patrick.net

Patricks calculator actually takes all of those things into the account.

X times annual rent is simplified just ballpark figure to get the conversation started.

so, poster, make an offer to your LL. That was easy.

ChrisLA says

Patricks calculator actually takes all of those things into the account.

A few points.

1. I frequently read an article in the news media that uses the "X times annual rents" as a good metric -- 15 is the number that comes up a lot. It irks me because this is such a rough estimate that it isn't worth a whole lot. Sure, if a house costs 38 times annual rents, then it's a clear loser, and if the price is only 6x annual rents then it's probably a winner....I think a calculator like what Patrick has is a *much* better way to approach the question...but that's too complicated to squeeze into casual conversation or print articles. Maybe I'm just bitching. Maybe a simple disclaimer "assuming 5% interest" would go a long way.

2. The difficulty with rent vs buy calculators is in the inputs. The maintenance is a big one, as I mentioned the value of a property is sometimes dominated by the land value, which doesn't require much maintenance. Try getting an agreement from people on what a reasonable value for maintenance is.

Bap33 says

so, poster, make an offer to your LL. That was easy.

a. I'm probably not in a position to buy a house at the moment.
b. My offer would be about 50-60% of his listing price -- I doubt he would accept.

swebb says

Owning and renting aren’t equivalent. Owners and renters aren’t equivalent neighbors. I’m sure different as a renter than I was as an owner.

We rent and we have by far the best lawn on the court. (I do have a lawn business though)

Renters being bad neighbors is really BS. it's usually the Landlord who is at fault. ie the don't watch the property or screen the tenants well or just don't care.

swebb says

The difficulty with rent vs buy calculators is in the inputs.

I definitely agree with you there. You can make the results come out any way you want just by changing the assumptions.

Especially appreciation. The reason we got all this bad lending and high prices was because people were assuming appreciation higher than the salary-inflation rate.

Katy Perry says

Renters being bad neighbors is really BS. it’s usually the Landlord who is at fault. ie the don’t watch the property or screen the tenants well or just don’t care.

I guess we will just have to disagree on this. I'm saying that, as an owner, I was a better neighbor...not that I'm particularly bad as a renter, but I just don't have the same vested interest in the property or the neighborhood. It's not intentional, but I tend to prioritize other things. I'm a member of the neighborhood association, and I went to the one meeting that they have had, but really..it's different being a renter, for me anyway.

I know it's a touchy subject, especially on these message boards, but I really do think that as a whole renters are not as good neighbors as owners...of course there are exceptions (including you), but on average someone who has the means and the commitment to buy a house makes a better neighbor than someone who doesn't have the means or commitment to do so... Other neighbors certainly perceive an owner differently -- they have basically signed a 30 year lease with an onerous exit clause...they show more commitment to staying put than a renter. Sort of like a contract worker, a substitute teacher, a travel nurse...I don't know, I think it's just human nature to see them differently. Again, I'm a renter and likely to be one for some time to come...

Ha ha It's is funny . I say to all my neighbors, "yes I rent, but don't hold that against me." they still do I think.

but what I really want to say is
"look I do rent and own zero of this house but in real numbers I own more of this house than you own of yours. Zero is a larger number than any Negitive number I know of,...right."

I'm really surly lately.