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Thread: Question for homeownercels
10-19-2021, 06:05 PM
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#1
- gainztrain818
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- gainztrain818
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Question for homeownercels
A 500k 2bed/2bath condo/house/townhouse will cost me approximately $2500/mo all in a month to service.
I can rent a similar place for about $2000 total.
Why would I tie up 100k in a down payment (to avoid PMI) when I can continue to invest $2000+ a month personal savings in the markets (and more as time passes) in perpetuity?
Wouldn’t I come out leaps and bounds above a homeownercel over the long term assuming a 7% rate of return?
What am I missing here? Unless I am looking to become a real estate investor, what’s the point of owning? Srs no troll
I can rent a similar place for about $2000 total.
Why would I tie up 100k in a down payment (to avoid PMI) when I can continue to invest $2000+ a month personal savings in the markets (and more as time passes) in perpetuity?
Wouldn’t I come out leaps and bounds above a homeownercel over the long term assuming a 7% rate of return?
What am I missing here? Unless I am looking to become a real estate investor, what’s the point of owning? Srs no troll
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10-19-2021, 06:07 PM
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#2
- Nonsense916
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- Nonsense916
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Stopped reading at condo
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10-19-2021, 06:11 PM
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#3
- gainztrain818
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- gainztrain818
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Originally Posted By Nonsense916⏩
Condo, house, etcStopped reading at condo
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10-19-2021, 06:14 PM
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#4
- headturner1
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- headturner1
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Condos are kinda fuked man, I’d at least try to have more of a townhouse where you’re not sharing walls/roof/etc
10-19-2021, 06:18 PM
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#5
- SipNPiz
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- SipNPiz
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condos are trash, anything with an HOA really...
must be a chitty area if rent is less than a mortgage, round here a 3 bed home rents for more than mortgage would be...
must be a chitty area if rent is less than a mortgage, round here a 3 bed home rents for more than mortgage would be...
STEM Wagie Brah
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10-19-2021, 06:19 PM
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#6
10-19-2021, 06:19 PM
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#7
Time for OP to delete this thread.
Negged btw.
Negged btw.
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10-19-2021, 06:20 PM
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#8
- headturner1
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Originally Posted By AWSbruh⏩
Jfl, I was mirin for a minute. Then I reread and saw divorce, nm (not mirin).How about this. I just closed on a new construction house in February for 450K had to sell it in August due to my divorce and I got 650k cash offer. How’s that return for you?
10-19-2021, 06:20 PM
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#9
- BigBallsMcgee
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- BigBallsMcgee
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I bought my house to live in not for some mega return(though that would be nice)
10-19-2021, 06:21 PM
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#10
- Paul Kreul
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- Paul Kreul
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You will never regain all the money you are out in paying your rent...that’s why
Aside from it not being your own, living under someone else’s rules, & always losing money.
Aside from it not being your own, living under someone else’s rules, & always losing money.
10-19-2021, 06:23 PM
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#11
10-19-2021, 06:24 PM
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#12
- MyGhettoFantasy
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- MyGhettoFantasy
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Bought for $535k in 2019.
Currently could sell for upper $700s.
Currently could sell for upper $700s.
The closer we approach the uncertainty of life's ending the more we wish to trade all of the things we have acquired in exchange for all of the things we have lost: wealth for youth, knowledge for fresh curiosity, resignation for hope. We'd trade our wisdom for new experiences, but it is wisdom that will teach us that at the end of the road the only new experience is death.
10-19-2021, 06:26 PM
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#13
- Nonsense916
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- Nonsense916
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Originally Posted By LargePeter⏩
It’s kinda weird seeing aussies call anyone cucks nowLMFAO at paying some other kunt to have shelter and somewhere to fuk your boyfriend
The ultimate definition of being a cuck
The ultimate definition of being a cuck
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10-19-2021, 06:29 PM
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#14
- headturner1
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- headturner1
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Originally Posted By AWSbruh⏩
Am mirin that, good on yah bro. Not mirin marriage, but you know how we miscers do.Still profit like 98K on my end in 6 months.
10-19-2021, 06:53 PM
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#15
- gainztrain818
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- gainztrain818
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Originally Posted By SipNPiz⏩
Is that all there is to it then? A lower monthly payment with a mortgage plus any appreciation as an added bonus?condos are trash, anything with an HOA really...
must be a chitty area if rent is less than a mortgage, round here a 3 bed home rents for more than mortgage would be...
must be a chitty area if rent is less than a mortgage, round here a 3 bed home rents for more than mortgage would be...
Anyone know the tax benefits of owning vs renting?
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10-19-2021, 06:58 PM
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#16
There's something neat called the 5% rule OP.
Basically, if you take a house cost, so let's say $500k house, and do the 5% rule (multiply $500k by 0.05), you'd find that the unrecoverable costs per year are $25k/yr. Due to maintenance, taxes, and keeping money tied up in a house versus potential profits from stock market, while also considering the fact that the house should go up in value over time as well.
$25k/12 = $2083/mo. So if you are able to rent something for cheaper than $2083 in a given area / living situation, you'll have less unrecoverable costs compared to a $500k house.
It's not an exact formula, there's other things too like closing costs on a house (there's a 2% rule to calculate that as well) and such. But it's at least a roughly accurate and easy to calculate way to think about things.
So in general, if the only houses in a given area that you're interested in are around $500k, if rent in that same area for similar size is below $2083, then it's safer to rent.
Note that this is purely a rent/mortgage discussion. It's assumed that your bills would be similar/constant, and doesn't take into consideration valet services, pet fees, HoA, etc.
Basically, if you take a house cost, so let's say $500k house, and do the 5% rule (multiply $500k by 0.05), you'd find that the unrecoverable costs per year are $25k/yr. Due to maintenance, taxes, and keeping money tied up in a house versus potential profits from stock market, while also considering the fact that the house should go up in value over time as well.
$25k/12 = $2083/mo. So if you are able to rent something for cheaper than $2083 in a given area / living situation, you'll have less unrecoverable costs compared to a $500k house.
It's not an exact formula, there's other things too like closing costs on a house (there's a 2% rule to calculate that as well) and such. But it's at least a roughly accurate and easy to calculate way to think about things.
So in general, if the only houses in a given area that you're interested in are around $500k, if rent in that same area for similar size is below $2083, then it's safer to rent.
Note that this is purely a rent/mortgage discussion. It's assumed that your bills would be similar/constant, and doesn't take into consideration valet services, pet fees, HoA, etc.
10-19-2021, 07:01 PM
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#17
- WoofieNugget
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Originally Posted By MiscMathematician⏩
My rent is $1000 a month below what it would carry me to own the same place.idk why you would do either of those things
but rent prices should be well above mortgage prices.
but rent prices should be well above mortgage prices.
10-19-2021, 07:03 PM
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#18
- WoofieNugget
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Originally Posted By NextPound⏩
Property taxes, maintenance and if it's a condo, condo fees. Property taxes alone on a 500k place is probably about $400 a month assuming they are usually about 1% of your value.400k at 3.5% on a thirty is basically $1,800. Why in the world are you budgeting $700 a month or more than a third of your mortgage payment on added home ownership costs.
10-19-2021, 07:21 PM
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#19
- exxtracool
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- exxtracool
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"to service..."
what? wtf do you mean to service? you giving your house a bj?
do whatever works for you man... if you feel you can make a better return on your money in other markets and dont want to tie your **** up in real estate then do it. i like real estate personally and ive owned my primary residence since i was 23 years old. would never rent.
what? wtf do you mean to service? you giving your house a bj?
do whatever works for you man... if you feel you can make a better return on your money in other markets and dont want to tie your **** up in real estate then do it. i like real estate personally and ive owned my primary residence since i was 23 years old. would never rent.
10-19-2021, 07:22 PM
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#20
- gainztrain818
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- gainztrain818
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Originally Posted By Visel⏩
ReppedThere's something neat called the 5% rule OP.
Basically, if you take a house cost, so let's say $500k house, and do the 5% rule (multiply $500k by 0.05), you'd find that the unrecoverable costs per year are $25k/yr. Due to maintenance, taxes, and keeping money tied up in a house versus potential profits from stock market, while also considering the fact that the house should go up in value over time as well.
$25k/12 = $2083/mo. So if you are able to rent something for cheaper than $2083 in a given area / living situation, you'll have less unrecoverable costs compared to a $500k house.
It's not an exact formula, there's other things too like closing costs on a house (there's a 2% rule to calculate that as well) and such. But it's at least a roughly accurate and easy to calculate way to think about things.
So in general, if the only houses in a given area that you're interested in are around $500k, if rent in that same area for similar size is below $2083, then it's safer to rent.
Note that this is purely a rent/mortgage discussion. It's assumed that your bills would be similar/constant, and doesn't take into consideration valet services, pet fees, HoA, etc.
Basically, if you take a house cost, so let's say $500k house, and do the 5% rule (multiply $500k by 0.05), you'd find that the unrecoverable costs per year are $25k/yr. Due to maintenance, taxes, and keeping money tied up in a house versus potential profits from stock market, while also considering the fact that the house should go up in value over time as well.
$25k/12 = $2083/mo. So if you are able to rent something for cheaper than $2083 in a given area / living situation, you'll have less unrecoverable costs compared to a $500k house.
It's not an exact formula, there's other things too like closing costs on a house (there's a 2% rule to calculate that as well) and such. But it's at least a roughly accurate and easy to calculate way to think about things.
So in general, if the only houses in a given area that you're interested in are around $500k, if rent in that same area for similar size is below $2083, then it's safer to rent.
Note that this is purely a rent/mortgage discussion. It's assumed that your bills would be similar/constant, and doesn't take into consideration valet services, pet fees, HoA, etc.
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10-19-2021, 07:25 PM
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#21
- WoofieNugget
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Originally Posted By Anachron⏩
I rent a 2500 square foot 4 bedroom on a corner lot with a massive yard. To buy it would cost 900k currently in my city. So yes, my rent is well below that mortgage cost, not even including property taxes and maintenance. In fact, just the mortgage payment with 5% down is $1000 more, with property taxes and other costs it's probably closer to $1800 a month.Highly unlikely.
10-20-2021, 07:11 AM
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#22
- eatmycrackers
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- eatmycrackers
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Tax advantages:
Mortgage interest and property taxes are deductible so true cost in your situation could be less than renting say 1800/no while you also build equity over time.
Maybe put less % down and pay PMI but that money invested instead of down one will earn 10%+ instead of the fee that PMI ends up being it’s typically a couple points
Mortgage interest and property taxes are deductible so true cost in your situation could be less than renting say 1800/no while you also build equity over time.
Maybe put less % down and pay PMI but that money invested instead of down one will earn 10%+ instead of the fee that PMI ends up being it’s typically a couple points
Posts are for fun, not to be taken seriously or as truth.
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10-20-2021, 07:22 AM
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#23
- 78novacaine
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- 78novacaine
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Bought my first house in 2016. Sold it earlier this year to upgrade. With what I cleared from the sale after all fees/closing costs/etc I basically only paid about $20k to live there for almost 4.5 years. That's less than $400/month to live in a 3 bed/2 bath house vs about $700-800/month to live in a decent 1 bed apartment in the same general area. Yeah, I think I came out ahead on that deal...
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10-20-2021, 07:25 AM
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#24
10-20-2021, 07:33 AM
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#25
- Jms89
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- Jms89
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It's simple...with rent you are literally lighting your money on fire and watching it evaporate. On a home, it appreciates, and acts as a forced savings. You will see all the money you paid in eventually come back to you when you sell. You can also pull equity out of the house at a low interest rate and use said equity to buy rental properties. There are a ton of things you can do when you own a home...and your landlord isn't going to raise your rent on a yearly basis. Taxes do go up, but they do in a rental scenario too. When my taxes go up on my rental, i pass the burden off to the rentcel paying me. I can also write off a ton of things as a landlord as long as i still owe on the house. I have a 2.5% interest rate. I can guarantee you that you pay far more on your rent increase each year and you will never see anything come back to you from it. Your thesis about the market returns on your stocks work sometimes in a good market, but once we see a bear market, if you are a rentcel you better pepper your angus. Rents skyrocketed in 2008 because every idiot that was overleveraged on their mortgages lost their homes and were forced to rent. Real estate isn't for everyone...but if you are intelligent and not lazy/afraid of making repairs occasionally, home ownership is a much better plan long term. If renting was so smart, wouldn't all the millionaires be doing it? Instead, the vast majority of millionaires are landlords.
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10-20-2021, 07:34 AM
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#26
- sgregor249
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- sgregor249
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rent will increase over the years as the dollar deflates
mortgage payment won't increase over the years (property taxes will)
you're not guaranteed any returns when you invest, you can also lose money
after the mortgage is paid off, the payment is 0. the rent payment never stops
you can sell the house when its time to move to re-coup some of the costs. you cant when you rent
mortgage payment won't increase over the years (property taxes will)
you're not guaranteed any returns when you invest, you can also lose money
after the mortgage is paid off, the payment is 0. the rent payment never stops
you can sell the house when its time to move to re-coup some of the costs. you cant when you rent
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