Is my thinking off here? (renting vs owning situation)

[DesertCat]

Fortune magazine just ran a very well researched article that claims rental costs are so out of whack with housing prices they expect housing price declines of 10-20% the next five years.

Either way, 5% interest on $300k is $15k per year, making effective ownership costs about $3000 per month. With property taxes and maintenance its probably higher even with tax deductions, which you may only use partially due to AMT.

[Ray Zee]

i dont look at the rent versus buy from a money side of things, as i believe it is a life decision.

but also we must add to the renters costs the increases in rent over time, and the costs and aggravation of moving as houses sell and landlords evict for a varitey of reasons.

[Henry17]

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i dont look at the rent versus buy from a money side of things, as i believe it is a life decision.

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While I agree with this I in theory the money side isn't completely irrelevant. Within a certain range I think it is ok to just do what you'd prefer even if it is not maximizing the financial outcome. When you get to the point where one choice or the other is vastly superior though then I think the money side should overrules what you want to do.

[Jimbo]

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Jimbo,

You ignore property taxes and maintenance costs here. Also, the house isn't valued at $1million.

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Property taxes are fully deductible, so if you wish add 35% of their total to my calculations (in case you never heard of it before you should have renters insurance as well, it beomes a wash, just in case this was your next objection). Since the home is not worth a million dollars the property taxes are negligible. Maintenance on a home worth less than a million may or may not be substantail but will still be less than the $50K you are willing to toss out the window if need be. Give us all a break if you want a useful answer and tell the truth. I suspect I struck a nerve when I suggested you wanted to be backed in a business by someone else, there is no shame in that. Or if the other poster was correct and the "owner" is broke and jobless then they have no reason to be renting a $2000 per month home, they should apply for food stamps and live in a cheap apartment. Just one more odd thing about your story, how do you have $300K equity in a home that is worth less than a million and have any good reason at all to leave it? I did some quick math and came up with a $350,000 home for a $1700 monthly interest payment. Have you just made this whole thing up as a joke?

Jimbo

[BigPoppa]

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Since the home is not worth a million dollars the property taxes are negligible.

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I don't think that word means what you think it means.

[Jimbo]

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Since the home is not worth a million dollars the property taxes are negligible.

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I don't think that word means what you think it means.

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So small as to be ignored, yeah I know what it means. Unless you meant the word "that".

Perhaps you might read the whole thread, OP said he/they would be willing to accept $50K less than the fair market value equity to sell the home then become renters paying $300 more per month. If property taxes aren't negligible compared to that you need to use the dictionary.


Jimbo