Is the delta between renting & owning now so high that it really just makes sense to rent?
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Anonymous
That price is so ridiculous as to be absurd, and I’m used to the DC area absurdity. But wow I can’t imagine why anyone would willingly choose to move to Cupertino right now. |
Anonymous
| We were looking to buy in Massachusetts - 2-2.5 mil, until I did this very calculation. Would cost us hundreds of thousands in a down payment plus $15-20k / month (almost all interest) to buy … or we could just rent for $5-6k and put that money in the market. |
Anonymous
Which area of Mass? The math just doesn’t make sense when you can rent the same place for one-third of the monthly PITI. You’re making the right call. |
Anonymous
https://www.google.com/amp/s/www.marinij.com/2024/04/26/la-court-strikes-down-controversial-california-law-abolishing-single-family-zoning/amp/ "The Los Angeles County Superior Court judge’s ruling, issued Monday, means that SB 9 can’t be applied in these five cities. The judge is expected to produce a ruling in the next month that could strike down SB 9 statewide" And FYI just because zoning allows more than single family homes doesn't mean you can't build single family homes. Just means you can build more if you want to. |
Anonymous
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This is the closest comparison I could find, but I’m not seeing how buying would be better in the long run other than said landlord wanting to take their property back. As others have mentioned, renting is the better option as in this case buying would be $2k more a month plus everything else that comes with it.
https://www.zillow.com/homedetails/3205-Theodore-R-Hagans-Dr-NE-Washington-DC-20018/88808131_zpid/ https://redf.in/9c0SM6 |
Anonymous
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If we were in our early 30s now like we were when we bought our home (2013), we would probably take a hard look at renting something much smaller and not buying. With the headache that can be home ownership, limits on SALT deductions, interest rates, and the fact that you couldn't buy what we currently own for less that ~1.5M, I am just not seeing it.
I have several friends that are 5-7 years behind us with young families and they are stuck in their starter homes. You can always seek out more income, but that also comes at the cost of your time. I am glad we bought our "forever" home and renovated it to our liking. Totally luck on our part we did. |
Anonymous
| We moved cross country and planned to buy (currently renting) but we've lost so many houses to multiple offers. Prices just keep going up. I think we are giving up. |
Anonymous
Not really |
Anonymous
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I've done the calculation for a 1-bedroom condo in DC.
Total payment would be $2700 month to buy vs $2200 rent the same condo. I would also be 'out' $60k down payment, which is 20% and other fees it took to buy. The prices have been the same since 2008, so there won't be much appreciation. Might be $350k in 20 years depending on inflation, so really losing money. The interest deduction and upkeep should cancel each other out. The $2200 is increase for the upcoming year. I had a good deal paying just $1950. Now, $60k and the extra $6k a year invested for 20 years is about $800k. I also would have an option not to invest some months because of hardship. I would not have an option to not pay mortgage or HOA or taxes. I have an option to move to a cheaper place if rent gets too high. I'm renting until my investments are big enough that a $300k out of them won't be noticeable. Should be there soon. I already made the mistake of buying vs renting. Both places were for living though, but it just didn't work out well. |
Anonymous
Condos are terrible examples to use. They have very different appreciations and market fundamentals than SFHs. The 1-bedroom condo is the worst of all. In your particular situation it seems like you can justify renting over owning if your option is restricted to a 1-bedroom condo vs apartment. A family is a different story. |
Anonymous
This is so crazy to me. All throughout my 20s (and my sister did into her 30s) I lived with roommates in not the most desirable areas (but safe) in order to save for a home. It paid off. I had friends paying maybe 1700-2500 for a one bedroom apartment (10+ years ago) whereas I was paying $500-$800 for a room in a shared apartment. Was it ideal? No, but I saved and invested that money over 10+ years and it paid off. When I moved in with my now husband we lived in a tiny apartment together and saved a ton of money. He also commented on how good of a communicator I was and living with a variety of people helps you learn how to better communicate and handle things when living with other people. I have cousins in their 20s and they all live alone or in these shared luxury apartments! One cousin lives with 2 friends in this crazy gorgeous apartment in Manhattan and her rent for her one bedroom in the 3 bedroom apartment is around what OP pays for a 1 bedroom! She saves no money (she is not in finance or tech) and her parents subsidize her income. They are doing her no favors. There is no understanding to live a little bit more away in a not fancy apartment and save/ invest your money for the future. |
Anonymous
Where in MA can you rent a $2million dollar home for $6k a month?! |
Anonymous
| A point that hasn’t been made is that it will likely be possible to refinance at a lower in a couple years. But renting seems like the winner financially right now. |
Anonymous
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it is hard to compare renting to owning.
Why? The house I own is way better than anything I would rent. |
Anonymous
In Potomac and Bethesda 2 million dollar homes rent for about that. It is pretty common. |