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tatupu70
2013 Apr 28, 9:47pm
This is my situation. I have a non-increasing, month-to-month, $1600/month
rent from a foreign landlord who just wants his property always occupied and has
had a history of druggie criminal tenants, so I'm a godsend to him.
Like, SFAce said--you can make the calculator say whatever you want it to say based on your inputs.
I notice you chose no rent increase forever--which is pretty ridiculous. You think your landlord will not raise rent for the next 30 years??
Also, you have an interest rate of 5.5%--is your credit rating subprime or something?
More realistic numbers of 2% annual rent increase and 3.5% mortgage rate with 20% down, give a result that it's better to buy after 5 years.
And if you put taxes at 1% instead of 2% (which, based on a few ads on zillow, appears to be closer to reality), it's better to buy after 4 years.
David Losh
2013 Apr 28, 11:48pm
House values and rents have gone up much more than inflation in my area over the past 10 years.
I think this is the operating basis for a lot of calculation, they are based on the Real Estate market performance of the past ten years.
Home prices are allowed to rise now, because they are measured to the "peak" in pricing.
The price however is unsustainable.
You don't get to have inflation if the consumer can't afford to pay more. They, whoever they are, can figure the CPI anyway they want until the cows come home, but unless the consumer has the ability to pay there is no inflation, it's just random pricing with alternative choice.
Absolutely renting is at least at par with buying. Buying is a thirty year debt. Where will you be in thirty years?
David Losh
2013 Apr 28, 11:53pm
Value is in the eye of the beholder. It's easy to say I'm single, I can sleep in my car and cost nothing. A house has no value to me. It's another thing when you have a wife, 2 kids and other. The value is worth a lot more when there are more heads involved.
We continue to pay a mortgage because of our kids, and the school they attend. In two more years I'll think seriously about whether to keep the house, walk away, or sell, whatever comes of the market place.
We can buy for cash in most parts of the country, and maybe here close to Seattle, but I don't see the point.
I see a feel good aspect to property, or bragging rights? but economically I would rather own another business than a rental, or personal residence.
Take your money and run until the next roller coaster ride the way I see it.
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I was one of the renters in 2004 era who waited for the bubble to burst in 2009. bought a home when blood was on the streets.
price to rent was excellent. Most people who used math and reason to say housing was in bubble in 2004 used the same math and reason to deduct that 2009/2010/2011 was a good time to buy.
There were few who kept insisting that houses were still overpriced.
To this day i can't believe what was the reasoning behind that statement. Lets not go over, bay area is doomed, US is doomed type arguments. lets talk pure math. P/E ratio..etc
I seriously would like to hear from people who didn't buy during the crash. Are there cases where the rent was higher than the mortgage based on rent vs buy calculator?
When you compare the rent and mortgage, always do that to the same or similar place you are renting or planing to buying.don't
mix them up. I have seen some people screwing up the math by comparing the rent they pay for a condo to the mortgage of a single family house they plan to buy. LOL!
rent versus buy calc : ( is not 100% accurate but is enough to make a decision, add some margin for error)
http://www.nytimes.com/interactive/business/buy-rent-calculator.html?_r=0
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