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

[mindflayer]

unless your STRETeching to meet that 1700 payment witch is on a subprime mortgage and about to get reset to... say +2000 witch you cant make.. then i think your off.
The real question is WHAT IS Your CURRENT INCOME?

I may be TOTALLY OFF...but,

It sounds like you are trying to justify your sale by saying it is better to do it because it is "better for other reasons" rather than saying, I am on the edge and might become a statistic.
(an Interest only mortgage is typical of the subprime mortgage)

In any case, I do see both points of view.
because your m is interest only.. it is virtually the equivalent of renting.

left side of eq is
have 300k to invest, unknown return, pay 300 for rent.

right side of eq is
300k invested, 1% return,20k tax deduction,zero for rent(or 300 to invest)

I would say that 20k deduction weighs HEAVILY in your calculation. Virtually ANy type of decent salary will cause this side of the equation to be worth more.

Jimbo has ASSUMED that you have this type of job. 45k+/year
+45k salary = 9k tax savings = keep the house.
no salary = no 9k tax savings = Sell the house.
a 20-30k salary makes it a much closer calculation.
guessing a 3-4k tax savings...
What is your current income again?!?

[TheMetetron]

mindflayer,

This isn't an example for me. The person in question however more than makes enough to cover the mortgage. I wouldn't be advocating taking on a higher rent if they couldn't.

[BigPoppa]

Owning

Pro:
Mortgage Interest Deduction (approx $9k/year)
Lower Per Month Cost ($3600/year)
Probable Appreciation in Value


Cons:
Property Taxes (?)
Maintenance (?)
Insurance (?)
Possible Depreciation in Value
Loss of Investment Income from Equity (?)


Fill in the blanks and run the numbers, with an allowance for the cost and hassle of moving. Also remember realtor percentage of pruchase price and anything that would need to be done to the house before selling.

[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.