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Strange that they buried the most important factor way down at the bottom of the 3rd page of "Advanced" options. At its core, the whole rent vs buy economic de

Strange that they buried the most important factor way down at the bottom of the 3rd page of "Advanced" options. At its core, the whole rent vs buy economic decision boils down to comparing your expected returns investing in the housing market to your expected returns investing in the market in general. The rest of the factors in that calculator are just there to help you arrive at the conversion factor. Since it's pretty much impossible to determine what the stock market and housing markets are going to do, it's probably best to base your home buying decision on something more rational. Such as "Do I want to own a house?" For me, the answer to that question is quickly arrived at by asking a few of your homeowner friends what they did last weekend, and what they plan to do next weekend. The answer will invariably revolve around some form of maintenance on the house. Like it or not, buying a house gives you a new full-time hobby. Lots of people like that hobby, and that's why they have houses. If gardening and cleaning gutters don't sound like fun to you, there are plenty of other ways to invest your money that are less hands-on.

yardie 16y ago
Maintenance isn't so bad, and it doesn't require every hour of every weekend. But I've got a small apartment with a small patch of grass. It takes me 10 minutes to cut the grass and 20 to trim the hedges, once a month. Like any hobby, you get out what you put into it. I spent 2 weekends gutting and renovating the kitchen, put ethernet and coax in every room, and wired my garden for electricity and music. My last rental had 3 fireplaces, none of them worked because the owner, rather than paying someone to clean and maintain them decided to plug them up. Ethernet? forget about it. Cable in every room, not an option. The kitchen was nice and new, but designed to someone else's specification, not mine.
netcan 16y ago
If they had a rule of thumb, link between mortgage rate and investment return (eg. r-2 for savings accounts or r + 2 if you think you can beat the risk free rate consistently), would you be satisfied? Increasing the rate of return gives you some interesting curves.
krschultz 16y ago
Nobody says you have to buy a big house. The amount of maitenance is directly proportional to how many plumbing fixtures, windows, appliances, lights, cabinets, etc you have.

yardie 16y ago

Maintenance isn't so bad, and it doesn't require every hour of every weekend. But I've got a small apartment with a small patch of grass. It takes me 10 minutes to cut the grass and 20 to trim the hedges, once a month. Like any hobby, you get out what you put into it. I spent 2 weekends gutting and renovating the kitchen, put ethernet and coax in every room, and wired my garden for electricity and music. My last rental had 3 fireplaces, none of them worked because the owner, rather than paying someone to clean and maintain them decided to plug them up. Ethernet? forget about it. Cable in every room, not an option. The kitchen was nice and new, but designed to someone else's specification, not mine.

netcan 16y ago

If they had a rule of thumb, link between mortgage rate and investment return (eg. r-2 for savings accounts or r + 2 if you think you can beat the risk free rate consistently), would you be satisfied? Increasing the rate of return gives you some interesting curves.

krschultz 16y ago

Nobody says you have to buy a big house. The amount of maitenance is directly proportional to how many plumbing fixtures, windows, appliances, lights, cabinets, etc you have.