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I just bought a house and it will cost half as much to own vs rent same house

By PockyClipsNow follow PockyClipsNow   2012 Oct 12, 8:54am 103,986 views   478 comments   watch   nsfw   quote   share    

I hope this is a real world math lesson for some of the 'should I buy now' crowd. Its a tough decision.

Price: 875k
$ Financed: 700k

Loan: 5/1 Interest Only ARM at 2.875 with .25 points (union bank)
Payment: 1677
Prop tax: 912
total: 2588
(im in 28% effective tax bracket so 2588 * .72 = 1863 'after tax write off payment')
Add fire ins of 129 per month and total pmt after tax write off = $1992

This is a custom built, recently remodeled huge estate home on acreage and zoned for horses - would rent for 3800 to 4200 based on craigslist comps.

If I change jobs I can make 1k per month easy in profit when renting it out. Its not a great rental though, but an awsome to live in property.

I sold four homes off in 05/06 and the plan was wait for 50% drop then buy back in. Well prices only came down to 70% of peak fraud prices - close enough with the low intrest rates (which I am betting are permanent, as in the rest of your life. If rates spike in 5 years I will simply pay off the loan, refi, or get a loan mod - no worries here.)

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