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My math works out differently because I would rent out the spare bedrooms for rental income, thereby defraying my ownership expenses. What does a room rent for in Hartford? Top of my head I'd guess $400 or do.
I saw one article several months ago claiming that owning is currently cheaper than renting in 48 of the top 50 markets, but the link below says it's only 37.
Oh lookie, here's a cite:
According to real estate web site Trulia, buying was cheaper than renting in 74% of the country's 50 largest cities in July. In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper. In the remaining 14% of cities, renting was less expensive but close to the cost of buying.
Where do you live, the relationship between cost to rent could be vastly different than hartford.
In hartford to get a rentable spare bedroom would increase the cost 100K. So you would be looking at at least 600 more per month. I don't think the extra rental income would cover that.
I think you could buy a 2 bedroom for 300K and rent out a floor for about 1100. If this was Hartford / West Hartford you might make out better than 1000$ per month. In this example your monthly expenses are 1750 + 500 or about 2250 in payments.
Rent would cut that to about 1150. You still are paying more than 1000 in rent.
Also realize that you could find rent cheaper like 800 or just live with roomates and it would cost you maybe 400$ per month.
Seriously you can't beat renting just live with a roomate and you could only pay 400.
Stop fooling yourself renting is much cheaper people want to believe owning a home is cheaper because deep down they want to own a home. That sounds like your case.
People who live in and/or have the NYC to Boston metro as their life experience should not be allowed to even address this question... let alone to preach or rail on it
Quote:
...people want to believe owning a home is cheaper because deep down they want to own a home. That sounds like your case.
Which is a whole other (and quite valid) set of concerns from the financial aspect.
And not that I would EVER be one to support or defend Free's view on just about anything...
his post did acknowledge that YOU live in one of the anomalous areas. To wit: In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper.
Not at all. I just believe we reap what we can harvest.once it goes beyond having basic food and shelter any financial rewards go to those who can afford it or earned it.
There is no right to anything in life . In the old days if you were a poor provider you starved to death.
Things are not that harsh today but without the money to buy things and do things basically your screwed.
People who live in and/or have the NYC to Boston metro as their life experience should not be allowed to even address this question... let alone to preach or rail on it
Which is a whole other (and quite valid) set of concerns from the financial aspect.
And not that I would EVER be one to support or defend Free's view on just about anything...
his post did acknowledge that YOU live in one of the anomalous areas. To wit: In just 12% of the cities, including New York, Seattle and San Francisco, renting was cheaper.
There is much more to the equation then just the rent or expenses of buying.
The real deal is if you didnt buy what else did you invest the money in that would have been spent on the house.
Its rare in any area that from day 1 buying and all its costs ,downpayment, and closing costs are going to be cheaper out of the gate.
I have mentioned many times my own experience's.
My house in 1987 was 169k. We sold it in 2004 for 335k. That same 169k in my mix of funds was worth 1.8 million.
I could have subtracted out all the rent i would have paid for decades and had enough today to buy 2 homes.
There is alot that has to go into these rent or buy calculations.
How about the fact a couple who rents and does not meet their standard deduction actually flys the empty seats and gets money back.
They may get a couple grand back they can apply towards rent .
There is a good chance the homeowner actually spent that money eating up that standard deduction and actually spent the full deduction on mortgage interest and real estate taxes.
If the renter only ate up 4 or 5k of the standard deduction they get money back and have more money in their piggy bank.
The homeowner may have actually spent over and above the cost of the house all of that deduction and has less money in their piggy bank.
The homeowner has to insure an entire structure. The renter does not.
Each situation has to be looked at from many different angles and is a whole lot more complicated then just mortgage and real estate taxes vs rent.
Whether you are paying cash, taking a mortgage, the length of time there is a difference until buying is cheaper then renting all will have a different amount available to be invested elsewhere.
As a homeowner off and on for decades i can tell you there are a whole lot of other expenses like repairs ,renovations ,maintaince and just general spending on things we do as homeowners that renters do not.
That makes each situation unique to each one of us.
Last edited by mathjak107; 12-09-2012 at 06:39 PM..
Then why does goverment reject my idea of boosting homne ownership for working class people who need it most, by reducing regulation annd allowing the private sector to sell affordable homes to burger flippers? Liberals pushed the goverment to prod lenders into finance McMansions people couldn't afford, and conservatives blasted the misguided government intervention.
My plan reduces government intervention, maximizes economnic liberty, and increases homeownership, thereby increasing wealth, stability, and retirement security for the people who currently have it least. What better way to promote work and reduce dependency on the government?
We have that now... most commonly it is called trailer parks... some you own the space and others you rent.
Also... cities across the country from SF to New York are experimenting with micro units... under 400 square feet with some about 200.
Washington State has a test program to build micro homes and they had a detailed report on the news last night...
I to could be in your area housing is can be so inexpensive... like in the Detroit area... there is little incentive to make changes.
The real deal is if you didn't buy what else did you invest the money in
that would have been spent on the house.
Perhaps for some, but for the far larger group "the real deal" as you phrase it...
investment simply doesn't enter the picture at all. The buy vs rent choice is quite simplistic:
as they can only spend that $500 or $5000 each month once it's either in rent or a mortgage.
If they don't buy, steadily acquiring their modest equity over a couple of decades,
they won't acquire anything else to their credit either aside from a box full of rent receipts.
Quote:
Originally Posted by GeorgeBailey
Just remember this, Mr. Potter, that this rabble you're talking about... they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn't think so. People were human beings to him. But to you, a warped, frustrated old man, they're cattle. Well in my book, my father died a much richer man than you'll ever be!
Perhaps for some, but for the far larger group "the real deal" as you phrase it...
investment simply doesn't enter the picture at all. The buy vs rent choice is quite simplistic:
as they can only spend that $500 or $5000 each month once it's either in rent or a mortgage.
If they don't buy, steadily acquiring their modest equity over a couple of decades,
they won't acquire anything else to their credit either aside from a box full of rent receipts.
In Hartford renting is cheaper, so is boston, new york, north carolina, maryland, dc, new jersey, Delaware.
You don't seem to have any numbers to back up your arguments. Not very rational...
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