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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

#321

Post by kelnos »

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.

If your building has HOA dues, renting doesn't mean you aren't paying it; it just means your landlord built the cost of it into your rent. Same with property tax and the landlord's home insurance payment. After which, if you want to be safe, you then need to spend more to get renter's insurance.

And I would expect a landlord would build estimated repair costs into the rent as well, at least to some extent. Of course that doesn't mean something unexpectedly expensive couldn't happen.

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

#322

Post by sjg007 »

bluefirebrand wrote: post #160
sokoloff wrote: post #159

Earlier quoted context omitted.

If you're worried about losing a couple months' rent, kitchen remodels are not for you...

A kitchen remodel is done once and probably not again until you sell and someone else moves in. Moving rentals every time something annoys you could be very frequent.

Kitchen remodel is probably 30k plus. You can move many man times for cheaper. Lots of places accept $500 security don’t have to put in 1.5 months.

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

#323

Post by WarOnPrivacy »

throwaway09223 wrote: post #270
WarOnPrivacy wrote: post #251

Earlier quoted context omitted.

> If that's the price houses are selling for, that is the market price. I'll rephrase it this way. Cash buyers are paying way above and beyond what the house was listed for. Likewise prospective renters are offering rents above what is advertised.

Yeah, but people are listing low to attract more eyeballs. I sold a place in the bay area 5 years ago. I knowingly listed it about $200k under what we expect it to go for based on comps. Huge swarm of interest and many buyers offering a price at around what we expected. It's just a sales strategy.

> Yeah, but people are listing low to attract more eyeballs.

Any other year I'd accept that. However, that's unlikely to be true this year - in most US markets. Buyers and renters alike are bidding up properties because there is one property or less for every 100 prospects.

Here, landlords get 400 applicants the first day a rental is listed. The second day they get 400 more unique applicants. The rental we just moved into was up for less than 2 hours and received 50 applications. We won by paying 6 mos in advance + last + 1.5x security.

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

#324

Post by RHSeeger »

dragontamer wrote: post #241
missingrib wrote: post #238

Earlier quoted context omitted.

You are ignoring costs that are truly just lost and don't exist with a rental payment, like repairs and insurance and HOA, etc.

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.

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

#325

Post by sjg007 »

alach11 wrote: post #2

My wife wants to buy a house, but I'm unable to make life decisions without trying to minmax them. I wasn't satisfied with existing rent vs. buy calculators, so I decided to build my own! I'm not a developer, so I apologize if it's a little rough looking... Some things it takes into account: - The actual rate of return on your down payment and extra costs of a house - Inflation - Itemized deductions on your taxes - T…

If your wife wants to buy a house… buy the house.

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

#326

Post by Johnny555 »

WarOnPrivacy wrote: post #320
Johnny555 wrote: post #297

Earlier quoted context omitted.

Yes, but in an area with such a hurricane risk that it led to an increase so great that it more than doubled someone's home mortgage, it would have had to have had a large impact on landlord's structure insurance, raising rents. For someone with a $1000/month house payment, that's $24,000/year in extra premiums. If that's a $200,000 house, in 10 years the extra premium would cover the house... I don't see how landlor…

> Yes, but in an area with such a hurricane risk that it led to an increase so great that it more than doubled someone's home mortgage, I believe you assume that the increase was tied to our increased risk. It would be more accurate to say that it was tied to risk of other places, hundreds of miles away. In my post, I had stated that we were at less risk than major mid-Atlantic cities.

No, I'm trying to figure out how residential properties had such a huge increase in insurance rates (whatever the cause), while landlords were spared the increase.

I can understand that a huge insurance rate increase would make your house much more expensive than you thought it would be, I'm just trying to understand how such a rate increase only applied to residential houses, but not rental properties (many of which are just residential houses).

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

#327

Post by kelnos »

TravHatesMe wrote: post #276
supernovae wrote: post #200

Earlier quoted context omitted.

I bought my house for 225k, our neighborhood is selling for 650k now. My mortgage is much more affordable than the rents that have gone up over the years to more closely reflect the 650k pricing. But damn the taxes are gonna hurt everyone here... renter or owner (as the renter you're just covering them for the owner)

Taxes are a function of municipal costs and the value of all properties. If they all go up equally in value and costs remain constant then your taxes should not increase

In practice, though, that's not the case. In many jurisdictions you get yearly reassessments as to your home's value, and your taxes change to match that value. I don't think I've heard of a place where they decide to lower your taxes (or keep them the same) when your home value is reassessed higher, regardless of what's happening with municipal costs.

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

#328

Post by tuananh »

MeinBlutIstBlau wrote: post #229
chiefalchemist wrote: post #183

Earlier quoted context omitted.

Regardless of age, needs and priorities change. There's no joy in moving, but it's still better than the time suck of hiring a contractor, electrician, and/or plumber. AND having to pay them. Owning is nice. But it's more limited and more time consuming. There's a cost associated with that.

I dont like the process of moving, but the cleanup, and starting again is a wonderful relief from a previous burden.

i guess you love total code rewrite too :D

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

#329

Post by refurb »

JMTQp8lwXL wrote: post #254
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…

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…

Nothing says you have to buy a house and settle long term in the Bay Area.

I’ve know people who get a rent controlled place, work 10 years, sock away $1M+ in savings, then go somewhere cheaper with good schools to have a family.

Being able to put away $1M+ in savings by the time your in your early 30’s is huge.

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

#330

Post by lumost »

JMTQp8lwXL wrote: post #254
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…

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.

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