3 ms·
Well the $6k is gone at the end of the month but some portion of the $8k becomes equity.
by zxcmx 7y ago
Well the $6k is gone at the end of the month but some portion of the $8k becomes equity.
- Jack000 7y agoThe apt comparison is between 8k cash and 6k cash + 2k opportunity cost (this is captured pretty well by the NY Times calculator) At a certain ratio it doesn't make sense to buy (eg. imagine 1k rent vs 8k mortgage) This ratio depends on the growth rate of house prices vs opportunity cost (usually the stock market). Both markets have experienced recent instability, and their historical returns are pretty similar so it's a bit of a wash, but you do get much better liquidity with the stock market. Personally I'm renting for 3k an apartment that would otherwise mortgage for 7k, which seems like a pretty good deal.