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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

#291

Post by gwbas1c »

crazygringo wrote: post #149
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…

Funny, I'm the opposite. The more I get older the less I want to deal with bullshit home maintenance, and the infinite time suck that is customization and endless improvements. Really part of a general life shift from "if you want it done right, do it yourself" and "if it's worth doing, it's worth doing right" -- to "outsourcing is a valuable tool" and "perfection is the enemy of the good". I realize my time is valua…

Honestly, I think both of you have much better insight into the "rent or buy" tradeoffs than any calculator can provide.

Personally, I only think renting is "worth it" if you can't afford the house you want, or you just don't like homeownership. I also think owning is only "worth it" if you like the freedom to do whatever you want to your property or plan to stay put for a long time. No calculator can decide that for you.

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

#292

Post by mariojv »

carabiner wrote: post #99
drfuchs wrote: post #47

Where do I enter the intangible value of owning: "Don't have to worry about getting priced out if the neighborhood becomes popular; can do any improvements I want, when I want, how I want, and they become an asset; don't have to worry about not getting lease renewed at an inconvenient time (perhaps in the middle of a school year) when the owner's nephew gets divorced and needs a place; on the other hand, don't have t…

> can do any improvements I want, when I want This is the main thing I'm wondering about. Most people I know who own homes enjoy working on them. Home improvement becomes a hobby that they like, whether it's basic plumbing or painting the walls or building a deck. I despise this work (even though I do basic carpentry), and I fully consider it work that detracts from my life. It's like doing the dishes, it's a chore,…

I think it is still worthwhile, especially if you have an interest in privacy. In an apartment, a landlord is generally allowed to have reasonable access to the premises, can choose whoever they want to do the repairs, etc. They generally control the property.

With a house, even if you have all maintenance outsourced, you choose who performs the labor and when they do. My last apartment was horrible with surprise inspections, and I've had similar issues with them scheduling contractors at inconvenient or unknown times. It's much nicer owning a home even if you don't like doing the maintenance yourself.

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

#294

Post by Spooky23 »

ransom1538 wrote: post #250
hardtke wrote: post #161

Earlier quoted context omitted.

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...

Anyone with a competent accountant will avoid that. You can invest in like investments and avoid recapture.

There’s a whole industry around this generation of “free money”. The owner of a Hampton Inn / Fairfield Inn, etc, makes more money on selling off accelerated depreciation than on renting rooms.

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

#295

Post by wonnage »

majormajor wrote: post #157
alach11 wrote: post #125

Earlier quoted context omitted.

The determination of whether to buy the house is based on the calculated rate of return. So even if you make a profit, if the time horizon is large you’d be better off investing that money in stocks. The UI doesn’t make that clear enough.

> The determination of whether to buy the house is based on the calculated rate of return. So even if you make a profit, if the time horizon is large you’d be better off investing that money in stocks. Can you give a more detailed example? What time horizon are you picturing? After you pay off the house you lose the leverage advantage of returns on selling a house you bought with a mortgage vs selling stocks, but you…

Stock returns are generally higher than real estate. So you might start off with higher YoY values for the house initially, due to leverage (1.03x a big number vs 1.07x a small number), but stock would catch up over time.

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

#296

Post by mariojv »

waylandsmithers wrote: post #43

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…

I understand this is necessary for a lot of buyers, but if you are able to afford more of a down payment, it can be more prudent financially. Besides avoiding PMI, you're less likely to be underwater on the loan. If you only have 5% equity, you will have to pay to move if your home price drops more than 5% and you have to move for a job or other circumstance. 20% is a lot, but if it's doable, it gives you more of a buffer in the event of some bad luck.

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

#297

Post by Johnny555 »

Spooky23 wrote: post #285
Johnny555 wrote: post #222

Earlier quoted context omitted.

but apartment building owners didn't see a corresponding increase?

Landlord insurance goes up but only covers the structure and costs less, while homeowners covers more perils and contents.

Yes, but in an area with such a hurricane risk that it led to an increase so great that it more than doubled someone's home mortgage, it would have had to have had a large impact on landlord's structure insurance, raising rents. For someone with a $1000/month house payment, that's $24,000/year in extra premiums.

If that's a $200,000 house, in 10 years the extra premium would cover the house... I don't see how landlords could escape levying a rent increase when faced with such a huge increase in insurance prices.

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

#298

Post by gwbas1c »

FYI: Historically home values keep place with inflation. Homes will depreciate in many markets if they aren't maintained; or sometimes just because the value doesn't go up as fast as inflation.

Inflation is really around 4%.

(I figured this all out when I built a house a few years ago.)

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

#299

Post by NegativeLatency »

throwaway0a5e wrote: post #219
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.

Yeah, pretty much anywhere California money is cashing out and fleeing too is way more insane than California itself.

Traveled though Missoula this summer and the housing market is absolutely wild.

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

#300

Post by TravHatesMe »

Spooky23 wrote: post #290
TravHatesMe wrote: post #276

Earlier quoted context omitted.

Taxes are a function of municipal costs and the value of all properties. If they all go up equally in value and costs remain constant then your taxes should not increase

In theory, you are correct. In practice, in a city or area with different valuations it may vary. For example, in my city, 70% of households rent and half of those are in the hood. Bad neighborhood valuations are essentially a factor of Section 8 prevailing rent, and many properties fall off (as they stop meeting HUD standards) and get abandoned as they decay, because slumlords. The effect is that in a good neighborh…

Great point. I wanted to point that out though because some people assume that there is a proportional relationship between property value and taxes.
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