I cant read the article but a couple of thoughts about rent and invest vs buy debate:
1. buyers nearly always end up buying more house than they need, this is in part due to the il-liquidity of real estate and you cant blame them. If you are planning to need more space in the future better to spend more now rather than buy properties twice mainly due to the very high transaction costs of RE. Renting offers more flexibility in terms of home size and especially in terms of location. Many job seekers do not move for a better job because they own a home or not moving results in long and costly commutes. The affect of this on workers incomes and commuting expenses is very hard to quantify.
2. Nearly all rental RE investors (landlords) do not account for all of their costs (in dollars and time) when calculating their returns. As anyone who rents properties knows a lot of time and money is required to buy, manage, and sell properties. I am a landlord and I know a lot of landlords and none can give me an accurate estimate of their actual costs. If your RE investment is a part time or full time job it damn better well beat stock market returns! The time and costs incurred are very hard to quantify.
3. Home prices are tied to incomes. Home prices are high in NY and SFO areas because incomes are very high. Banks and the federal government actually have hard limits for monthly housing payments (it is somewhere around 30% of income). Thus, when people say things like housing is becoming unaffordable and if you dont buy now you will never be able to I am at the least skeptical.
4. In the long term and over large areas home prices increase at the same rate as inflation. See #3 for part of the explanation of why this is so. Also, understand that technology is continually making housing quality better and price to build cheaper.
5. Homes are consumable items that will crumble and become worthless if not continually maintained and rebuilt. The IRS calculates the life span of residential real estate at 27 years. That means that the value of the building will be worthless after 27 years without continued expense. Land is a small part of residential real estate value.
1. It makes sense to buy a house that you can grow into. However, I have always lived in HCOL areas and people typically buy small starter homes including condos and townhouses first. After some healthy appreciation after 5 years, then they can afford to sell and buy a single family home.
I also partially agree with buying a home might limit your job prospects. However for me, when I moved for a new job, my primary residence became a rental. However, I agree that this is not normal.
2. I keep pretty good detailed notes on my time and repair costs of two rentals. However, in the beginning I did not. Once I started using Mint, my records got much better.
3. I live on Kauai and housing is unaffordable for the local people. The level of education is low and most people make $15/hour at a restaurant or hotel. Median single family home is 600K.
4. I think technology is making it easier to manage properties from long distance. I live on Kauai. I have one rental in Colorado and one rental in Florida. I have family in both areas, so I do one site visit at least once a year.
5. I think it depends on construction quality, weather and quality of tenants. My current tenants in my Colorado house take better care of it than I did when I lived there. A roof in Colorado can last 25-30 years. A roof in Florida lasts 15-20 and that's based on no hurricanes.
I moved to Fort Myers, FL in 2011. I ended up buying a single family home for 95K. My total mortgage payment with insurance taxes and PMI was $658. If I would have rented that house in 2011, it would have cost $1200/month. Many people lost their homes to foreclosure and could not qualify to buy another home when the housing market tanked. That house now rents for $1700/month. The total payment is now $614/month because I no longer pay PMI. I wish I could have bought 5 of them.