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

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

#331

Post by ransom1538 »

Spooky23 wrote: post #294
ransom1538 wrote: post #250

Earlier quoted context omitted.

"..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.

Yes. There is a 1031 exchange. That is when you purchase another like kind investment property. I should have stated during a 'sell'. Lots of landlords actually need to sell homes. So no, a competent accountant will not avoid it during a sell.

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

#332

Post by chii »

lumost wrote: post #330
JMTQp8lwXL wrote: post #254

Earlier quoted context omitted.

If you had a significant other with a similar upper middle class wage, e.g., $220k * 2 = $440k you could probably swing it with more breathing room. You are wise to avoid the burden, in the chance you technically qualify for the mortgage but barely so in the Bay Area (e.g., leaving you house poor). The fact that home affordability requires a HH income in the top 2-3% is, to put it mildly, highly concerning. It makes…

220 is a wage at the upper end of what can be typically made by the time your 30 if you’ve chosen the right careers. There are notable exceptions with recent top tech offers - but I work for a fang as a software engineer and didn’t break 200 take home until I turned 32. If you need 2x those incomes to afford A basic necessity such as housing than we’re likely to have a problem.

> break 200 take home

Does take home mean excluding equity grants? a lot of the compensation from tech firms these days would be some form of equity.

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

#333

Post by [deleted] »

anonAndOn wrote: post #196
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…

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.

[deleted]

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

#334

Post by chii »

nwatson wrote: post #281
JMTQp8lwXL wrote: post #254

Earlier quoted context omitted.

If you had a significant other with a similar upper middle class wage, e.g., $220k * 2 = $440k you could probably swing it with more breathing room. You are wise to avoid the burden, in the chance you technically qualify for the mortgage but barely so in the Bay Area (e.g., leaving you house poor). The fact that home affordability requires a HH income in the top 2-3% is, to put it mildly, highly concerning. It makes…

Or work remotely. One can make way above prevailing local salaries working remotely for SF Bay Area companies.

I think this cannot last for long - supply and demand would push wages down as more people are available for the position.

May be not this year, or next, but the long term trend of work-from-home will make this true.

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

#335

Post by lumost »

chii wrote: post #332
lumost wrote: post #330

Earlier quoted context omitted.

220 is a wage at the upper end of what can be typically made by the time your 30 if you’ve chosen the right careers. There are notable exceptions with recent top tech offers - but I work for a fang as a software engineer and didn’t break 200 take home until I turned 32. If you need 2x those incomes to afford A basic necessity such as housing than we’re likely to have a problem.

> break 200 take home Does take home mean excluding equity grants? a lot of the compensation from tech firms these days would be some form of equity.

it does not :shrug:

EDIT: For more detail, many of the higher comps you hear about for junior engineers come from stock that appreciated much faster than the company intended when they decided your comp. The more Senior roles at most big tech companies also tend to require ~8-10 years of professional experience to be hired externally.

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

#336

Post by dlivingston »

nodesocket wrote: post #259
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…

Similarly, I bought last Sept in Nashville, TN and Zillow says my house is up 13.5% already. The Nashville housing market is especially ridiculous, it's one of the hottest in the US. > Relatedly, a ~70 year old woman bagged my groceries today and I doubt she's doing it for fun. Seems the accelerating wealth inequality is destroying our society/communities if it hasn't already. Let's not forget about the error in exte…

In contrast, those companies that are offering $15+/hour wages are seeing applications through the roof. [0]

I don’t mean to discount inflation, as it will likely be an increasing issue in the immediate future [1].

But it’s very clear that the issue isn’t unemployment stipends: it’s the low wages of working class jobs that are the issue. Unemployment and the pandemic seemed to just be the push for many people to realize their worth as human beings is more than $7.50/hour.

[0]: https://www.washingtonpost.com/business/2021/06/10/worker-sh...

[1]: https://www.axios.com/ceos-warn-inflation-alarm-sound-da5e2d...

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

#337

Post by chii »

Thrymr wrote: post #211
benglish11 wrote: post #201

Earlier quoted context omitted.

Don’t Germans generally move their whole kitchen? I think I remember this correctly from taking German a bunch of years ago.

I really do not get the appeal of moving your own cabinets from apartment to apartment. But I guess it does allow you to customize your rented place more than is possible in the US.

> cabinets from apartment to apartment.

unless these cabinets are somehow standarized sizes, how can they be moved?

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

#338

Post by refurb »

kelnos wrote: post #321
missingrib wrote: post #238

Earlier quoted context omitted.

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

If your building has HOA dues, renting doesn't mean you aren't paying it; it just means your landlord built the cost of it into your rent. Same with property tax and the landlord's home insurance payment. After which, if you want to be safe, you then need to spend more to get renter's insurance. And I would expect a landlord would build estimated repair costs into the rent as well, at least to some extent. Of course…

I see this claim a lot - "you can't save on rent because your landlord has to cover their costs".

But this is only true if your landlord purchased at the time you rented. I rented a $1.8M apartment for $3,000 per month (~1/3 of total ownership costs). That's because my landlord bought 20 years before when the apartment was worth $200k. His monthly costs were maybe $1,000.

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

#339

Post by adrianN »

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…

Sell the house, and together with the savings you might already have you can do the FIRE thing somewhere where living is cheap.

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

#340

Post by extortionist »

pessimizer wrote: post #126
Finnucane wrote: post #7

Earlier quoted context omitted.

Probably want to allow for the possibility of rent rises over time. One thing that I think this actually shows pretty well is the notion that part of the answer depends on how long you intend to stay in a place. If you expect to move in two or three years, it's probably not worth the hassle/expense of buying. If you intend to stay 5+ years in one place, it makes more sense to buy.

> Probably want to allow for the possibility of rent rises over time. Isn't that counting inflation twice?

Rents are only a part of inflation measurements and can easily outpace the general rate.

California's recent rent control laws caps rent increases at 10% or 5% + the yearly CPI increase (whichever is less) every year, for example, explicitly allowing rent increases to outpace the general inflation rate. Personally, the rent I pay has gone up 9% this year.

Rents can change based on whether an area becomes more or less desirable, as insurance or other costs for landlords change, as ownership of rental units consolidates, etc.--that is, for many reasons that might be only tangentially connected or even completely divorced from the reasons that the costs of other goods and services are changing.

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