I'm sure this question has been posed elsewhere at some point on this forum, but if it's good to be a property owner if the monthly rent is greater than or equal to 1% of the purchase price, wouldn't the opposite be true? Better to be a renter if <1%?
Yes, in past discussions, many have followed your reasoning,
@Mako52.
I've seen MMM suggest the same thing. Another comment from him I thought was worth noting was, roughly, learn to be thrifty regarding what's expensive in your area, and take advantage of what's cheap or plentiful or just special. So in a high cost metro, he might rent a small apartment - or exchange labor for rent, as he did when doing labor tourism to Hawaii (he did a bathroom for someone there in exchange for a rent free visit). He commented that in Hawaii, people live in small houses but spend a lot of time outdoors, because the weather and beaches are some of the things to take advantage of.
In the US, I think it's worth seeing 3 levels: HCOL where renting is cheaper, LCOL where buying is cheaper, MCOL where it's a close decision. Maybe 1%, .75, .5% as a rule of thumb? I haven't seen it discussed that way from a renter's viewpoint, that's how I think of it. Obviously from a renter viewpoint there's also the question of stability, because a one year residence is too short to cover the costs of buying and selling, so renters have the advantage there.
I think of myself as living in a MCOL city trending high. I like owning for now, so I own, but conserve cost by renting out rooms. I think my cost is similar to being the renter, though details like future repairs and possible refinancing can make a big difference.
