My uncle bought his house and pays $300/month in a neighbourhood where rent is $1,500/month on a similar home. He is near the end of a 30-year loan, and will retire soon, paying just property taxes and upkeep. Keeping the long-term in mind, it seems better to buy.
Is It Better to Rent or Buy?
131–140 of 256 posts
Re: Is It Better to Rent or Buy?
#132Two important adjustments when using this: "Investment return rate" -- Only 4%? An index fund will return higher than that. "Monthly common fees" -- Required if you are considering buying a condo. This changes the per month rent comparison dollar-for-dollar.
2% would be more accurate...
Re: Is It Better to Rent or Buy?
#133I'd personally find this more useful if I could start with what I'm paying for rent and get a result of "If you can buy a similar home for less than $xxx,xxx then buying is better."
You can do this by setting all of the sliders except for the home price, then dialing it in until your rent is shown.
Re: Is It Better to Rent or Buy?
#134Would love to see this for lease or buying cars...
In theory, leasing should be much better, since cars don't appreciate in value, negating one of the advantages of owning. In practice, lease prices are so high that it seldom makes sense to lease.
Re: Is It Better to Rent or Buy?
#135Author 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…
Huge props for including things like the Marginal Tax rate for tax deduction and closing costs, which most of my peers that I've spoken to are unaware of or fail to take into consideration properly. I just recently had a conversation with a friend about renting vs buying, and I raced through many of the factors in this calculator to demonstrate that it's not such a simple question and that there are many factors that…
I used it to calculate if buying my house was a better deal than renting. Turns out over 30 years it was exactly the same.. down to the dollar.
Re: Is It Better to Rent or Buy?
#136Author 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…
Your home price maxes out at $3M. That's just a small apartment in Manhattan.
Re: Is It Better to Rent or Buy?
#137My 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…
This is insane and would be illegal in most European countries, AFAIK.
It probably wasn't legal in the US either. The remedy, however, is threatening legal action and withholding rent.
Re: Is It Better to Rent or Buy?
#138I said this when such a thread came up the last time: If you can (easily) switch jobs without moving it might make sense to buy. If you can't, however, renting is the safer option as you can move if/when there is a problem with the job. Domiciles can be rather illiquid at times, which sucks when you need to move for work. It's a separate question if it's worthwhile to buy at all, as that's dependent on geography, pre…
In general, the model doesn't include risk.
Re: Is It Better to Rent or Buy?
#139The problem with this (admittedly very good) calculator is there are two key knobs that require massive amounts of speculation but have a huge impact on the decision: projected return on investment and expected home price growth. Good luck predicting either of these over the next 10 years.
Same with retirement calculators. Step 1, at what age do you plan to die?
Re: Is It Better to Rent or Buy?
#140Earlier quoted context omitted.
Huge props for including things like the Marginal Tax rate for tax deduction and closing costs, which most of my peers that I've spoken to are unaware of or fail to take into consideration properly. I just recently had a conversation with a friend about renting vs buying, and I raced through many of the factors in this calculator to demonstrate that it's not such a simple question and that there are many factors that…
I used it to calculate if buying my house was a better deal than renting. Turns out over 30 years it was exactly the same.. down to the dollar.
Including the fact that you own the house after the 30 years?