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> Yes but at the same time, your capital isn't trapped in the place that you're living in. It probably varies by person, but I don't see that the same. If i w

> Yes but at the same time, your capital isn't trapped in the place that you're living in. It probably varies by person, but I don't see that the same. If i was paying $2400/mo in rent, then i bought a house for $2400/mo mortgage, the capital in the house is not part of the capital i would have if i had been renting. That would just be gone.

chaostheory 13y ago
> If i was paying $2400/mo in rent, then i bought a house for $2400/mo mortgage, If rent was $2400/m, I can assure you that a house in the same area would be a lot more than $2400/m unless you put %50 or more as a down payment which is at least a few hundred thousand if not a million dollars. That's a lot of capital. If you choose a house in a cheaper area with a mortgage of $2400/m, then I can guarantee that there will be cheaper apartments in the area as well. > the capital in the house is not part of the capital i would have if i had been renting. That would just be gone. I'm not sure I understand what you're saying? Are we in agreement or are you disagreeing?
- lacksconfidence 13y ago
  Currently i rent a 1br place for $2400, looking to buy something. I am strictly guessing that most people in my situation arn't going to be getting a mortgage that is thousands more than their current rent, but rather end up in something a little less nice that has a similar mortgage to the previous rent. i will have to find a cheaper area to be able to buy a house(or condo more likely). > I'm not sure I understand what you're saying? Are we in agreement or are you disagreeing? Rent: pay $2400/mo for 30 years. Spent: $864k. Capital: $0 Buy: pay $2400/mo for 30 years. Spent: $864k. Capital: Whatever the house is worth. Hopefully around the 3-400k the loan was for, but half would still be better than the rent scenario Together that doesn't sum it up, sure in that cheaper neighborhood maybe a rental would be $600 a month cheaper, $216k over those 30 years and more with compound interest. But rent doesn't stay the same like a mortgage does (baring intervention). An apartment that went for $1800 a decade ago (locally) goes for well over $2400 now.
  - chaostheory 13y ago
    > i will have to find a cheaper area to be able to buy a house(or condo more likely). Rent: pay $2400/mo for 30 years. Spent: $864k. Capital: $0 Buy: pay $2400/mo for 30 years. Spent: $864k. Capital: Whatever the house is worth. 1. As you've already mentioned, if you were to stay in the same area rent would be cheaper than a mortgage. Rent is always cheaper than a mortgage for equivalent real estate in the same area. So even if you moved, there would still be really strong reasons for renting since it would still be cheaper than buying a place. So your argument of $2400 rent vs $2400 mortgage is just wrong since moving to a different area will result in $1200 rent (or less). 2. Unlike a mortgage, you're not going to be spending anywhere close to $864k upfront. At most it's only going to be $7200 up front. If you were going to buy a place in the same neighborhood, it's probably going to be about $400,000 upfront, not including closing costs and other fees. Not including stuff like renovation or housing insurance either. Don't forget HOA for certain areas as well. So if you have 500k in cash, if you rented you've about $492,800 for investing or for starting something up. If you bought a place in the same area, you have nothing for investing or starting something. So this "$0k vs Whatever the house is worth" argument is really flawed, especially when you consider that your capital is "stuck" with a huge opportunity cost unless 1) it appreciates a lot and you're willing to BOTH sell and move into a cheaper place that isn't as nice in terms of location or features (if you're not you're just stuck living in a nice expensive place which isn't a bad thing but remember opportunity cost), or 2) you're a professional house flipper (your home really is an investment and not just a place to live), and you repeat this process every 1-4 years. If you haven't already guessed, I'm not a renter and I just figured that you want something more than normal people since you roam HN.
    - deleted 13y ago
      [deleted]
      - chaostheory 13y ago
        Are you responding to the wrong post? What you wrote just further validates everything I've written so far.

chaostheory 13y ago

> If i was paying $2400/mo in rent, then i bought a house for $2400/mo mortgage, If rent was $2400/m, I can assure you that a house in the same area would be a lot more than $2400/m unless you put %50 or more as a down payment which is at least a few hundred thousand if not a million dollars. That's a lot of capital. If you choose a house in a cheaper area with a mortgage of $2400/m, then I can guarantee that there will be cheaper apartments in the area as well. > the capital in the house is not part of the capital i would have if i had been renting. That would just be gone. I'm not sure I understand what you're saying? Are we in agreement or are you disagreeing?

lacksconfidence 13y ago
Currently i rent a 1br place for $2400, looking to buy something. I am strictly guessing that most people in my situation arn't going to be getting a mortgage that is thousands more than their current rent, but rather end up in something a little less nice that has a similar mortgage to the previous rent. i will have to find a cheaper area to be able to buy a house(or condo more likely). > I'm not sure I understand what you're saying? Are we in agreement or are you disagreeing? Rent: pay $2400/mo for 30 years. Spent: $864k. Capital: $0 Buy: pay $2400/mo for 30 years. Spent: $864k. Capital: Whatever the house is worth. Hopefully around the 3-400k the loan was for, but half would still be better than the rent scenario Together that doesn't sum it up, sure in that cheaper neighborhood maybe a rental would be $600 a month cheaper, $216k over those 30 years and more with compound interest. But rent doesn't stay the same like a mortgage does (baring intervention). An apartment that went for $1800 a decade ago (locally) goes for well over $2400 now.
- chaostheory 13y ago
  > i will have to find a cheaper area to be able to buy a house(or condo more likely). Rent: pay $2400/mo for 30 years. Spent: $864k. Capital: $0 Buy: pay $2400/mo for 30 years. Spent: $864k. Capital: Whatever the house is worth. 1. As you've already mentioned, if you were to stay in the same area rent would be cheaper than a mortgage. Rent is always cheaper than a mortgage for equivalent real estate in the same area. So even if you moved, there would still be really strong reasons for renting since it would still be cheaper than buying a place. So your argument of $2400 rent vs $2400 mortgage is just wrong since moving to a different area will result in $1200 rent (or less). 2. Unlike a mortgage, you're not going to be spending anywhere close to $864k upfront. At most it's only going to be $7200 up front. If you were going to buy a place in the same neighborhood, it's probably going to be about $400,000 upfront, not including closing costs and other fees. Not including stuff like renovation or housing insurance either. Don't forget HOA for certain areas as well. So if you have 500k in cash, if you rented you've about $492,800 for investing or for starting something up. If you bought a place in the same area, you have nothing for investing or starting something. So this "$0k vs Whatever the house is worth" argument is really flawed, especially when you consider that your capital is "stuck" with a huge opportunity cost unless 1) it appreciates a lot and you're willing to BOTH sell and move into a cheaper place that isn't as nice in terms of location or features (if you're not you're just stuck living in a nice expensive place which isn't a bad thing but remember opportunity cost), or 2) you're a professional house flipper (your home really is an investment and not just a place to live), and you repeat this process every 1-4 years. If you haven't already guessed, I'm not a renter and I just figured that you want something more than normal people since you roam HN.
  - deleted 13y ago
    [deleted]
    - chaostheory 13y ago
      Are you responding to the wrong post? What you wrote just further validates everything I've written so far.