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So what do you suggest I do in my mid-20s: buy a house or stay a tenant for life? Why shouldn't I buy a house?

by mablap 10y ago

carsongross 10y ago
Here is a rent v. buy calculator: http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html http://www.nytimes.com/interactive/2014/upshot/buy-rent-calc... Unfortunately, if you play around with it, you will see that future appreciation is one of the most sensitive variables in the equation. My guess is that housing will decline in price, potentially quite seriously, but no one has a crystal ball. I own right now, but I would not buy right now. If it were convenient, I would sell.
- mablap 10y ago
  Where I live, it's a buyer's market. We have plenty of choice. I can live with not making money on my investment, or even losing a bit, as long as it means losing less than I'd have lost renting. EDIT: Wow. I have just used the NYT's calculator with numbers to the best of my knowledge (assuming 0% house price growth). Per them, I should rent. I'm paying $840 in mortgage plus about $180-200 in utilities etc. Their estimate is that I should rent if I can rent a house for less than $1800 a month. That's definitely possible here. Way to make me rethink my investment! If I assume a 3% growth in house prices, I should definitely buy, by a 300$ margin.
tacostakohashi 10y ago
Buy a house if you want. It can be much better than being a tenant for practical reasons - less moving around to keep getting a good deal, not having to constantly play games with your landlord and brokers for new leases, basic repairs and the like, getting the mortgage interest tax deduction and all the rest. Just don't kid yourself that it's an 'investment', don't sink in more money than you need to. Remember, we are all born with short position of one residence, and buying a single residence takes us back to being flat. Buying any more than we need to is going long on housing as an asset class, which may not be the best idea.

So what do you suggest I do in my mid-20s: buy a house or stay a tenant for life? Why shouldn't I buy a house?

by mablap 10y ago

So what do you suggest I do in my mid-20s: buy a house or stay a tenant for life? Why shouldn't I buy a house?

Here is a rent v. buy calculator: http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html http://www.nytimes.com/interactive/2014/upshot/buy-rent-calc... Unfortunately, if you play around with it, you will see that future appreciation is one of the most sensitive variables in the equation. My guess is that housing will decline in price, potentially quite seriously, but no one has a crystal ball. I own right now, but I would not buy right now. If it were convenient, I would sell.

mablap 10y ago
Where I live, it's a buyer's market. We have plenty of choice. I can live with not making money on my investment, or even losing a bit, as long as it means losing less than I'd have lost renting. EDIT: Wow. I have just used the NYT's calculator with numbers to the best of my knowledge (assuming 0% house price growth). Per them, I should rent. I'm paying $840 in mortgage plus about $180-200 in utilities etc. Their estimate is that I should rent if I can rent a house for less than $1800 a month. That's definitely possible here. Way to make me rethink my investment! If I assume a 3% growth in house prices, I should definitely buy, by a 300$ margin.

tacostakohashi 10y ago

Buy a house if you want. It can be much better than being a tenant for practical reasons - less moving around to keep getting a good deal, not having to constantly play games with your landlord and brokers for new leases, basic repairs and the like, getting the mortgage interest tax deduction and all the rest. Just don't kid yourself that it's an 'investment', don't sink in more money than you need to. Remember, we are all born with short position of one residence, and buying a single residence takes us back to being flat. Buying any more than we need to is going long on housing as an asset class, which may not be the best idea.