Anonymous wrote:

Anonymous wrote:

Anonymous wrote:One thing to keep in mind is your home purchase is usually leveraged, so even though my house has not quite doubled in value my equity has more than tripled in value. Of course in theory you can invest borrowed money in the stock market but it's harder/riskier/more expensive.

That's a fair point, but how typical is it to triple your house equity, and in what timeframe? The friends i know have perhaps doubled it in 15-20 years, which equals a not that spectacular annual return.

(Plus, they rarely factor in costs like property taxes, insurance, repairs...)

The NYT had a great rent vs buy calculator, it's very helpful to actually compare the numbers.

I was just trying to illustrate that often people do better on their houses than stock market investments because they have the ability (or need) to buy and hold for a while and to borrow most of the money that is sunk into the asset. I think even if real estate prices just increase 2% a year (which is basically inflation), and you wait 10 years, you'll probably double your equity.

Anonymous wrote:

Anonymous wrote:Nice job on this question OP you framed it right to keep the dopey responses to a minimum. That being said here is my dopey 2 cents: I owned 2 homes but got to that point of "are the costs of home ownership too high" on home 2 and came to the conclusion it was time to sell. Sold it rented a home in the same neighborhood. Savings on the rental was immediate but part of it was the built in savings of renting which for me is: I can easily rent something to live in that I would never buy. I.E "its just a rental" Nearly everyone could probably rent adequate housing and save like this if they really thought about it. I literally moved barely 2 streets away and my rent was half my old mortgage. I could've stayed in that house for at least a few years but the wife grew tired of it so we bought again. I do see where renting can work and keep the costs of a new roof, furnace, kitchen remodel etc across the board to make it worth it.,, but just walk into a place some time and say "its just a rental" you save 10% right there

You must not live in dc! Our mortgage for a rowhouse is $3,500.

A dumpy 2 bedroom condo two blocks from us rents for around $2,200. Really dumpy.

We pay down around $1k each month to equity and receive around a $1k tax break.

Our cost is around $1,500 to own our house. I’d estimate we spend $500 each month MAX on maintenance. So 2k total.

PP here in DC Burbs

Anonymous wrote:Nice job on this question OP you framed it right to keep the dopey responses to a minimum. That being said here is my dopey 2 cents: I owned 2 homes but got to that point of "are the costs of home ownership too high" on home 2 and came to the conclusion it was time to sell. Sold it rented a home in the same neighborhood. Savings on the rental was immediate but part of it was the built in savings of renting which for me is: I can easily rent something to live in that I would never buy. I.E "its just a rental" Nearly everyone could probably rent adequate housing and save like this if they really thought about it. I literally moved barely 2 streets away and my rent was half my old mortgage. I could've stayed in that house for at least a few years but the wife grew tired of it so we bought again. I do see where renting can work and keep the costs of a new roof, furnace, kitchen remodel etc across the board to make it worth it.,, but just walk into a place some time and say "its just a rental" you save 10% right there

Anonymous wrote:I'm single and live in an area where I can rent a 1000sqft+ 2 bd apartment with garage parking in a luxury building across from the metro for around $2200/mo. To purchase something similar in this area would be north of $550k plus an additional $500+ per month in condo fees. I just cannot make the math work out to find that buying is a better deal for someone like me, ESPECIALLY with the condo fees, which are ridiculous around these parts.

I've lived in the area for almost 10 years and property values on these places have not increased enough to consider it a wise decision. I've even seen several listed at least $10k below purchase price from 5-6 years ago.

If you were looking at a SFH and planning to stay for 10+ years I could see where the math might work out. For everything else, it just doesn't make sense.

Anonymous wrote:

Anonymous wrote:One thing to keep in mind is your home purchase is usually leveraged, so even though my house has not quite doubled in value my equity has more than tripled in value. Of course in theory you can invest borrowed money in the stock market but it's harder/riskier/more expensive.

That's a fair point, but how typical is it to triple your house equity, and in what timeframe? The friends i know have perhaps doubled it in 15-20 years, which equals a not that spectacular annual return.

(Plus, they rarely factor in costs like property taxes, insurance, repairs...)

The NYT had a great rent vs buy calculator, it's very helpful to actually compare the numbers.

Anonymous wrote:I'm single and live in an area where I can rent a 1000sqft+ 2 bd apartment with garage parking in a luxury building across from the metro for around $2200/mo. To purchase something similar in this area would be north of $550k plus an additional $500+ per month in condo fees. I just cannot make the math work out to find that buying is a better deal for someone like me, ESPECIALLY with the condo fees, which are ridiculous around these parts.

I've lived in the area for almost 10 years and property values on these places have not increased enough to consider it a wise decision. I've even seen several listed at least $10k below purchase price from 5-6 years ago.

If you were looking at a SFH and planning to stay for 10+ years I could see where the math might work out. For everything else, it just doesn't make sense.

Anonymous wrote:I'm single and live in an area where I can rent a 1000sqft+ 2 bd apartment with garage parking in a luxury building across from the metro for around $2200/mo. To purchase something similar in this area would be north of $550k plus an additional $500+ per month in condo fees. I just cannot make the math work out to find that buying is a better deal for someone like me, ESPECIALLY with the condo fees, which are ridiculous around these parts.

I've lived in the area for almost 10 years and property values on these places have not increased enough to consider it a wise decision. I've even seen several listed at least $10k below purchase price from 5-6 years ago.

If you were looking at a SFH and planning to stay for 10+ years I could see where the math might work out. For everything else, it just doesn't make sense.

Anonymous wrote:One thing to keep in mind is your home purchase is usually leveraged, so even though my house has not quite doubled in value my equity has more than tripled in value. Of course in theory you can invest borrowed money in the stock market but it's harder/riskier/more expensive.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

Considered it when we were in between houses, but considering how much equity we had in our house we sold and how low our mortgage was going to be, I was SHOCKED at how expensive rent was for a family of 4 plus a dog. Going rent a few years ago FAR exceeded our mortgage. Plus the tax hit. The math didnt work out.

From the quick math I've done on this every time I've considered it, when you are in the stage where you need a 1-2 bedroom, the math can work out favorably to not buy and instead rent and invest the rest. As soon as you need a 3 bedroom+ -- it seems cheaper to just buy than to rent a large apartment or a house. At least that's what I've found in this area.

Yup. We needed a 3 bedroom and 2 parking spaces that allowed dogs and holy hell, I almost fell over at the prices and this was in the burbs! The mortgage on my SFH is half of what I was looking at in rent.

+1. Even for a two bedroom in DC our rent was $3,400 and that was cheap.

Our mortgage is $3,500. We receive at least $900 each month in a tax break and oaydown now around $1,000 each month.

We’d need to find a place to rent for around $2,000 to make it better to rent and that’s not happening.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Have you determined that the costs of homeownership are too high and decided to rent? Please provide specifics.

Thank you!

Considered it when we were in between houses, but considering how much equity we had in our house we sold and how low our mortgage was going to be, I was SHOCKED at how expensive rent was for a family of 4 plus a dog. Going rent a few years ago FAR exceeded our mortgage. Plus the tax hit. The math didnt work out.

From the quick math I've done on this every time I've considered it, when you are in the stage where you need a 1-2 bedroom, the math can work out favorably to not buy and instead rent and invest the rest. As soon as you need a 3 bedroom+ -- it seems cheaper to just buy than to rent a large apartment or a house. At least that's what I've found in this area.

Yup. We needed a 3 bedroom and 2 parking spaces that allowed dogs and holy hell, I almost fell over at the prices and this was in the burbs! The mortgage on my SFH is half of what I was looking at in rent.