Utilize your financial knowledge, give your answer or opinion to the input question or subject . Answer format is not limited.

Explain: “3% annual cost of renting is less than the 9% annual cost of owning”
The 3% and 9% figures are based on the cost of borrowing money and all the other ownership costs associated with real estate.  From the same article: http://patrick.net/housing/crash1.html Because it's usually still much cheaper to rent than to own the same   size and quality house, in the same school district. In rich   neighborhoods, annual rents are typically only 3% of purchase price   while mortgage rates are 4% with fees, so it costs more to borrow the   money as it does to borrow the house. Renters win and owners lose!   Worse, total owner costs including taxes, maintenance, and insurance   come to about 8% of purchase price, which is more than twice the cost   of renting and wipes out any income tax benefit. Imagine you are renting a house. If the cost of your annual rent is lower than X then renting is obviously the best idea from a monetary calculation. If rent is greater than Y being a landlord makes more sense. In the middle it is debatable, and the non-monetary reasons need to be considered.