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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

#401

Post by mateo411 »

wil421 wrote: post #195
duped wrote: post #90

Earlier quoted context omitted.

I mean this is the definition of a strawman argument. Whether it's 10 or 20% down payment is not that significant. Even 5% is un-affordable. The median sale price of a home was $347,000 last month (0). 5% down on that is $17,350, accounting for closing costs you're going to need around $24,000 in cash to purchase a home. Which isn't all that much money, except if you consider that it's more than 1/3rd of the median f…

Who pays closing costs when you are buying a house for the first time?

Closing costs are market dependent. Whether you are first time buyer or an nth time buyer, it doesn't matter.

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

#402

Post by Spooky23 »

ransom1538 wrote: post #331
Spooky23 wrote: post #294

Earlier quoted context omitted.

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.

Oh totally agree there, accountants aren’t magicians. But planning is part of accounting competence.

For example, you could avoid this issue by not deducting, or do a like kind purchase if something that produces income more passively.

If a landlord just bungles around without knowing what they are doing, recapture taxes are probably one of many issues they are facing.

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

#403

Post by _nothing »

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…

I'm confused at your invocation of that quote. Are you saying the solution to this woman having to work a job she doesn't like is to force low income workers to work jobs they don't like? And the flood of low income workers who have no choice but to work these jobs will alleviate wealth inequality?

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

#404

Post by FireBeyond »

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…

> And then your current landlord gets some shitheel realtor to rent the place who repeatedly tries to schedule showings on an hour's notice.

Yup. "We know you work from home so we've told the realtor to be considerate of your time". Bear in mind I have a dog and a cat.

4 days and FOURTEEN showings later (often spaced with little gaps, so it's in and out not blocks of time), I'm complaining to the landlord, who agrees that that is ridiculous. Realtor: "Oh well, it's a hot market and they'll be out of the house soon enough."

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

#405

Post by FireBeyond »

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.

Huh? My landlord wasn't eating the HOA costs out of the goodness of his heart, that's a lost cause whether you rent or own.

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

#406

Post by Johnny555 »

chiefalchemist wrote: post #374
Johnny555 wrote: post #207

Earlier quoted context omitted.

Owning is nice. But it's more limited and more time consuming. There's a cost associated with that. I'm not sure I agree that owning is limiting, it can be more time consuming if you don't want to hire people to do the work that the condo gives you "for free", but there are few limits. In my last condo, a neighbor spent months trying to get approval to put a pre-fab sauna on her outdoor patio, she submitted the archi…

Limited as in, you can't simply upgrade or down grade in say BRs or baths or location, or yard. Owning is a commitment. And there's absolutely nothing wrong with that commitment; other than the fact there are costs associated with that. Those forgotten costs are often significant.

Ahh yeah, that's mostly true, but it's still possible to add a room to a house, or change the yard to suit your needs, so I still think owning a house is less limiting.

Though what you're calling a "limit" is really lack of stability -- you're free to pick up and move at any time when you live in an apartment, but your landlord is also (usually) free to ask you to leave at any time, so you can't count on having a long term stable place to live.

I was forced into leaving my last 2 apartments, one was was the owner wanted to stop renting and move back in to her place. The other was when the owner raised the rent by nearly 50% at the end of the lease term.

Now that I'm a homeowner, it's much less likely that I can be forced out of my home.

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

#407

Post by FireBeyond »

ramraj07 wrote: post #358
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.…

If your mortgage is lower than the rent that means your location appreciated very significantly. Given stagnant prices mortgage being lower than rent doesn’t make sense. Now the question for someone buying today is if they expect that to happen in the future. For me the answer is not positive enough to gamble buying a place.

My mortgage is $3,000/month. My rent at the place I moved out of would have been $2,500/month.

That's very little difference, ultimately, when it comes to the equity part of the equation.

I've had some upfront costs in the first three months, but none were surprises (appliances, knew that the AC was past its usable life.

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

#408

Post by FireBeyond »

BeetleB wrote: post #142
madcaptenor wrote: post #29

Earlier quoted context omitted.

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…

> I've heard a rule of thumb that home maintenance costs are 1% of the home's value per year It's a very poor rule of thumb. Contrary to the other comment, these costs don't increase linearly with value of the house. Sure, if I live in an expensive area, it may go up 30%, but not much more. Looking at how much my house has appreciated, I can assure you I pay not much more in maintenance than when I bought it. The 1%…

There's a very interesting subset of people on Reddit's Personal Finance forum who seem to think that buying was the right move (kinda, see below) for them, but that renters "don't know how good they have it".

Watch any one of the threads on "should I buy/can I afford/pros/cons", and you'll see a vocal subset who seem hellbent on convincing people that owning a house is nothing more than opening your wallet/checkbook/credit card every other weekend for the "next four digit maintenance issue".

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

#409

Post by FireBeyond »

toast0 wrote: post #137
anomaloustho wrote: post #49

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…

> Also worth noting that a home warranty program helps a lot with these things both for my landlord and for myself as a landlord. Not the home warranty programs I've had, which seem to be focused on getting revenue via call-out fees and not doing a whole lot else. Even when the last one replaced an air handler because of a bad fan (seemed like they could have replaced the fan, but I dunno), and gave me a check to rep…

Oh yes. My HVAC system died before the recent PNW heatwave. Three days plus of 110F+. A week or so of ~100F either side, a week or so of ~90F either side.

Despite me being able to find a HVAC repair company able to come out the next day, warranty company said they would not reimburse anything because they were able to find a company in their network... that could come and see me in just under four WEEKS.

"Oh, I understand it's an emergency and that's very hot. This is our policy."

I canceled that call-out. And then had to remind them that that meant they should also refund the call-out fee.

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

#410

Post by moqca »

gruez wrote: post #24
csomar wrote: post #11

Why is the mortgage interest capped at 10%?

Seems like a reasonable cap when the average rate for 30 year fixed rate is currently 2.88% https://fred.stlouisfed.org/series/MORTGAGE30US

A good interest rate in Mexico is 9%, with the most common form of mortgage being around 12%
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