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

61–70 of 256 posts

Re: Is It Better to Rent or Buy?

#61

Post by up_and_up »

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…

> but renters must submit to arbitrary changes, allow men to enter their homes uninvited

Before buying our home, my wife and I rented and had a horrible time with our property manager.

The climax was coming home on a chilly friday night in November with NO WINDOWS in our bedroom and nice little note stating: "Be back on Monday".

The painters were supposed to paint the trim and windows and decided take them out to paint them but not to replace them for the entire weekend.

> Buying allows you to control your property

Amen

Re: Is It Better to Rent or Buy?

#62

Post by mahyarm »

hkmurakami wrote: post #28
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…

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…

Wow, the marginal tax rate pretty much cut the rental limit in half, the difference is that big.

Re: Is It Better to Rent or Buy?

#63

Post by stormbrew »

gibybo wrote: post #50
tolmasky wrote: post #37

Earlier 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.

It's pretty rare that the penalty for breaking a lease is that you have to pay the entire remaining term of the lease. Usually you only have to pay until a new tenant can be found, and you can speed that up if you can find them a new tenant yourself. Quite often they're really happy to be rid of you, even if they won't say so, because if the market is up they can probably charge more for a new tenant than they can raise your rent (due to bylaw limits on rent raises).

I don't think I've ever been aware of a situation where the cost of breaking a lease was actually, in practice, more significant than the costs in time and money associated with selling real estate. Obviously if your property has gained in value in the meantime you may still come out ahead when it's all done, but on the flipside you may also lose a lot of money.

The costs of breaking a lease are much more predictable.

Re: Is It Better to Rent or Buy?

#64

Post by TillE »

sliverstorm wrote: post #51
al_gore wrote: post #5

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.

If one of your major criteria is a walkable city (ie, no car required) within the US, that list is very short and very expensive.

Leaving the country broadens your options considerably, but that also adds its own complications.

Re: Is It Better to Rent or Buy?

#65

Post by arjunnarayan »

mbostock wrote: post #60
arjunnarayan wrote: post #55

Earlier quoted context omitted.

Do you have a link to Felix Salmon pointing out that this demonstrates Modigliani-Miller? Edit: Thanks!

https://twitter.com/felixsalmon/status/469311904582627329

But it looks like Down Payment doesn't affect the result conditioned on holding the Mortgage Rate constant. I'm not so sure that's a good assumption. I imagine the down payment strongly affects the mortgage rate you'd get.

Re: Is It Better to Rent or Buy?

#66

Post by Frozenlock »

seanmcdirmid wrote: post #31
Frozenlock wrote: post #20

Earlier quoted context omitted.

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?

There are countries that lack property taxes, but they tend to be communist (china) and you are only buying a 99 year lease. Also, the lack of property taxes doesn't work very well, as it encourages speculation and then sitting on then property doing much with it waiting for values to rise. Property taxes enforces mandatory deprecation (you have to make it productive enough to at least pay the tax) and also funds thi…

I didn't say anything about the good or bad of taxes, just asking why people are using a word when it shouldn't be.

Historical reasons? Delusions? Sales tactics?

Re: Is It Better to Rent or Buy?

#68

Post by anywherenotes »

marknutter wrote: post #9

If you buy, you can do whatever the heck you want to with the house or your yard. That's true freedom and to some people - myself included - worth every penny.

I have a house on a corner. Can't put up a fence because it would block drivers from seeing around the corner.

At least that's what contractor told me when I tried getting an estimate.

Re: Is It Better to Rent or Buy?

#69

Post by b_emery »

snarfy wrote: post #52

When 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.

> When interest rates are low, prices are high, and when rates are high, prices are low.

The data says otherwise: "“There’s no strong correlation between interest rates and home prices,” ... The bottom line is other factors (like a stronger economy) have a bigger impact on house prices than changes in mortgage rates." [1]

[1] http://www.calculatedriskblog.com/2013/06/house-prices-and-m...

Re: Is It Better to Rent or Buy?

#70

Post by gutnor »

snarfy wrote: post #52

When 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.

Well it depends how good the rental rate is or how much good your investments are or how different is the increase in rental rate vs house value ...

That's where the calculator is useful.

Post reply on HN