Rent or Buy a home! Lets discuss!

take the instance of a 2000/month rental price. or 24k/year cost.

say interest rates were 5%. at what price would you decide to buy it instead of rent?

750k? or $4000 in total payment. $48000/yr.

500k? or $2700 in total payment. $32400/yr.

250k? or $1350 in total payment. $16200/yr.

obviously you want the lowest price of the house. but at what point would you say fuck this 2k/mo rent. im buying.

How much can you make in financial markets?

Since I average 20%, I can just keep the $500K cash, make $100K in returns, and pay the $32K rent. But need to also figure expected return of housing market.

thats why im not saying the assumptions. apply your own assumptions. so at what price would you decide to say fuck it. keep in mind

750 is a 3.2% rental yield.

500k is a 4.8% rental yield.

250k is a 9.6% rental yield.

obviously there is other costs im not mentionining, like property tax, maintentance, etc etc. but just curious on everybody’s price for that 2k/mo rent.

Not enough info. What’s your income (single or dual)? What are the property taxes and other expenses besides mortgage? What’s your other expenses besides housing? How stable is your job? How much of your net worth do you want to tie up to home equity?

Personally, no way I am doubling housing expenses just to say I own.

We had a thread on this topic a few years ago and it went the way of the “Net Worth” thread in the CFA General Discussion board. Basically a dumpster fire of epic proportions.

Can’t wait to see how this turns out.

(And the answer is to buy.)

Buy is generally better if prices are going up/stable I think, and especially if you have a lot of kids. You are always paying someone else’s mortgage when you rent, but at least you are putting your money into your home equity that you might’ve spent on some dumb stuff if buy. This will probably change if you are a full cash buyer vs mortgage as well.

His question wasn’t to buy or not to buy. He asked how much to buy

lol. allright. forget the information. say it was real life and you dont know

MY CO WORKER said she would only buy if it was equivalent to what she was paying in rent. she currently rents at a place that is worth $900k. she is paying 3.2k in rent, meaning she would only buy it if the house was selling for $600k.

so if it was a 2k rent, she would only buy the house at $375k.

all im asking for is a price for that 2k rental.

  • Your length of stay: In general, the longer you plan to stay in your new home, the more it makes sense to buy. You said you’re pretty sure you’ll stay in your new home more than five years, so this points strongly in favor of buying.
  • The location of your home: If property values are rising in the location of your new home, it generally makes more sense to buy. Since you indicated that property values are rising, this points in favor of buying.
  • Tax implications: You can deduct the interest you pay on your mortgage from your taxable income. In the early years of a mortgage, mortgage interest payments are large, so this tax deduction can save you a lot of money in taxes. You indicated that you may benefit from this tax deduction, so this points in favor of buying.
  • Your monthly budget: Generally speaking, owning a home imposes larger monthly costs than renting because you need to pay the costs of maintenance, improvements, and property taxes, as well as your mortgage. Since you indicated that your budget is tight after you pay your current bills, this points in favor of renting.
  • Your ability to afford: Over the medium and long term, there are usually significant financial benefits to owning your home, rather then renting it. However, as a homeowner, you will have a steady stream of fairly significant financial obligations that most renters do not have. So, if you are currently strapped for cash each month, then this would not be a good time to buy, even if some lenders are willing to give you a mortgage. However, in your case, it appears that you are not strapped for cash each month. So, this points in favor of buying.
  • Your attitude toward maintenance: Owning a home requires a lot more effort on maintenance than renting does. You indicated that you are willing to put in the extra effort required to maintain a home that you own, so this points in favor of your buying.
  • Your lifestyle preference: Owning a home will require that you make a commitment to staying in one place for a while. You indicated that you are willing to “settle down” in one place for a while, so this points in favor of your buying.

No more than 12-15 years of rental pmts so $290-360k roughly

In my defense, every time I read one of nery’s posts I have a tiny brain aneurysm. I believe I still answered correctly though.

I suspect he is having one himself every time he is writing a post.

why you guys hatin’ on my boy nerdy, he’s just a straight g tryin’ to fatten his stax and provide for his baby mamas

Wait bsd afers rent?

Is that 20% a month or year?

^per DAYUMMMMM son

I got enemies, got a lot of enemies Got a lot of people tryna drain me of this energy They tryna take the wave from a nigga

btw krnnyc why 12 to 15 yrs?

It’s just another rule of thumb.

Bought my Condo a couple years ago because the rent price was about the same monthly as the mortgage payment + HOA dues. Comparable units in the neighborhood are selling for $75k more than my purchase price so I’m feeling pretty good about it.

i would buy at 340k!

You are in LA right? Good luck dude.