I live in a very high cost real estate city and I’m a rentcel

I went to go check out a 2 bd/2.5 bath newly built townhome which is $700K. If I put 20% down so $140K, the monthly payment will be about $4000

My current rent is $2100

Is it worth using $140K of my money to pay $4000+/month for the next 30 years?

rentcel

stay renting

thats 2k you could be investing

It's tough to accept because I've always wanted to own a property in this city and have somewhere I can settle but it seems that I'll have to just stay renting or eventually move away

lol look at this clown

funko pops?

this guy has no idea how much 2k monthly investments can make

what a retard

That is insane money for a townhouse. Is there no way for you to relocate to a lower COL area? What about older homes? You don't need a brand new home as a starter home.

This guy knows what’s up. It’s even more important at a young age.

Remember that's just your monthly payment, which is the trap a lot of people fall into. A 700k townhouse factor in 1% a year for property taxes, which is another $600 a month. Utilities on a townhome that size will probably be $400 a month all in. Then you want to factor in about another 1% a year for general maintenance - ie lawn, fixing things, plus putting money aside for major purchases like a roof/furnace. So that 4k payment is now $5600.

5% rule applied to this scenario means 560k mortgage = 28k divided by 12 or $2300. So cheaper to rent.

Take the 140k you have and keep it invested and contribute another even 1k a month towards an index fund and it's a smarter investment at this point. Plus, if you're young and are even thinking down the road you want a family, a 2 bedroom place wont be big enough after another 5-10 years.

Buying a house right now is the height of stupidity. Let the markets correct first, or let rents rise to the cost of buying. Or buy a 4 unit and live in one of them while renting out the rest.

The location is really good and convenient for me. Problem with older homes is that I’ll be competing with 20+ people for each of those in my city. These new developments are much easier to get into as long you pre-qualify into the list. I can only afford a townhome here.

I’m looking for a permanent home and not have to move around which is why I’m willing to pay up.

Op you have to basically completely ignore tranny misc aka anachrons crew of obsessed circular butt fukking spammers.

They have not the slightest hint of what downside, risk, or leverage is.

Rent, take the difference and invest. Before someone says you wont do this, remember that it has been a common strategy in middle and upper class areas for a while where rent lags buying. Landfaags itt have never heard of it because they are frauds and this is their first rodeo.

That’s true.. it’ll be an end unit though

And this is assuming I stay unmarried

But if I find a partner, I’ll keep it as a rental and buy a SFH with dual income

100% DO NOT get into a new build right now. First thing is that construction is at an all time low and the quality is absolute garbage. The other part is there are delays and you might not even get into the place for years if they are just building now. Plus then as soon as you move in you have to fight for them to actually fix all the stuff they didn't build properly, and 95% of the time they don't.

Only way I'd even entertain a new build is with a custom builder where you can keep an eye on things all the way through. Don't waste your money and your time just because you have FOMO. That's how a lot of people get trapped into mortgages that are idiotic but herp derp I own a house, yay.

and does op sound like "the vast majority of rentards" to you? Probably, because you lack the ability form nuanced thought. Youre a pigeon ****ting on a chessboard, an absolute simpleton.

remember that time you told someone with a spare 140k to buy in a high risk, high interest market?

did it offend your fee fees?

lmao you were just trolling right? Or were you being randomly litteral? Dont back track now!

buy a couple of places in a cheaper city/state and rent them out/airbnb

pay an agency to do it if you don't want the hassle

simples

Why would you pay 4k for 30 years? Your takehome should be doubled in 15-20ish years and by that time you should have it paid off, or would have sold it for a decent return in 10 or so years.

Own

Your rent will go up

Mortgage payment ain't..and you'll get the appreciation


Own or be a rentcel

....
Real tough decision 99% you're better off in long run as an owner.

wrong

in canada they renew your mortgage rates every 5 years thats law

OOF!

In an environment where interest rates are expected to be "higher for longer" there isn't any expected appreciation for homes in the current 5 year plan, and you're not paying down much debt over that time.

If renting and buying is similar cost, obviously buying makes more sense. And if you want to buy for a family and can't find a similar property renting, go for it. But if it's strictly a dollars and cents determination, renting in the current environment makes way more sense.

Look at this chart
https://fred.stlouisfed.org/series/MORTGAGE30US

We're currently in the first sustained upward trend in interest rates since 1981, and are currently exiting a 42 year period where interest rates consistently moved downward. The game has changed. People who owned in the last sustained rate increase period in the 1970s were happy to be renting during that time.

Now we'e either going to see a drop in interest rates in antoher 4-5 years or a devaluing of the currency further, so there will be a position where owning makes lots of sense again. But for now, it's silly to piss away money buying when you can save way more money by renting. And given that you live in Canada where a 30 year fixed mortgage isn't a thing, it's an even worse idea.

Wat the fk does it matter when rates in canada already 5 , 6 %?

My payment doesn't change. The amount going to the principle vs the interest only changes in mine

In 5 years he won't be paying 2100 in rent he'll be paying more like 2900 $ and walk away with nothing .

i dunno man wow strong edit

but its a big change paying taxes on a cheap house than the gubment says you gotta pay those taxes on a 350k house

You realize landlords own the property they rent to tenants , right ?

Therefore all the interest $ , property tax $ is simply passed to the tenant and is directly reflected in the price , right?

$2100/mo is the PITI payment for like a $250k home in a low cost of living area of the US(with taxes and insurance) in the current rate environment. That is literally a dogchit property in most of the US. If you can live in a better location for that same price by renting, it makes sense to keep doing it.

Definitely rent as long as you're saving and/or investing the difference.

That's true if Landlords are buying the property with current rates and prices, but as we both know, that isn't the case in most situations. Typically landlords have owned the homes for a long period, and bought cheap and in some locations have locked in tax rates that are far lower than rates of people buying new homes.

So if someone were to buy that rental house new and turn it into their primary residence, costs would be something like $5500/mo, but the guy who has owned it for 15 years can rent it for $2500 and still turn a nice prodit.

There is no way you're comparing the same type of property in the same area if buying is $2k more a month plus a $140k down payment.

This . Just doesn't add up