There is nowhere that I particularly want to live that I could possibly afford to buy in, though.
Broaden your horizons, perhaps? Manhattan & downtown San Francisco are not the only interesting places in the world.
Is It Better to Rent or Buy?
51–60 of 256 posts
Re: Is It Better to Rent or Buy?
#52When interest rates are low, prices are high, and when rates are high, prices are low. It's fairly straight-forward. Your payment works out about the same. You should buy when rates are high and prices are low because you can renegotiate the rate later. You can't renegotiate the price.
Rates are still pretty low now, and thus I continue to rent.
Re: Is It Better to Rent or Buy?
#53I resisted buying for a long time for mostly flexibility reasons. Eventually, with a 2.85% 15 year rate and a roughly 2.5% home price growth rate it was just stupid not to buy.
This is a great tool. I would have to find a rental for nearly half (60%) the going rate in order for renting to make sense in my area.
Re: Is It Better to Rent or Buy?
#54Earlier quoted context omitted.
If you rent, you can leave whenever the heck you want and then go live wherever the heck you want. That's true freedom and to some people - myself included - worth every penny. Its really interesting the different things people value. I value not fundamentally worrying if there were to be an earthquake and this place would be destroyed. I value one day waking up and deciding, hey, I think I want to go try living in P…
From what I've seen, you generally need a 12-24 month lease to rent a house. I can sell my house whenever I want (or leave and rent it out to someone else), but if I'm stuck in a 24 month lease I'm stuck for the next 2 years.
In some cases you can get month-to-month, it just may cost you more. You can always break your lease but there's a financial penalty of some form for that.
In most cases you can only sell your house if someone is willing to buy it. Although renting it out is an option but you'll still be tied to, and responsible for, the property.
Personally, I don't see the big deal; there are pros and cons both ways.
Re: Is It Better to Rent or Buy?
#55Author here. Thought I’d highlight my favorite, perhaps non-obvious feature: the slope of the charts tells you whether the variable is positively or negatively correlated with the cost of buying. And depending on the settings, that slope can change from positive to negative. For example with the defaults, the down payment chart is flat. This means the total cost of buying is relatively unaffected by the size of your…
Do you have a link to Felix Salmon pointing out that this demonstrates Modigliani-Miller?
Edit: Thanks!
Re: Is It Better to Rent or Buy?
#56Author here. Thought I’d highlight my favorite, perhaps non-obvious feature: the slope of the charts tells you whether the variable is positively or negatively correlated with the cost of buying. And depending on the settings, that slope can change from positive to negative. For example with the defaults, the down payment chart is flat. This means the total cost of buying is relatively unaffected by the size of your…
According to the Modigliani–Miller theorem, the mix of debt (size of mortgage) and equity (down payment) is only irrelevant in a world without taxes. However, mortgage interest is tax deductible, while rent is not, so their result doesn't apply here.
The flat down payment chart is a coincidence, based on the default values for interest and inflation rates, growth rates and expected returns.
Re: Is It Better to Rent or Buy?
#57My wife and I found a great apartment to rent. It was spacious, quiet location, reasonable rent. We were happy for a few years.
Then the owners sold the complex, and the new owners set out to remodel everything, very much against our wishes. Construction crews started entering our apartment. They came in while we were out, laying down plastic sheets and moving our furniture around. They sometimes came in while I was sleeping, and while I was getting dressed. It was humiliating: I felt stripped of my privacy and dignity.
Buying allows you to control your property, but more significant to me is what renters must endure: arbitrary changes to their home, allowing unfamiliar men to enter their homes uninvited, etc. As a homeowner, nobody enters my home uninvited, unless they have a search warrant!
Re: Is It Better to Rent or Buy?
#58Would love to see this for lease or buying cars...
The NYTimes did do it, it's just not as slick as the housing rent vs. buy calculator.
http://www.nytimes.com/2013/09/21/your-money/car-leases-grow...
http://www.nytimes.com/interactive/2013/09/21/your-money/To-...
Re: Is It Better to Rent or Buy?
#59Author here. Thought I’d highlight my favorite, perhaps non-obvious feature: the slope of the charts tells you whether the variable is positively or negatively correlated with the cost of buying. And depending on the settings, that slope can change from positive to negative. For example with the defaults, the down payment chart is flat. This means the total cost of buying is relatively unaffected by the size of your…
[deleted]
Re: Is It Better to Rent or Buy?
#60Author here. Thought I’d highlight my favorite, perhaps non-obvious feature: the slope of the charts tells you whether the variable is positively or negatively correlated with the cost of buying. And depending on the settings, that slope can change from positive to negative. For example with the defaults, the down payment chart is flat. This means the total cost of buying is relatively unaffected by the size of your…
Do you have a link to Felix Salmon pointing out that this demonstrates Modigliani-Miller? Edit: Thanks!