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

shouldigetahouse.com

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

#241

Post by dragontamer »

missingrib wrote: post #238
dragontamer wrote: post #213

Earlier quoted context omitted.

But you don't "lose" or "spend" the equity portion of your mortgage bill. That's the difference. If you have a $2500/month mortgage, by year 10 or so that's probably $1000 equity + $1500 interest. The "interest" portion gets tax-deducted (so you get a portion of it back), while the $1000 equity is literally yours. When you sell the house, that's the portion you get back. --------- So really, $2500/month mortgage (aft…

You are ignoring costs that are truly just lost and don't exist with a rental payment, like repairs and insurance and HOA, etc.

But I'm not ignoring them.

I'm currently paying a $1600 / month mortgage, of which $1000 is principal, $400 is interest and $200 is escrow (tax / insurance) in an area with $2000/month rent.

So I'm really paying $600 / month for interest, tax, insurance. It's another $1400/month before I get to rent prices.

And even with a new roof and new deck last year, I'm no where close to renters prices in terms of actual cost. Especially considering that I had no maintenance costs in 2019 (lucky year)

And those $2000/month apartments are literally my next door neighbors. I get way more room than them, a private garage and lots of other benefits. (Those apartment dwellers occasionally ask me if they can park in my driveway when space runs out. That's how close they are.).

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

#242

Post by hnhousingthrow »

hnhousingthrow wrote: post #188

These calculators don't reflect the reality/absurdity of the current economy. Anecdotal, but I bought a house in eastern California last year for $600k, now Zillow says it's worth $835k. Also, I'll unlikely ever be able to afford a house in the Bay Area, even though I make $220k/year at a company there. Still don't know what I'll do if my employer makes us return to the SF office in a few months. Relatedly, a ~70 yea…

Just to follow up on a deleted comment that thought I was complaining, I guess my point is that decent housing (both renting and owning) has become unaffordable for most people. High-income earners like myself will be okay, if okay means spending half of my salary on rent where I literally step over homeless people as part of an hourlong commute. My greater fear is what happens to the "essential workers", the heroes making $15/hr? What happens when the firefighters, EMTs, teachers, grocery store workers etc have been priced out of the state?

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

#243

Post by spfzero »

ramraj07 wrote: post #172
mauvehaus wrote: post #119

You get old enough, and you get tired of somebody else making decisions from afar that affect your day to day life with no real consequences to them. Little things like the kitchen layout being moronic and having zero drawers get old when it isn't your choice to remodel or live with it. And while it's nice to say "just move", let's not forget that moving costs a couple months rent and a massive time investment to fin…

Eh, almost no one I’ve seen has ever spent less by moving to their own home. They’ll typically end up spending at least half of what they spent as rent just on things other than the mortgage (which would typically be much higher than the rent by itself). Now of course they often would get a larger, nicer place that’s exactly what they wanted, but let’s not kid ourselves that home ownership is somehow cheaper. It neve…

You can definitely spend less when your mortgage is paid off.

But I'll admit that part of my reason for buying was to prevent the situation where I might be living on a fixed income some day, and having my rent go up every year. That seemed like a good thing to try to prevent.

Buying a house requires a high monthly payment, which remains constant over time, and one day ends. Renting requires a high monthly payment that rises over time, sometimes unpredictably, and never ends.

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

#244

Post by onecommentman »

1. Do you have strong positive family ties to the area? Including in-laws.

2. Is your area where you’re currently living your querencia, your place of the heart? As contrasted against just the first place you landed after university.

3. Do you have or expect to have kids in the near future, or does your ideal potential mate want kids?

If the answer is yes to any of these three questions, lean towards house.

Overheated markets? Not your querencia? Want your family raised in a detached house in a decent area but priced out for the foreseeable future? You have a relocation decision, not a rent/buy decision.

Bonus question: Can you support two mortgages, or rent+mortgage? There are a lot of paradises where you can build a house pretty cheaply. Rent for work, and build/buy for life. There’s a Buddhist calm that comes over your life when you own your own house free and clear in a place you love.

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

#245

Post by sokoloff »

bluefirebrand wrote: post #160
sokoloff wrote: post #159

Earlier quoted context omitted.

If you're worried about losing a couple months' rent, kitchen remodels are not for you...

A kitchen remodel is done once and probably not again until you sell and someone else moves in. Moving rentals every time something annoys you could be very frequent.

The household who would move every time something annoyed them in a rental does not seem likely to remodel only the kitchen and nothing else between the time they buy a house and sell it. (You have to either tradeoff kitchen remodel costs against kitchen annoyances or many remodels against many annoyances, but it seems unreasonable to tradeoff kitchen remodel against all annoyances.)

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

#246

Post by refurb »

hardtke wrote: post #161
gedy wrote: post #135

Earlier quoted context omitted.

Similarly I've hated renting from owners doing it for the "investment", where the going rent is typically much cheaper than the mortgage for the property (California). Many landlords think they are giving you some great deal when they are the ones who bought beyond their means..

For multifamily housing the price of a building is usually such that if you put around 40% of the purchase price down the building is cash flow break even after mortgage, taxes, expenses. The same is basically true if you buy a house to rent out. This is the case because over long periods of time real estate has appreciated by 8% per year with much less volatility compared to the stock market, and favorable tax rules…

I don’t know about CA, but in Toronto there are so many “investment” condos that renters can get great deals. Renting a new condo for $2,000 per month that costs $800,000 to buy (~$4,000 per month total costs with HOA and down payment opportunity cost) is an amazing deal.

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

#247

Post by 1123581321 »

duped wrote: post #237
1123581321 wrote: post #104

Earlier quoted context omitted.

5% is not not 3x the median savings balance of families seriously trying to buy a home. That’s setting aside that lower income families tend to live near lower priced homes. Lower down payments meaningfully increase access to real estate. It matters hugely to be able to accelerate purchase timing by years, or decades.

This reads a bit like "if you exclude all the people that can't afford a home, then the data suggests everyone can afford a home." Of course lower down payments increase access to real estate. The problem is half of all Americans can't even afford closing costs, let alone a down payment.

Close-it’s saying that there is a group of Americans approaching a 3.5-5% down payment who are in economically similar situations to people without savings, the difference being their saving/spending priorities.

Appreciate the concession about the lower down payment mattering.

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

#248

Post by mindslight »

kube-system wrote: post #106
asdff wrote: post #96

Earlier quoted context omitted.

You still hear of people in these markets snagging homes for like 5% down even with the competition. Maybe I misunderstand, but you don't pay any realtor any money until you buy the home. Seems that there isn't any pain being 'in the market' continually getting out offered 99 times out of 100, if it means you get an offer that one time and are going to be renting anyway until then. Plus the whole time you are presuma…

Yes, but if you make an offer contingent on bank financing, and someone else makes an offer contingent on nothing, which offer would you choose as a seller? Guaranteed money now? or probably getting money after the bank completes their paperwork? Many people selling a home already have another home somewhere else, and they're not interested in keeping around another empty house to make payments on.

Even if you're financing, you don't have to make your offer contingent on financing. It puts your deposit at risk, but it might be easier than finding a seller who will accept that risk.

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

#249

Post by handmodel »

jb775 wrote: post #232
anonAndOn wrote: post #196

Earlier quoted context omitted.

I submit the housing market of Phoenix, Arizona as an example of peak bubble. There are numerous houses on the market today that were previously sold... ~30 days ago. This feels more ludicrous than the speculative housing bubble of '07.

The fact that you and everyone else claim we're in a peak bubble is evidence to me that we're not in a peak bubble.

not a bubble in the sense that building new housing in most of California is practically illegal given the amount of local points of veto and existing zoning

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

#250

Post by ransom1538 »

hardtke wrote: post #161
gedy wrote: post #135

Earlier quoted context omitted.

Similarly I've hated renting from owners doing it for the "investment", where the going rent is typically much cheaper than the mortgage for the property (California). Many landlords think they are giving you some great deal when they are the ones who bought beyond their means..

For multifamily housing the price of a building is usually such that if you put around 40% of the purchase price down the building is cash flow break even after mortgage, taxes, expenses. The same is basically true if you buy a house to rent out. This is the case because over long periods of time real estate has appreciated by 8% per year with much less volatility compared to the stock market, and favorable tax rules…

"..claim those losses to offset other income"

Be careful. If you are thinking of renting out a house remember you need to return a large portion of that depreciation back to the IRS. It isn't free money. Even professional landlords don't know about this.

https://homeguides.sfgate.com/paying-back-depreciation-renta...

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