I found a great tool for calculating whether it would be cheaper to rent or buy, based on your rent, how much you were planning on putting down as a down payment, taxes, insurance, appreciation, inflation and rise in rent. try HGTV's caluclator here
Using my current rent, and assuming I would want to buy a $300,000 unit at conservative taxes and interest rates it would cost me $20,000 less to buy over the next 30 years. But...
-That's $667 a year, or $55ish a month. $55 a month is worth it for not having to sell something if I decide I want to pick up an move next month or at the end of my lease. I'm willing to pay for the flexibility. Especially since I won't want to live where I am for 30 more years.
-I estimated 0% rise in rent because rent hasn't gone up on one bedroom apartments in my building in years. Plus, my landlord doesn't tend to raise rent until a new tenant moves in. At some point in 30 years, I'm sure it will go up.
-A $300,000 condo (or single-family home in the suburbs) would be significantly bigger than my 620 square foot apartment. And nicer....
-But it only takes a few major repairs to negate that $20k. And I have to do them myself, I can't call my building engineer Javier to come take care of them for me.
Eventually, for me, that extra space and sense of permanence will be worth it. But to say that buying is unequivocally better just doesn't make sense for me right now.
1 Comment
Lucid Realty said:
Yeah, buying is not the slam dunk that realtors want you to believe. The primary benefit of owning is that it protects you from inflation in the LONG RUN. That's typically about 7 years or more. The other benefit is that people don't like the greater uncertainty of renting - neighbors, landlord sells/converts.
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