Show HN: Should I Get a House? a better rent vs. buy calculator • Hacker News Board

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#31

Post by shadowlight » Mon, Jul 19, 2021, 3:11 PM UTC

alach11 wrote: post #2

My wife wants to buy a house, but I'm unable to make life decisions without trying to minmax them. I wasn't satisfied with existing rent vs. buy calculators, so I decided to build my own! I'm not a developer, so I apologize if it's a little rough looking... Some things it takes into account: - The actual rate of return on your down payment and extra costs of a house - Inflation - Itemized deductions on your taxes - T…

Automated state tax generation. Historical house appreciation by state or even better, city.

Option to account for income from money in sp500.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#32

Post by c4m » Mon, Jul 19, 2021, 3:11 PM UTC

This is a neat tool! There’s one more feature I’d want before using it seriously, which is a field for stock market return rate.

If my down payment is 50,000, then in the rental (apartment) case I want to estimate how much I would be earning with 50,000 in the stock market.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#33

Post by mandeepj » Mon, Jul 19, 2021, 3:12 PM UTC

Aulig wrote: post #25

mandeepj wrote: post #9

Buying is better, if you are thinking a bit long term like 4-5+ Years. Now, why I said that: Here’s my story - I had lived in an apartment for 5 years. It’s my longest stretch at one place so far. I paid about $100k in rent for all of those years. When I left that place, I got nothing out of it. If I had a house, then I would had built some equity. Edit: removed - ‘Buying is always better’ from the first sentence

No it's not. In many cases it can be beneficial to rent and invest your money instead, as stocks have a higher longterm ROI than property.

Does it have to be mutually exclusive? My current mortgage and previous rent are almost the same.

A friend of mine bought his house in 2011-2012 for $200k. Now, it's worth ~$500k.

>stocks have a higher longterm ROI than property. That's debatable. And, it depends at what point you were in and for how long you can stay as there'll be set backs during the ride. Unfortunately, if you have to cash out due to emergency during a dip then ROI would not be favorable.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#34

Post by jbb67 » Mon, Jul 19, 2021, 3:13 PM UTC

bachmeier wrote: post #27

There's no way to put this into a calculator, but this decision isn't purely monetary. Do you enjoy having to maintain a home and property? If not, maybe buying a house isn't for you. Even if you hire someone, that can be a massive hassle, you have to worry about being ripped off, ... If you're not settled in your career to where you can comfortably take off long stretches of time during the day, you probably shouldn…

but also the reverse applies. If you want to make alterations or improvements to your house, better not rent

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#35

Post by jmvoodoo » Mon, Jul 19, 2021, 3:14 PM UTC

jartelt wrote: post #20

mandeepj wrote: post #9

Buying is better, if you are thinking a bit long term like 4-5+ Years. Now, why I said that: Here’s my story - I had lived in an apartment for 5 years. It’s my longest stretch at one place so far. I paid about $100k in rent for all of those years. When I left that place, I got nothing out of it. If I had a house, then I would had built some equity. Edit: removed - ‘Buying is always better’ from the first sentence

The first several years of the mortgage you are paying mostly interest and not as much towards equity. Plus, you have paid closing costs when you bought, will pay 6% to a realtor when you sell, and have paid property tax and homeowners insurance. If you sell after 5 years, you are only making money if your home value happened to have gone up. This is by no means a guarantee on a short time frame.

So don't sell. Rent the house, take the income and move on. I'm building house #8 right now and the rent from the other homes (some of which are now paid off) provides an income to my family that would keep them housed and fed should something happen to me.

Of course, you have to consider this when you buy because many homes are terrible investments. If you come in with the view that you're buying what will eventually be an investment property you'll make better buying decisions.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#36

Post by nobleach » Mon, Jul 19, 2021, 3:14 PM UTC

mandeepj wrote: post #9

Buying is better, if you are thinking a bit long term like 4-5+ Years. Now, why I said that: Here’s my story - I had lived in an apartment for 5 years. It’s my longest stretch at one place so far. I paid about $100k in rent for all of those years. When I left that place, I got nothing out of it. If I had a house, then I would had built some equity. Edit: removed - ‘Buying is always better’ from the first sentence

> I got nothing out of it

That would be true if you paid that rent, and then went and lived outside in a cardboard box. You DID get something out of it. You got a place to live (potentially maintenance free)

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#37

Post by maest » Mon, Jul 19, 2021, 3:14 PM UTC

bachmeier wrote: post #27

There's no way to put this into a calculator, but this decision isn't purely monetary. Do you enjoy having to maintain a home and property? If not, maybe buying a house isn't for you. Even if you hire someone, that can be a massive hassle, you have to worry about being ripped off, ... If you're not settled in your career to where you can comfortably take off long stretches of time during the day, you probably shouldn…

> Do you enjoy having to maintain a home and property?

Better question is, how much would you pay (or want to be paid) to maintain a property.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#38

Post by silicon2401 » Mon, Jul 19, 2021, 3:14 PM UTC

Based on checking a 500k house with a 50k down payment, this tells me PMI will be about 2k/year for the first 3 years. Is it really that cheap? Is there any reason to not go for a <20% down payment if it allows me to accelerate my house planning by several years, if it only ends up costing around 6k extra?

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#39

Post by swimorsinka » Mon, Jul 19, 2021, 3:15 PM UTC

bachmeier wrote: post #27

There's no way to put this into a calculator, but this decision isn't purely monetary. Do you enjoy having to maintain a home and property? If not, maybe buying a house isn't for you. Even if you hire someone, that can be a massive hassle, you have to worry about being ripped off, ... If you're not settled in your career to where you can comfortably take off long stretches of time during the day, you probably shouldn…

Huge +1 to this. Don't get me wrong, I've been in my house for 10 years, and I probably won't go back to renting, but I think most people wildly underestimate these things.

In the first couple of years I remember getting so irritated by all the time it took to take care of the house and yard. Nowadays, I've gotten used to it, and I view it as a welcome distraction from work, but that definitely wasn't true in the beginning. Even paying someone to do all these things is a large hassle. You have to be at the house to meet contractors, get competing bids, worry about the contractors doing stuff wrong, etc.

I also think people wildly underestimate maintenance costs. I bought a 50 year old house, 10 years ago. I don't think I've had a single year where I didn't have to spend 10K on maintenance. I always wonder how most people handle these expenses - and then I realize that most people just don't take care of their houses.

Re: Show HN: Should I Get a House? a better rent vs. buy calculator

#40

Post by mattgibson » Mon, Jul 19, 2021, 3:15 PM UTC

These calculators seem to miss the point for me.

If I spend less overall by renting, I don't care because I can't pass the property as an inheritance to my kids. If I buy, they get a house for free when I pass on.

Also, if I rent, I have to continue to pay the same (high) rents through retirement where my income will likely drop drastically once I stop full time work. The aim of buying is to be mortgage-free when you retire so your pension gives you a decent quality of life.