The MATH of Buying vs Renting (Tennessee, cost, expenses, get)

[mathjak107]

Originally Posted by UNC4Me

Wharton proved that the higher the income, the higher the mortgage and the higher the write off? WOW. Who could have guessed?

normal income folks benefit little and are generally mislead as to what the tax benefits of buying will be . everyone needs to run their taxes and then pop in the estimated deductible costs of buying so you have before and after . it is only then you will know what it means to you .

high cost areas will do better then low cost .

[UNC4Me]

Originally Posted by mathjak107

of course buying does win many times . my only argument is with those who make broad statements like renting is throwing money away or renters are losers .

that is false .

I agree. Haven't ever heard anyone say that about renters, but it is definitely untrue if anyone does. And even if renting is the worse choice money wise, there are other factors that make it the better option for some.

[UNC4Me]

Originally Posted by mathjak107

normal income folks benefit little and are generally mislead as to what the tax benefits of buying will be . everyone needs to run their taxes and then pop in the estimated deductible costs of buying . it is only then you will know what it means to you .

high cost areas will do better then low cost .

Misled by whom? When my daughter was contemplating the choice she ran her taxes both ways and compared her monthly expenses adjusting for yearly increases in rent before deciding. She made an informed decision. If people are listening to friends or relatives or their realtor or apartment manager instead of getting the facts, it's on them when they make a bad decision. But, again no one is making the call based strictly on money so even if the scales are tilted in one direction, many can and do choose the other option.

[Lowexpectations]

Originally Posted by KathrynAragon

There are many more itemized deductions than just mortgage interest and property taxes. It's not that "hard" to go over $12,600 in itemized deductions because the other deductions include other taxes paid (income tax, sales tax, etc), charitable contributions, medical and dental expenses, casualty and theft losses, many job expenses possibly including (but not limited to) the following:

Business bad debt of an employee.

Business liability insurance premiums.

Damages paid to a former employer for breach of an employment contract.

Depreciation on a computer your employer requires you to use in your work.

Dues to a chamber of commerce if membership helps you do your job.

Dues to professional societies.

Educator expenses.

Home office or part of your home used regularly and exclusively in your work.

Job search expenses in your present occupation.

Laboratory breakage fees.

Legal fees related to your job.

Licenses and regulatory fees.

Malpractice insurance premiums.

Medical examinations required by an employer.

Occupational taxes.

Passport for a business trip.

Repayment of an income aid payment received under an employer's plan.

Research expenses of a college professor.

Rural mail carriers' vehicle expenses.

Subscriptions to professional journals and trade magazines related to your work.

Tools and supplies used in your work.

Travel, transportation, meals, entertainment, gifts, and local lodging related to your work.

Union dues and expenses.

Work clothes and uniforms if required and not suitable for everyday use.

Work-related education.

Check out this extensive list of possible itemized deductions.

https://www.irs.gov/pub/irs-pdf/f1040sa.pdf

I've itemized my deductions literally for decades, including when my income was extremely middle class and probably on the low end of middle class, and it's always been beneficial for me tax wise



.

You posted all that and yet it doesn't change the truth that nearly half of homeowners don't itemize meaning the mortgage interest and property tax payment don't change their tax bill. I know why you'd like people to think otherwise because it's a common added sales line for real estate agents

[Eeko156]

Unless someone is in a transient situation, I don't see how rent is not throwing money away - there simply is no return on it. And this is coming from a renter. Yes, you spend some money on home maintenance. But unless you have a 100 year old farmhouse, I don't think that is a dealbreaker for most people.


I can't imagine what the cost of rents will be in only a few years, let alone 30 years from now.

[UNC4Me]

Originally Posted by Lowexpectations

You posted all that and yet it doesn't change the truth that nearly half of homeowners don't itemize meaning the mortgage interest and property tax payment don't change their tax bill. I know why you'd like people to think otherwise because it's a common added sales line for real estate agents

Even if you don't get any tax savings from a home purchase, you surely do get insulated from rent increases. My daughter was facing an rent increase of $90 a month ($1,080 annual) versus a savings of $125 a month ($1,500 annual) when she was deciding between continuing to rent or buy. She will get some write off of her mortgage interest, but even if she didn't it was still financially better for her to buy.

[Serious Conversation]

Originally Posted by Eeko156

Unless someone is in a transient situation, I don't see how rent is not throwing money away - there simply is no return on it. And this is coming from a renter. Yes, you spend some money on home maintenance. But unless you have a 100 year old farmhouse, I don't think that is a dealbreaker for most people.


I can't imagine what the cost of rents will be in only a few years, let alone 30 years from now.

With the labor market the way it is, a lot of people are having to move around to find work.

[ncole1]

Originally Posted by Eeko156

Unless someone is in a transient situation, I don't see how rent is not throwing money away - there simply is no return on it. And this is coming from a renter. Yes, you spend some money on home maintenance. But unless you have a 100 year old farmhouse, I don't think that is a dealbreaker for most people.


I can't imagine what the cost of rents will be in only a few years, let alone 30 years from now.

Try making the same argument for food and you'll see why it's rather silly.

[Eeko156]

Originally Posted by Serious Conversation

With the labor market the way it is, a lot of people are having to move around to find work.

Agreed. One should be in a stable job position prior to purchasing a home, and several months salary saved up in case they lose that job, so they don't have to lose their house, too.

[Eeko156]

Originally Posted by ncole1

Try making the same argument for food and you'll see why it's rather silly.

Housing takes the largest chunk out of most people's paychecks. You're talking apples and oranges (speaking of food).