House in North West portion of DFW metroplex?

[vincentakash]

I feel like people on this board were absent the day they taught math at their school. Turtle creek if I use your percentages which includes the era of the worst housing crisis in history here is what i get.
Example is for:

BUYING A HOME
Lewisville house
purchase price = $200,000
Annaual appreciation % = 1.3%
Market value after 7 years = 218,925
Closing Costs at Purchase = 28,000(10% down + title,lender fees)
Rate = 2.875
Monthly P&I = 1232.50 (15 year note)
Monthly Taxes and Insurance = 500
HOA = 40
Monthly Repairs = 140
Total Monthly Payment = 1912.50
Total Cost after 7 years = $188,608 (Monthly Payments + Down Payment and closing costs)
Closing Costs and Realtor Fees at time of Sale = $18,000
Total Cost at time of Sale = $206,608

Proceeds from Sale = Market Value - Mortgage Principal Remaining
218,995 - 104,586.22 = $114,408.78

Total cost of living for the 7 years = Total cost at time of Sale - Proceeds from Sale
$206,608 - $114,408.78 = 92,199.22

RENTING
This in comparison to a simple calculation of paying rent of 1,830 a month for 7 years = $153,720

Can someone please explain how renting instead of buying saves money...And please don't give the reasons of "oh well if you invest the $28,000 instead making a down payment...."i have counter arguments for that as well.

[nsumner]

As a Realtor, I would say to stay in Frisco. There is no new construction in your price range in Frisco. The closest is in Little Elm or very far north of McKinney, north of 380 around the hospital. Homes under 220K in Frisco do very well and either sell or rent quickly.

Maintenance is key. A reliable and reputable home warranty as well, those can make a world of difference in making life easier.

Naima

[TurtleCreek80]

Originally Posted by vincentakash

I feel like people on this board were absent the day they taught math at their school. Turtle creek if I use your percentages which includes the era of the worst housing crisis in history here is what i get.
Example is for:

BUYING A HOME
Lewisville house
purchase price = $200,000
Annaual appreciation % = 1.3%
Market value after 7 years = 218,925
Closing Costs at Purchase = 28,000(10% down + title,lender fees)
Rate = 2.875
Monthly P&I = 1232.50 (15 year note)
Monthly Taxes and Insurance = 500
HOA = 40
Monthly Repairs = 140
Total Monthly Payment = 1912.50
Total Cost after 7 years = $188,608 (Monthly Payments + Down Payment and closing costs)
Closing Costs and Realtor Fees at time of Sale = $18,000
Total Cost at time of Sale = $206,608

Proceeds from Sale = Market Value - Mortgage Principal Remaining
218,995 - 104,586.22 = $114,408.78

Total cost of living for the 7 years = Total cost at time of Sale - Proceeds from Sale
$206,608 - $114,408.78 = 92,199.22

RENTING
This in comparison to a simple calculation of paying rent of 1,830 a month for 7 years = $153,720

Can someone please explain how renting instead of buying saves money...And please don't give the reasons of "oh well if you invest the $28,000 instead making a down payment...."i have counter arguments for that as well.

Why don't you re-run the math with a 30-year note (most 1st time buyers don't do 15 year notes....they want the extra $200/mo in their pocket)? And increase the interest rate to one for the 30-year note? And change the time of ownership to 5.5 years (OP said 5-6 years in the area, I think).

Oh yeah, and just one year, budge for a $5k repair vs your $1400/yr repair budget.

Also, closing costs at time of sale will be closer to $22k than $18k.

Also, compare it to rent of $1000-1200/mo max; highly doubtful OP is spending $1830/rent per month in Denton.

It won't be quite so favorable.


Math is a funny thing- you can manipulate the numbers to tell whichever story you want but that doesn't make it true.

[Squirl]

Originally Posted by TurtleCreek80

Why don't you re-run the math with a 30-year note (most 1st time buyers don't do 15 year notes....they want the extra $200/mo in their pocket)? And increase the interest rate to one for the 30-year note? And change the time of ownership to 5.5 years (OP said 5-6 years in the area, I think).

Oh yeah, and just one year, budge for a $5k repair vs your $1400/yr repair budget.

Also, closing costs at time of sale will be closer to $22k than $18k.

Also, compare it to rent of $1000-1200/mo max; highly doubtful OP is spending $1830/rent per month in Denton.

It won't be quite so favorable.


Math is a funny thing- you can manipulate the numbers to tell whichever story you want but that doesn't make it true.

I do agree about the 30 year note. However 1000-1200 rent is not a comparison I would consider valid. I just looked at houses for rent in Highland Village for homes 1800-2200 square feet run $1800-$2900 month. This OP is not going to be satisfied living in a $1000/month apartment. Also, as a tenant, you need to also plan for a 5-9% annual rent increase.

[vincentakash]

TurtleCreek80,
I can lower my monthly rent to 1,000 - 1,200 but I will also lower the purchase prices of the home to $110,000. You obviously haven't looked at what $200,000 SFR are renting for.

Also i think i was very generous with $140 a month for repairs which actually equals 1,680 a year. I haven't even taken into account the buyer could have a home warranty purchased.

So you are agreeing that on 15 year note and living there for 7 years is better than renting?

[ChristieP]

A $110k house in DFW is a rare find. And since it will either be old, or out on the fringes of the metroplex, its not going to increase much, if at all, in value.

[Bypass13]

If you live in a rental then you don't worry about appraisal, inspection, closing cost, commissions, mortgage, lawn mowing, pool cleaning, window washing, HOA, repairs, home insurance, property tax, home warranty, maid to clean extra sq footage, high utilities bills, renovating, decorating, upgrading, resale, realtor, etc etc etc. Hassel and stress of buying ,maintaining & selling for a young couple who are here for only 5 years is just not worth the trouble. Live life , travel, study, be free to move wherever heart takes you and have money to afford all the adventures before you finish studies, buy house, have kids and hop on corporate trademill. If you were in a market where houses were a good investment than may be but for $1658 that you may or may not make on a DFW house, certainly not. You two are at work or school for most of the day so if you add socializing and travel then what time you'll have left to spend in that house. Live a little!