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

shouldigetahouse.com

71–80 of 424 posts

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

#71

Earlier quoted context omitted.

Being in a unique position of renting out properties that I own while simultaneously renting, it seems like some of this is taken a little out of proportion. My net experience is that the burden of dealing with said landlord to get something fixed or maintained is roughly similar to fixing it yourself with equal pros and cons on both sides. Consider a $150 repair for your AC going out in 95F weather, 70% humidity. La…

> Consider a $150 repair for your AC These are precisely the examples I was cursing after I bought my house. They were the ones existing homeowners always talked about. A $150 repair for the AC is nothing. The prospective homeowner needs to think about things like: "Your roof is shot." The lowest bid is $15,000. Check is due before they leave your property. "Your trees are dying." Cost of cutting them out and replaci…

Having experience with most of these types of issues, I think there might be a bit of a scarecrow here.

In particular, the remedy to each repair is presented as “replacement”. It is my experience with most landlords that they will not “replace” anything unless they 100% absolutely must. When a roof needs to be replaced that has tenants in it, a landlord will patch the roof to avoid replacement for as many years as they can (a roof replacement is a well known item that is inspected prior to purchase) - Like the landlord, the homeowner can elect to patch the roof. A landlord will repair a water heater or AC by any means necessary, not replace it.

As a tenant, you have no say in the repair process. The likely scenario is that the landlord will patch the roof 3 times during your lease and take weeks for each repair. Leaving you to deal with weeks of water running down your walls as you wait for the landlord. (this is known from rental experience)

As a homeowner, you might elect to patch the roof. You could pay in full for replacement. You could pay in monthly installments. You could also choose to install a Tesla solar roof instead. But I don’t think your options as a homeowner will be limited to “check is due in 2 weeks”.

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

#72
post #68

Earlier quoted context omitted.

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 du…

Selling your house in an emergency would be similarly bad as exiting the stock market at an unfortunate time. The long-term ROI after costs and inflation of stocks (global) is about 3% higher p.a. than of property (global). Unfortunately this source is in german, but it cites research papers too, you can check those for further investigation: https://www.gerd-kommer-invest.de/die-rendite-von-direktinve...

Buying a house can have an advantage over stocks in the leverage you get with a mortgage, and in certain cases tax incentives. Whether that’s enough to compensate for the better returns of stocks is the hundred thousand dollar question.

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

#73
post #67

"Apartment" means rent and "House" means buying? I think that's confusing. It would be nice to auto update the graph every time something changes. It's nice that it has tips. Hi from Argentina! We have a somewhat different customs here so some fields are hard to guess. For example, I don't know if I can fill my taxes jointly. Another detail that confused me is that I didn't expect to sell the home after 14 years. It'…

A lot of things out of SV are built around American culture. "HOA", "State income taxes". "Property tax" as a percentage. Which is fine, but it's sad how it's just assumed a site on a .com is for america only. Of course a monoculture of 350 million customers is more than pretty much any other country which explains why SV produces so many successes. Defaults are crazy too - $2,750 for home insurance?!

I see this like a personal project, so I don't mind some local bias. I thing it's a good post.

HOA: I can translate it to the monthly payment in my building to pay for the cleaning, electricity for the lift, and other stuff.

House vs Apartment: I think it's confusing. It's correct for the personal case of the OP, but it's confusing for everyone else.

Mortgage interest <= 10%: In pesos? :) Most mortgages here are now in a fake money "UVA" that somewhat tracks the inflation. So if the interest is 5% in UVAs and the annual inflation is 40%, the actual interest is 45% (approximately, read the fine print before signing).

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

#74

One piece of millenial defeatism I hear a lot is "Ugh, I'll never be able to afford a 20% down payment, home ownership is impossible" I'm not sure where this myth came from, but as a millenial who went through the buying process in 2012 and again in 2016, I remember both times the lender just asked how much we wanted to put down. We could have gone as low as 3%, or maybe even lower. Yes, you have to pay PMI (private…

Very true. FHA loans let you put as little down as 3.5% for first time buyers. I wouldn’t recommend it but the opportunity is there.

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

#75

One piece of millenial defeatism I hear a lot is "Ugh, I'll never be able to afford a 20% down payment, home ownership is impossible" I'm not sure where this myth came from, but as a millenial who went through the buying process in 2012 and again in 2016, I remember both times the lender just asked how much we wanted to put down. We could have gone as low as 3%, or maybe even lower. Yes, you have to pay PMI (private…

There are companies such as proportunity that will co-invest your downpayment as well

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

#76
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…

>> My wife wants to buy a house...

A pilot once shared with me the rule of the three F's. If it floats, flies, or fornicates, it's cheaper to rent than to own. You may substitute a 4 letter word for that last one.

Anyway, you got a wife already so thats one. House don't start with F, so buy.

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

#77
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…

This is missing a rate of return on the money you would otherwise use for the down payment, information on whether that return would be taxable or is sheltered in a Roth or similar tax shelter, current and anticipated tax brackets if one sees that income taxed (at both time of sale and possibly retirement), current and anticipated capital gains rates that might apply to the gains from the home sale in the future (if you're over the threshhold)...

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

#78
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…

This is nice. I definitely played around with some calculators like this when I was deciding to buy a house a few years ago. Off the top of my head, some things I'd add to make this more useful to a wide audience: - I don't know what I pay in state income and sales taxes. But I do know my income and my state's tax rate; income tax could be derived from that. I'm not sure how you'd estimate sales tax, though - you'd h…

Maintenance cost likely scales with both size and cost. Size, for obvious reasons, and cost because the labor/materials cost of a repair is likely correlated with housing prices in the area. You then have to account for the portion of cost that's already correlated with size...

+1 to mortgage length. We heavily pivoted our decision to buy on getting a 7 year ARM because my friend and I knew we wouldn't grow old together there (wanting to do things like get married and have our own families). A time bomb on the mortgage was a feature, for us, and a cost savings.

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

#79
post #37

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.

If it was my house, I'd do it for free.

If it was your house, I wouldn't do it for any price.

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

#80
post #69
post #63

Earlier quoted context omitted.

Great point about the PMI. For rent growth, do you think I should use the home price appreciation rate or make a new rate? Right now rent goes up with inflation.

I would make a new factor, so that people can input expected increases for their areas. I would expect many urban areas will continue to see rent increases far in excess of the broader inflation number. Rents may not track home prices due to supply issues.

There are also jurisdictions with capped rent increase amounts, which can be in favor the other direction
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