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

#341

Post by dragontamer » Tue, Jul 20, 2021, 4:46 AM UTC

RHSeeger wrote: post #324

dragontamer wrote: post #241

Earlier quoted context omitted.

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.…

> $1000 is principal, $400 is interest Your numbers don't seem normal. Looking at a mortgage calculator, given a new $370,000 home price, with 20% down, 3.92% interest... the P&I is $1,399. Of that, $967 is interest and $432 is principal. Those numbers are almost the reverse of yours. It wouldn't be until ~year 20 of the mortgage that the numbers would match yours.

Try again: 15-Year mortgage 2.375% interest. Aka: current market conditions. With interest rates so low, your monthly payments are minuscule right now and make the 15-Year a good option.

Any homeowner with good credit scores can right now switch off their current mortgage into a 15-Y 2.375% ish loan.

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

#342

Post by [deleted] » Tue, Jul 20, 2021, 4:47 AM UTC

splitstud wrote: post #306

dragontamer wrote: post #241

Earlier quoted context omitted.

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.…

And 10 years from now inflation will have only increased the tax and insurance. In almost any locale, buying is inarguably the better option.

[deleted]

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

#343

Post by hamburgerwah » Tue, Jul 20, 2021, 4:51 AM UTC

These always fail to take into account enormous legal and tax advantages of purchasing a home. First time home buyer tax credits, IRA tax credit, mortgage interest tax credit, capital gain tax exclusion rollover, one time capital gain exclusion, and on and on.

It is almost always better to a buy somewhere you can afford to given your salary and savings. If you want to pay for a certain lifestyle at the exclusion of owning a home that's just fine but don't pretend it's a better deal.

If you are looking for a good up and coming place I think it is all but guaranteed at this point that homes in and near cameron county texas will 10X if not 100X within a couple of years due to spacex.

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

#344

Post by sakopov » Tue, Jul 20, 2021, 4:53 AM UTC

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.

> 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.

This is typically true if you work for a fang. These insane salaries rarely exist anywhere else.

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

#345

Post by coptun » Tue, Jul 20, 2021, 4:54 AM UTC

sly010 wrote: post #162

Maybe I am just missing it, but I don't see how this factors in the fact that you could invest the same money in the market.

Yep this calc is practically useless. No one is renting and stuffing hundreds of thousands of dollars in cash under their mattress.

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

#346

Post by mapmap » Tue, Jul 20, 2021, 4:54 AM UTC

autarch wrote: post #153

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…

> I'm pretty convinced most people buy because they're either tired of the bullshit that comes with renting or want to buy into a specific school district, not because they're worried about making a return on their investment. Another big factor is noise. A detached house is going to be quieter than most apartments in a shared building. That was the big reason we moved to a house. I'm a light sleeper and noise from p…

One would think that, but I am starting to believe there is a leaf blower running nearby during every daylight hour.

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

#347

Post by mapmap » Tue, Jul 20, 2021, 4:56 AM UTC

hatchnyc wrote: post #217

dougmwne wrote: post #176

Earlier quoted context omitted.

Would your landlord pay you for the improvements you make? Is seems a full interior build out could cost tens of thousands of euros. Why not just buy if you have that much free cash sitting around for a down payment? And what happens if your landlord tries to push you out?

I think this is not going to make sense if your only point of reference is residential rentals in a typical American city, but this is how it is done in at least some places in Europe. People tend to stay in one place for much longer than Americans. If you're on a budget you can go to Ikea and buy a kitchen...based on my friends' places I'd say that's the norm.

Do you take the kitchen with you when you leave or does the landlord tear it down?

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

#348

Post by mateo411 » Tue, Jul 20, 2021, 5:09 AM UTC

iancmceachern wrote: post #271

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…

This is our exact challenge. I do well, work in the bay area, but the down payment, not the monthly, is the main hurdle to homeownership.

I used to think that, but really the monthly income is the harder and more important hurdle. It's not how much you put down, it's how much you can finance.

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

#349

Post by mateo411 » Tue, Jul 20, 2021, 5:14 AM UTC

mapmap wrote: post #347

hatchnyc wrote: post #217

Earlier quoted context omitted.

I think this is not going to make sense if your only point of reference is residential rentals in a typical American city, but this is how it is done in at least some places in Europe. People tend to stay in one place for much longer than Americans. If you're on a budget you can go to Ikea and buy a kitchen...based on my friends' places I'd say that's the norm.

Do you take the kitchen with you when you leave or does the landlord tear it down?

You can only move IKEA furniture once. If you move it twice it will fall apart.

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

#350

Post by motioncuty » Tue, Jul 20, 2021, 5:15 AM UTC

pessimizer wrote: post #118

fennecfoxen wrote: post #77

Earlier quoted context omitted.

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…

> rate of return the money you would otherwise use for the down payment Really the most important number, but all of these suggestions are crucial to the calculation. Money that doesn't get invested in a house gets invested in other things. Pretend it's in an index fund.

But when you take out a morgage you can leverage 800k of the banks money at negative real interrst rates, effectively paying you tens of thousands over the course of the loan and any appreciation of that asset gets multiplied by 5x on your initial down payment.