5 ms·
I think as presented this still can't be comparing things sensibly between these conditions. > more houses = cheaper houses and cheaper rent So why do we say
by abeppu 4y ago
I think as presented this still can't be comparing things sensibly between these conditions.
> more houses = cheaper houses and cheaper rent
So why do we say that buying in scenario 3 costs ~$1.75M and buying in scenario 1 costs ~$1.1M? Everything in the preceding paragraphs makes it sound like her mortgage is fixed. In scenario 1, property taxes and insurance would be higher. Nothing should make scenario 3 more expensive to buy in absolute terms.
- btilly 4y agoThey were counting the present value of the buying decision. Which includes the present value of the resale 20 years later. I have no idea if the calculator that they used factors in property taxes and insurance. But insurance averages something like $5k/year for $1 million of coverage, so does not significantly alter the prices. Whether property taxes do depends strongly on where you live. But generally it is much less than a mortgage.