The math didn’t used to be challenging. Its challenging because our society is poorer. In addition, demographic market forces and regulation have pushed prices through the roof. Its not a good sign and the NYT simply portraying it as a “choice” is disingenuous.
Yeah, it’s always better to give your money to someone else, than to build equity. /s
It is only changing if you view your house, first and foremost, as an investment.
If you view your house as a home, then renting isn’t even close to ownership.
Put forth as smart, savvy buying during the bust, yet the picture of the living room shows only a piano for little Jimmy. The Lab lying on the floor likely exhausted from starvation.
They are selling because they couldn’t afford it in the first place, can’t afford the taxes, and they are “close” to a sale netting them a 67% profit. My a$$.
Come see me when the deal is ‘done’ and they’ve paid all those transfer taxes from Obamacare (yes, it’s there), title change fees, seller costs, capital gains taxes, realtor fees, etc. and then tell me 67% profit.
Why would anyone want to be a renter in a free world? You can’t choose who your neighbors are, don’t control your financial situation for more than a year or two, and you can’t even take advantage of whatever tax breaks there are for homeowners any more.
This is just a NYT “it’s all good” article for Obama.
re: hey are close to a deal to sell their house – for $1.35 million, a cool 67 percent gain.
How much of that gain will they have to fork over in taxes when the IRS demands its cut?
For some people renting makes much more sense.
For some people buying makes much more sense.
I bought a house here in So-Cal 2 years ago. Best decision I ever made. I will never rent again. And to me it’s not about what the value of the property is, it’s about the value of the HOME for my family.
I can’t possibly see how renting would be a better solution especially in the very long run. Let’s say you buy a home at 30 years old and have to pay 2200 a month for 30 years plus property taxes and insurance at 4700 a year.
At the end of 30 years, you own a home and even if you have to pay 8000 a year for the property taxes and insurance, you are still better off....of course you still have maintenance, but I still think that the saving of close to 24000 dollars a year for the mortgage saves in the end even with maintenance costs. The highest maintenance cost for a house is the roof every 30 years for 20 grand.
They could buy that same house in Texas with cash and have $300,000 left over.
when people like this start treating their houses as investments to be sold at top dollar - RUN
Don’t be that sucker $1.35 million buyer
renting is more expensive over the long term:
example:
300k purchase with a 220k 15 year mortgage @ 3.4% interest (1520 monthly) PLUS a 3600 yearly tax bill. Compared to a 2200 monthly rent over the same period of time. Tax savings not considered in my calculations. I am using market rates for renting the same house that is being purchased. (2400 square feet in the western suburbs of St. Louis)
assume a 5% increase in rent or real estate taxes
Purchase total cash flow = 351k
rental cash flow = 569k
assume a 2.5% increase in rent or real estate taxes
Purchase total cash flow = 338k
rental cash flow = 473k