Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is It Better to Rent or Buy?

nytimes.com

Post reply on HN
Print view View original

181–190 of 256 posts

Re: Is It Better to Rent or Buy?

#181

Post by toyg »

mbostock wrote: post #18

Author 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…

Great work! Any chance that you could publish a tax-neutral version, which could be used internationally?

Re: Is It Better to Rent or Buy?

#182

Post by lmm »

Frozenlock wrote: post #20
dgabriel wrote: post #11

Earlier quoted context omitted.

Not true in many, many cases. HOAs, condo boards, zoning laws, and historical societies can control homeowners pretty well.

And you still need to pay taxes (rent) to your municipality (landlord). So if I summarize, you can't do what you want with it and you need to pay your landlord. Why are people calling this 'owning' a house?

Because there's no value in having a word for a situation that basically no-one is in? Because despite your sophist argument there are huge practical differences between what normal people call "renting" and what normal people call "owning"?

Re: Is It Better to Rent or Buy?

#183

Post by cbr »

roel_v wrote: post #174
mbostock wrote: post #91

Earlier quoted context omitted.

We’re not currently including mortgage insurance, no. You could approximate it by increasing the mortgage rate, but the tax treatment of mortgage insurance payments may be different and so that may not be accurate. Perhaps this is something we can add in the next iteration of the calculator. The interaction between down payment rate and mortgage insurance rate also reveals a limitation of our user interface: On the o…

"The interaction between down payment rate and mortgage insurance rate also reveals a limitation of our user interface: On the one hand, it’s nice to have all the variables decoupled so that you can set and explore them independently. On the other hand, many of the variables are not independent. If you change one variable, you may need to change other variables to maintain a realistic scenario." Well I'm not sure I'd…

    devise a way for a user to assign a fixed amount to several categories
A slider for each category. When one slider is moved up by 1% of the total the others automatically move down in proportion to their current value to collectively lose 1% of the total.

Re: Is It Better to Rent or Buy?

#184

Post by kokey »

ryanjshaw wrote: post #178
vijucat wrote: post #177

Earlier quoted context omitted.

Not sure why you're getting downvoted for this, it's actually a quite relevant point, i.e., the the side-by-side comparison should include the consideration that you get to enjoy rent-free accommodation in the home for a certain number of years (or even generations!) once it's paid for. It gets more complicated when you have to factor in a positive probability for various outlier events such as the house getting bomb…

Even more complicated: - owning a house may make it harder for you to decide to move and accept a job/opportunity elsewhere, or to travel -- the impact of which is unquantifiable - for some people, by the time they'd finish paying off a house they'd already reasonably expect their parent's to have passed on and left wealth/property; for these people, particularly entrepreneurs, having free capital in the intervening…

You sound like me. That said I still try to buy property, just not where I live, so I look at as purely a long term investment that will hopefully be profitable in the distant future.

Re: Is It Better to Rent or Buy?

#185

Post by colinramsay »

Tycho wrote: post #27

zappo had a list of uk cities comparing rent prices with interest only mortgage price. Some cities eg. Edinburgh showed hardly any difference (for comparable sized properties). What I'm not sure about though is how it compares to a traditional principal and interest mortgage. Obviously your interest payments fall as the mortgage amortises... So then how does total interest compare to money spent on rent in that case?…

I think you might mean Zoopla?

http://www.zoopla.co.uk/press/releases/buying-beats-renting-...

Re: Is It Better to Rent or Buy?

#186

Post by vishnugupta »

millstone wrote: post #57

My 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 why I was forced to buy a home, in India. Two months into new rental place the landlord casually said he's going to sell the place and that I will have to abide by whatever the new owner says, worst case being vacate the place with 2 months notice that had taken us a good one month to find and settle into.

BTW, this isn't an isolated incidence. If you are renting a house in India, you will most like be subjected to the vagaries of land lord.

In the end it all turned out to be good. Now I own my house, decent mortgage and I get tax benefit as well. The net outflow (considering savings on rent and tax benefits) is very much manageable.

In India, if you can afford it, then the decision is fairly straightforward. Buy!

Re: Is It Better to Rent or Buy?

#187

Post by Tycho »

colinramsay wrote: post #185
Tycho wrote: post #27

zappo had a list of uk cities comparing rent prices with interest only mortgage price. Some cities eg. Edinburgh showed hardly any difference (for comparable sized properties). What I'm not sure about though is how it compares to a traditional principal and interest mortgage. Obviously your interest payments fall as the mortgage amortises... So then how does total interest compare to money spent on rent in that case?…

I think you might mean Zoopla? http://www.zoopla.co.uk/press/releases/buying-beats-renting-...

Er... Yes.

Re: Is It Better to Rent or Buy?

#188

Post by roel_v »

cbr wrote: post #183
roel_v wrote: post #174

Earlier quoted context omitted.

"The interaction between down payment rate and mortgage insurance rate also reveals a limitation of our user interface: On the one hand, it’s nice to have all the variables decoupled so that you can set and explore them independently. On the other hand, many of the variables are not independent. If you change one variable, you may need to change other variables to maintain a realistic scenario." Well I'm not sure I'd…

devise a way for a user to assign a fixed amount to several categories A slider for each category. When one slider is moved up by 1% of the total the others automatically move down in proportion to their current value to collectively lose 1% of the total.

Yes, this is the first instinct. But moving all of the others down/up is in the majority of cases not what you want. Imagine you have 100 to spread out over 4 categories. Let's say you start with setting them all to 25. You set the first to 33, then you want to set the second to a desired values except oops, the first one is now no longer 33. Basically in this scenario you have to way to set them all to a precise value without trial and error until you're close enough to what you want.

Re: Is It Better to Rent or Buy?

#189

Post by RobinL »

philfreo wrote: post #149
mbostock wrote: post #18

Author 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…

Very well done! I noticed that one of the biggest factors, unsurprisingly, is Home Price Growth Rate and rent price growth rates. Do you have any sources for the rates historically? Preferably by location.

Great visualisation and nice to see it properly accounts for all considations.

I live in London. Unfortunately, as the calculator shows, change in house prices is overwhelmingly the most important consideration in buying if you're thinking of staying for much more than 2-3 years. Admittedly growth is completely unpredictable, (and also highly inequitable), but to a large extent a decision to buy is based on expected future house prices.

For instance, I have a friend who bought three years ago - a £250k flat which would cost around £1,300 to rent. According to Rightmove and Zoopla (and the price a similar flat next door sold for recently), the monthly gain in value has been around £3,000 (!!). I also note this gain is tax free, so equates to earning more like £5,000 a month pre tax.

Unfortunately these gains are only available to those who earn enough and save enough for a deposit, or more commonly, those who receive parental assistance in purchasing property.

Re: Is It Better to Rent or Buy?

#190

Post by secondForty »

Really neat that you've updated this. One issue: The graphs of grey bars on white background have very little contrast even in different browsers on a nice monitor. The old version of the calculator has much more color contrast between the graphs and background and doesn't have this issue.
Post reply on HN