Reply to Is the delta between renting & owning now so high that it really just makes sense to rent?

Forum Index » Real Estate

Reply to "Is the delta between renting & owning now so high that it really just makes sense to rent?"

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous]Not that hard to do the math. It is definitely that way right now for almost any house assuming 20% down and a 7%+ interest rate. If you don’t believe me pick any house for rent on Zillow right now that sold recently and compare the asking rent with what a mortgage with 20% down would be. Not only will the rent be lower significantly, you will be also able to invest your down payment and transaction cost of buying. And as a bonus maintenance is someone else’s problem. Purely financially renting makes a lot of sense now. Having your own place however has other advantages and if those matter enough to you, then go ahead and buy if you can afford it. Life is too short. [/quote]

It's not so straightforward. I would like to upsize from current property and can put 50% down in the next property in my price range. That's what a lot of people are doing. Or it's all cash offers. If you can pay cash, I'd buy the house rather than rent.

Market is terrible for first time buyers but there's something about owning a property. Putting money in the market + renting doesn't always work out. Market can go south but if you own, you still own a house!

I also don't live in DC but in another midsize city and while it's starting to get more expensive to buy with the 20% down metric versus renting the same, it's only about 10% more expensive to rent. Which means it's still not a bad idea to get on the ladder. Rates could still go up. Rents could still go up. There's still a pent up and growing demand for housing.  [/quote]

The question was about putting 20% down, which is what most people do here, given the prices. Of course the more cash you can put down, the less the interest rates matter and the calculation changes. I have recently considered renting out my house and renting another one. I found several houses that I could easily afford to rent for 7-8k a month, which were all in about the 2-2.2mil range if they sold now. I could put at max 500k down if I wanted to buy any of these houses and my monthly payment would be almost double the rent and going almost entirely toward interest, none of which I personally can deduct. Everyone should do this math before they make a decision in either direction.

People tend to look down on renting but sometimes it just makes way more sense, particularly if one does not expect to stay put for life. With the current rates you are building almost no equity in the first years and it takes significant appreciation to offset any transaction and maintenance costs of a 5-10 year ownership. [/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics