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If you own a home in San Mateo since 1995, you are a multimillionaire and owns a shitload of stocks too.I love when house-humpers say stuff like, "Well, if you bought your house in 1995, before the biggest bubble of all time, you'd be a multi-millionaire with tons of stocks."
Jeez, it's just math and easily proven.
If you own a home in San Mateo since 1995, you are a multimillionaire and owns a shitload of stocks too.
Jeez, it's just math and easily proven. Try the NY Times rent-vs-buy calculator:
You assume no emotional investment in being right about a HUUUGGGE debt. Once they sign those papers they pretty much have to believe they made the right decision, screw the math.
Everyone with a massive mortgage believes that they did the right thing with a religious devotion that would shock hardened ISIS fighters.
Not everyone. I, for one, have no fucking devotion (religious or otherwise) to my massive mortgage.
Patrick saysEveryone with a massive mortgage believes that they did the right thing with a religious devotion that would shock hardened ISIS fighters.
Not everyone. I, for one, have no fucking devotion (religious or otherwise) to my massive mortgage.
The scratch on the wall, the clock, the table they spend years having dinner together.
Do remember also, that you have to consider opportunity costs/benefits of the investment.
That’s comparable to stock or bond returns over the same period in a tax-deferred 401(k).
The scratch on the wall, the clock, the table they spend years having dinner together.
SFace saysIf you own a home in San Mateo since 1995, you are a multimillionaire and owns a shitload of stocks too.I love when house-humpers say stuff like, "Well, if you bought your house in 1995, before the biggest bubble of all time, you'd be a multi-millionaire with tons of stocks."
Get me a time machine, and I'll happily go buy a whole block. But until one gets invented, why should any normal person buy a house right now when renting that same house is a fraction of the monthly cost? That's when speculation is in full swing.
Even 4% appreciation rates would make buying a better option, simply because interest rates are 4%.
What about property taxes, maintenance, insurance, and the fact that the stock market went up 32% in 2017?
What about property taxes, maintenance, insurance,
and the fact that the stock market went up 32% in 2017?
You're paying that already as a renter, but don't get and benefit of the tax deduction.
factor in double digit appreciation rates that are common during boom times, and you will see buying rather than renting is a no brainer.I agree, but how do you know that's going to happen? If renting is cheaper than owning right now in many parts of CA, wouldn't that signify that double-digit gains are unlikely to happen and future prices may be flat or drop?
Strategist saysfactor in double digit appreciation rates that are common during boom times, and you will see buying rather than renting is a no brainer.I agree, but how do you know that's going to happen? If renting is cheaper than owning right now in many parts of CA, wouldn't that signify that double-digit gains are unlikely to happen and future prices may be flat or drop?
Sniper saysYou're paying that already as a renter, but don't get and benefit of the tax deduction.
Maybe he's paying for it, maybe not.
For most "retail" houses on the market, you cannot actually rent it out and cover all monthly expenses.
Landlords don't become landlords because they like to lose money every month on their tenants.
Exactly. For safety, you want to buy only if the price is low enough that you can rent it out and cover all monthly expenses.
Landlords don't become landlords because they like to lose money every month on their tenants.
Jeez, it's just math and easily proven. Try the NY Times rent-vs-buy calculator:
https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html
The problem with this calculator is it's wrong in Orange County, Ca. Rents are considerably higher then the scale. Not a good time to rent or buy.
Sniper saysLandlords don't become landlords because they like to lose money every month on their tenants.
You're right about that, and in most of the country landlords can buy places that will be cash-flow positive.
But not in the Bay Area. Around here, landlords cannot buy rental property and be cash-flow positive
I think you are 100% correct, except that I'd argue that you shouldn't only look at today when analyzing the rent/buy decision. If you are reasonably stable and expect to stay in the same place for many years (kids in school, love the area, etc.) then you should take a reasonable timeframe into account.I don't think most people buy with an idea of leaving in 2 years. Life happens and things out of your control can force one to sell and move. If any of us had bought in 2005/2006 with the idea of long term in mind, we'd be barely breaking even right now, 12 years later.
What goes on in the Bay Area regarding rents not covering the monthly nut of the landlord is a outlier in comparison to the rest of the country.
I don't think most people buy with an idea of leaving in 2 years. Life happens and things out of your control can force one to sell and move. If any of us had bought in 2005/2006 with the idea of long term in mind, we'd be barely breaking even right now, 12 years later.
PrivilegedtobeWhite saysAnd if you run the numbers now, no one should buy. Oh wait, it's different this time ;)I don't think most people buy with an idea of leaving in 2 years. Life happens and things out of your control can force one to sell and move. If any of us had bought in 2005/2006 with the idea of long term in mind, we'd be barely breaking even right now, 12 years later.
Yep--unexpected things happen. But if you ran the numbers in 2005/2006 you never would have bought in the first place,
And if you run the numbers now, no one should buy.
PrivilegedtobeWhite saysTrue. I was generalizingAnd if you run the numbers now, no one should buy.
Might be OK in a lot of places away from the tech money.
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