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re: 5 Reasons Renting Still Beats Buying
Posted on 3/10/09 at 8:36 am to TortiousTiger
Posted on 3/10/09 at 8:36 am to TortiousTiger
quote:
Median price asked for vacant for-sale houses and condos in 2007 in this state: $151,800.
Median contract rent in 2007: $536 (lower quartile is $419, upper quartile is $674)
LINK
I know apartment rentals skew this somewhat, but there are virtually no markets in America where there is a rental premium
1
Posted on 3/10/09 at 8:42 am to igoringa
quote:
Median price asked for vacant for-sale houses and condos in 2007 in this state: $151,800. Median contract rent in 2007: $536 (lower quartile is $419, upper quartile is $674)
You're talking houses and condos which are on avg much larger v. apartments which are much smaller.
There are also MUCH more lower class rentals lumped into that avg.
Posted on 3/10/09 at 8:43 am to igoringa
quote:
I cant comment on one anectdotal claim, but you seriously do not think that is representative do you? In an era where in the past few years anyone can get a house, and currently you need 3% down... you think any market, on average, puts a 33% premium on rent? Please say you dont believe that.
After seeing my landlord in BR's rental list, I believe it.
Posted on 3/10/09 at 8:47 am to GeneralLee
quote:
good advice.... I just wish I could know in advance if the government is going to extend the 8,000 tax credit to 2010. I hate to just throw away 8 grand in free money like that... I know i know you gotta think about the 150 grand + interest you assume to get the 8 grand free....
Go buy that piece of land in Montana, and put like a home made cabin on it. Now its a home, you get your tax write offs and you will be investing in something that you truly want to have in the future, without really diving into the volatile real estate market.
Whoever gave you the advice on being mobile is a very very wise person.
Posted on 3/10/09 at 8:53 am to TortiousTiger
Seriously? If that were the case on a [relatively speaking] nationwide basis, we would have seen, at the very least, a precipitous slowdown in housing price declines already. That defies logic.
Posted on 3/10/09 at 8:57 am to TortiousTiger
quote:
TortiousTiger
Have you included the income tax deductions for mortgage interest and property taxes in your analysis (which would typically add benefit to buying)?
Even so, I agree with most on here that in a typically situation (ie, one where average rents are not 33% higher than the true cost of owning the same home), renting is better in this climate. Hell, I wish I were renting right now but instead I'm stuck with a townhouse that will be vere difficult to resell.
Posted on 3/10/09 at 8:57 am to kfizzle85
quote:
nationwide basis
you are correct. Louisiana has not had extreme symptoms of the floundering economy as many of the other 49.
Posted on 3/10/09 at 8:58 am to Thomas Hudson
quote:
Have you included the income tax deductions for mortgage interest and property taxes in your analysis (which would typically add benefit to buying)?
yes.
how much is your mortgage?
Posted on 3/10/09 at 9:15 am to TortiousTiger
quote:
yes.
Really? I didn't see you list those, so I assume then that they don't get you above the standard deduction?
I.e., assume you pay $10K/year in mortgage interest, plus another $3K/year in taxes. At a 30% tax rate, your tax benefit from owning would be $3900/year. If renting you would still get the standard deduction of $5450 (single), for a tax benefit of $1635/year. Thus, under these numbers buying gets you an additional benefit of $2265/year. Over the five years of your hypo, that adds $11325 to the total benefit of owning.
quote:
how much is your mortgage?
Somewhere around $300K.
Posted on 3/10/09 at 9:18 am to Thomas Hudson
quote:
Over the five years of your hypo, that adds $11325 to the total benefit of owning.
And assuming your initial $300,000 investment has lost 20% of it's value, you're only $48,675 upside down!
Posted on 3/10/09 at 9:21 am to Martavius
quote:
And assuming your initial $300,000 investment has lost 20% of it's value, you're only $48,675 upside down!
you only realize a loss if you sell.
you think home values are going to stay down forever?
Posted on 3/10/09 at 9:22 am to Martavius
quote:
And assuming your initial $300,000 investment has lost 20% of it's value, you're only $48,675 upside down!
1) Those numbers weren't based on $300K. That size mortgage would double the size of that deduction benefit.
2) Luckily, I haven't (and won't) experience a 20% decline below what I paid.
This post was edited on 3/10/09 at 9:23 am
Posted on 3/10/09 at 9:23 am to Thomas Hudson
quote:
2) Luckily, I haven't (and won't) experience a 20% decline below what I paid.
Link?
Posted on 3/10/09 at 9:25 am to Martavius
quote:
Link?
Link to what? There is no link showing what I paid for my townhouse versus what the current or future market value is. At least not that I'm aware of.
Posted on 3/10/09 at 9:25 am to TortiousTiger
quote:
you only realize a loss if you sell.
And on average the length of homeownership in this country is somewhere around 7 years.
quote:
you think home values are going to stay down forever?
Nope, it'll only take 10-12 years to get back to 2005 levels IMHO.
Posted on 3/10/09 at 9:26 am to Thomas Hudson
Looks like you just issued a guarantee that you won't see a 20% decline in your investment and I was wondering how you know that. I'm assuming it's based on some sort of publicly available data.
Posted on 3/10/09 at 9:28 am to Thomas Hudson
what are the property taxes like on townhouses in TX? are they exempt from them or what?
i don't know the texas tax code at all
i don't know the texas tax code at all
Posted on 3/10/09 at 9:28 am to Martavius
quote:
Looks like you just issued a guarantee that you won't see a 20% decline in your investment and I was wondering how you know that. I'm assuming it's based on some sort of publicly available data.
Well, I'm not going to post what I paid, which is not publically available online.
That said, I've seen several recent sales in my area, and judging by those I'd say I could get at or near what I paid for my place. That's not to say I would break even (taking in sales costs, etc.), but it hasn't declined from what I paid.
Posted on 3/10/09 at 9:30 am to Thomas Hudson
quote:
Well, I'm not going to post what I paid, which is not publically available online.
Actually it is. All one needs is the street address and county and it is available on the county tax assessors website.
Posted on 3/10/09 at 9:31 am to SlowFlowPro
quote:
what are the property taxes like on townhouses in TX? are they exempt from them or what?
Same as any other property. About 2.5% of the appraised value, minus homestead exemption.
ETA: The actual tax rate varies by city and county.
This post was edited on 3/10/09 at 9:35 am
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