this post was submitted on 29 Oct 2024
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380k with a 30 year mortgage and something like $25k down. Amortization on 5.89% will show at the end of it, you'll pay over 774k for it. Mortgage payment would be $2150. That's after closing costs. Property insurance and property taxes about $700/mo. And I live in a high property tax area.
Utilities aren't included, but I haven't seen many rentals that include utilities either. The house may be bigger and use more utilities though.
The lowest rent in my area for 3 bedrooms is 2.2k/mo and that's an outlier. Most are $2,700+/mo. If I were to pay the $2.7k for 30 years, that's just shy of $1 million. And at $2200, it's just shy of $800k in 30 years. That's break even.
This isn't even addressing the instability of rental prices. My mortgage payment is locked in, at a fixed interest rate. If I were to rent, there is no guarantee that the rent i am paying today is the rent I'll be paying in 5 years.
Renters should be getting renters insurance too, so add that to the renters side.
Yea, I will have home repairs I'll need to pay for. But I'll also have equity that I can leverage for them if I need to. I'd have to put in $200k in the course of 30 years to match what a renter in my area would be spending. And that's just repairs, if I were to spend on renovations and/or additions than it would raise the property value.
As for capital gains, that's only when I sell, but if I have to pay taxes because I made money. Well, then I made money instead of... Only spent money?
If the house doesn't appreciate and only holds it's value, it's an asset that protects against inflation.
yeah, that checks out
if literally everything goes beyond right with your home purchase, you beat the market price by 100k, low property taxes, no emergency costs, you don't have any repairs, vs. you choose to rent near the center of the city and everything goes wrong with renting, then a home purchase can begin to match the convenience and more economical choice of renting.
overall and on equal footing, it's cheaper to rent plus you don't have to pay any of the necessary maintenance costs, utilities depending on the property or any taxes.
and renting is way less time and trouble.