Earlier quoted context omitted.
$200k+ yearly salary is in no way at all, middle-class.
Do you mean to say they are > or < than middle-class?
It's 4x the median per capita income in San Fransisco, and double the median household.
Show HN: Should I Get a House? a better rent vs. buy calculator
411–420 of 424 posts
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#412Earlier quoted context omitted.
Honestly, I think both of you have much better insight into the "rent or buy" tradeoffs than any calculator can provide. Personally, I only think renting is "worth it" if you can't afford the house you want, or you just don't like homeownership. I also think owning is only "worth it" if you like the freedom to do whatever you want to your property or plan to stay put for a long time. No calculator can decide that for…
Regarding the point about "freedom to do whatever you want to your property" - how does that fit with the rules that condo boards, home owner associations, and other relevant groups place on owners in their "jurisdiction". I agree with you on your points, I have this rent-vs-buy mental agonising every few months. I'm just curious what folks are doing - if freedom is the key value, then basically you buy land somewher…
You need to weigh that when choosing where to buy. I walked away from a plot of land that came with a stupid HOA. The immediate neighbor wasn't part of the HOA and didn't have to follow the stupid rules.
(No plots within the HOA land had sold at the time.)
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#413Earlier quoted context omitted.
> Owning is nice. But it's more limited and more time consuming. There's a cost associated with that. I'm living in SEA.the cost of owning a house isn't a lot where i live. so I'm surprised to keep hearing this from those living in US. can you elaborate a bit more what kind of cost do have when owning a house?
Mow the lawn, water the lawn, tend the flower bed, paint the house (or replace the siding), replace the shingles on the roof after the hailstorm, fix the A/C, replace the refrigerator, etc. Some of the those are more frequent that others, of course, but things break over time. Other costs of ownership are property tax (generally about 1% of the property value per year), gas/water/electricity are more expensive than r…
house in Asia is rather small so no lawn :D you gotta be quite rich to have lawn.
we use concrete to build houses here so fixing roof is not needed.
AC and refrigerator rarely broke down.
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#414My 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…
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Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#415Based on checking a 500k house with a 50k down payment, this tells me PMI will be about 2k/year for the first 3 years. Is it really that cheap? Is there any reason to not go for a <20% down payment if it allows me to accelerate my house planning by several years, if it only ends up costing around 6k extra?
Yeah, my home was ~$320k, ~10% down, my PMI is $140/mo. The mortgage is written so if the house appraises higher that speeds up the point where PMI is taken off. Personally I think some people overly freak out about PMI. When you're talking the size of numbers involved in the mortgage and escrow accounts, $140/mo for a few years really isn't that crazy especially if it means you can get into the market sooner in a ho…
Great point. In a way, the PMI becomes like an added aspect to the investment side of buying a house, in that you can either pay more money up front (the PMI, I mean) but get a better return on investment by having gotten in the market earlier. Whereas if you wait to save up for a down payment, the rising house prices may outpace your savings.
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#416Earlier quoted context omitted.
> 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…
I can sympathize with that. Buying a house was the right move for me but my wallet screams sometimes.
(I feel the same way about having kids.)
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#417Ignores opportunity cost of having invested cashflow difference in assets of comparable risk
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#418Earlier quoted context omitted.
> $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.
Try again: 15-Year mortgage 2.375% interest. Aka: current market conditions. With interest rates so low, your monthly payments are minuscule right now and make the 15-Year a good option. Any homeowner with good credit scores can right now switch off their current mortgage into a 15-Y 2.375% ish loan.
Most of the homeowners I know have 30 year mortgages. As such, my comment that your numbers don't seem normal is fairly accurate given the people I know. Is it a lot more common to take a 15 yr loan among your friends / in your area?
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#419Earlier quoted context omitted.
Try again: 15-Year mortgage 2.375% interest. Aka: current market conditions. With interest rates so low, your monthly payments are minuscule right now and make the 15-Year a good option. Any homeowner with good credit scores can right now switch off their current mortgage into a 15-Y 2.375% ish loan.
I bought a house three years ago. It burned down one year ago. I am buying another house this month that is 40% more expensive, and will be paying less on a monthly basis. This is due to (1) rolling over money invested into the first house, and (2) stupidly low interest rates. If you can realistically afford a house, I don't see how renting could ever make sense, at least not when the prices are close. Basically, con…
You're simplifying it, though.
- It's generally nowhere near 50% (of the cost of owning) going to principal
- Buying ties you into the house, or at least ties other costs to moving. If you're likely to need to move again in under 5 years, that cost is high.
- Related to the cost of moving, but... if you're moving to a new area and want to take some time to pick out where you're going to live for 20 years, then renting for a few makes sense.
Honestly, there's just a lot of reasons that can make it financially reasonable to rent instead of own.
Re: Show HN: Should I Get a House? a better rent vs. buy calculator
#420Earlier quoted context omitted.
Buying doesn’t make sense if 1. You can’t afford to own a home near your work 2. There’s a chance you will not stay in your current job for more than a few years 3. You don’t like DIY or home maintenance 4. You’re single and want to live near other single people
How does 4 makes sense? Property can be an apartment too in downtown, in case you pictured buying a house in the suburbs.
None of the points make sense really. They are more about their own priorities rather than good advice. 4 is just especially weird.