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re: When does it make sense to buy vs rent?
Posted on 3/24/14 at 6:03 am to Puffoluffagus
Posted on 3/24/14 at 6:03 am to Puffoluffagus
Does your company have a decent relocation package? If so, and if you move for work, an owner's relocation package is usually much more generous than a renter's. The costs of buying may be covered by the employer, so moving in 5 may still be OK.
Posted on 3/25/14 at 12:56 pm to Spirit of Dunson
quote:
Does your company have a decent relocation package? If so, and if you move for work, an owner's relocation package is usually much more generous than a renter's. The costs of buying may be covered by the employer, so moving in 5 may still be OK
This. I just moved for work with a relocation package. As I understand it, the tax law allows for many more items to be expensed if you are purchasing than if you are renting.
Besides, you'll get the mortgage deduction that you wouldn't get.
Based on my experience relocating here's what you need to know:
- Is this a house I actually want to own? Would I be comfortable trying to sell it again or living in it for 30 years?
- Is it the right neighborhood?
- How much investment is required to make this a house I actually want to own?
- What does it cost to rent?
- What is the cost of financing?
Relo package aside, here's a little math I did on the subject:
- Average house in the US $250k
- Mortgage payment on $200k ($50K downpayment and 4.5% rate): $1001.52
- Property Taxes: $300
- Total nugget $1,301.52
- Actual principal over 30 years being paid each month: $556
- Deductible interest and property taxes over 30 years: $745.44 (Total ~$9k / year)
Cost of all the bullshite required to buy and close on a house: $~9k. But assume you were going to buy in the future anyways and were just being conservative?
Annual tax benefit alone to purchasing vs. renting (assuming payments are equal) ~$2K at your income level (I think, not a tax accountant just back of the napkin math).
My advice would be to just make sure you won't want to move in the immediate future, don't just buy for the sake of buying.
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