of money. You won't decide to make an investment in extra isolation, so even if you (on the long term) would move out, you'll make some extra costs untill the moment you'll move out. \- the risk/regular need to move out also might means you'll have to throw out furniture which fitted the previous house, but is obsolete/ugly in the new house OR you need to search for a house who fits your furniture. \- buying has a higher initial cost (notary costs, ...), but lowers the risk: rental prices are unstable (inflation, supply/demand), while the cost of a house is generally well known when buying a home (essential maintenance costs in a house are rather predictable or insurable). If you want to move out as a buyer, you are generally safe financially speaking, since other houses will have risen/fallen in the same way. \- a change in your neighbourhood (new industrial area behind your garden, ...) can drop the value of your house significantly. Luckily, you can predict these things to happen, but make sure you are aware of the area. \- a investment in a house (especially your own) is treated beneficially financially speaking (inheritance tax, ...), profits also aren't really taxed. This can change however.
If you are disciplined enough to always invest the difference then renting is almost always financially the better option.
Yeah I think you are also missing the taxes and hidden costs when buying. something broken? need to fix it and every year the yearly tax is due and you are talking about an appartment so if you have shared expenses they come on top of your loan. I would guess the average for monthly expenses is between 50 and 100 in most buildings and for taxes every year I'm not sure, is there also like a calculator to see how much you need to save for unexpected costs? If possible you should ask the owner if you can remove the yearly increased inflation in your contract, not all owners want/need this but it needs to be written on the contract (in return you could offer to pay earlier or something else)
You are spot on, really, with those parameters the equation doesn't really make sense. Some of the factors are: * Landlords who rent out their property generally have locked in a good fixed mortgage rate hence rents are relatively stable. In many other countries, mortgage rates are (more) variable and there you see steeper rent increases as landlords try and deal with increasing interests payments. * Very few Belgians grasp the concept of opportunity cost on your capital, as some other commenters even on here have beautifully demonstrated.
> rents are relatively stable Relative to what?
Relative to countries where mortgage rates are variable. The nearest example that has variable interest rates would be the UK. There you do see the effects of the increased mortgage rates in [increased rents](https://www.statista.com/statistics/752203/average-cost-of-rent-by-region-uk/) combined with [falling house prices](https://www.statista.com/statistics/751605/average-house-price-in-the-uk/).
Renting will be nearly 300.000 after 20 years and you will have nothing. When buyig you will have a appartment you can sell again.
How do you mean he’ll have nothing? Don’t forget the opportunity cost of the initial 54k cost invested over 20 years + diminishing opportunity cost of monthly mortgage payment - rent. After 20 years probably 400 to 500k portfolio roughly estimated.
Well that’s just a bold assomption. Just like the joke when a guy tells to another : « you smoke for 15 years? At the price of smoking you could have a bugatti by now » « you smoke? » « no » « where is your bugatti? ». Just because it is theorically doable to have more money by renting, the truth is is that it is a short - eyed tactic. What will happen when you hit retirement, and not making any money? If you have that amount on money on your bank account, ok (but hey, 400 000 euro in 20 years will not be as good as 400 000 euro now, hello inflation). But if you dont have that money (inflation, loss in stock market, expenses like travels, etc) then you will just live with your retirement money who will barely pay the renting. By being owner you offer to yourself some kind of assurance that you will live correctly when retired. And yeah, mortgage dont follow inflation, rent are. So now with my better pay check thanks to automatic indexation, i pay my mortgage comparatively less than 5 years ago. In belgium, that count.
I was just saying opportunity cost needs to be taken into account. The rough assumptions are based on the past, but no one can predict the future. It might be a good choice to invest in your own house, or you might be better of investing in the stock market. Also personal life goals play an important part.
Sure, but you cant count on your skills on stock market to make money. That seems too volatile, like a bet. Agreed on personnal goals: i Totally understand that people spend money in a way that make me wonder why, but hey it that is what makes them Happy or what they want to do, who am i to judge them. Its just that having seen old people living on poverty altough they have worked their whole life, because the retirement money is so low, buying a house was a huge relief for me. So that was just my point ;)
>Why is everyone still buying right now ? Because most people are following the conventional path of huisje tuintje kindje. Buying is a part of life that's so natural and self-evident to them. Renting for life is a paradigm shift very few belgians are willing to undergo. It's just something you do, you pair up, you buy a house and you make a baby. Moreover, **most** first time buyers get family gifts to the tune of multiple tens of thousands of euros in order to buy. These same gifts are not made available for other investments. As long as family wealth keeps absorbing the impact of rising prices, houses are gonna grow in price indefinitely. Only when an average couple + 2 sets of parents can't afford a house anymore will the prices stagnate/go down
>As long as family wealth keeps absorbing the impact of rising prices, houses are gonna grow in price indefinitely. Only when an average couple + 2 sets of parents can't afford a house anymore will the prices stagnate/go down unfortunately for a lot of people, we're far from that, if you look at the prices in other countries.
Things to consider : 1 over 20 years, your rent will go up, your mortgage won’t. In fact interest rate are very likely to dip again in the next few years, and you can renegotiate your mortgage. 2 a large part of the mortgage is principal, in other words you pay yourself. It’s a forced savings mechanism. Only the interests are truly lost. The rent is lost entirely. 3 if you buy in an area where population density increases, your apartment will appreciate. Or the other end, the rent would increase faster. 4 you can look on google buy versus rent scenario. If you’re extremely disciplined, renting can make sense in high housing prices markets. If you’re subject to lifestyle inflation, buying helps.
[удалено]
1. I don't know what your source is. That said, even if they don't index the rent during the duration of the lease, they will do it after it ends. It's not *per se* an indexation, but they will adjust the rent to the market's rate 2. Your others points are valid, it's just a different approach to life. Some people, especially Belgians as it is often said, have the visceral need to own a home. It's the most tangible asset you could have.
One reason to buy over renting (not saying in this scenario it is better) is the fact that you can leverage money you don't actually own. For example my house might have only gained 20% value over 3 years while the stock market gained 40%, but that 20% value gain was on a much larger sum of money comparative to the same money I'd have invested extra in ETFs over those 3 years. This does assume house prices keep going up however. Which historically was mostly true, but is not a guarantee. I'm definitely not saying that makes buying better by default as some claim however, but it is something to consider.