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I dont see that either buddy but perhaps your CPA is a bit more "crestive".
1st year youll do ok but after that its really nothing to bank on.
The whole you need to buy a home as a tax shelter thing seems to be exaggerated.
Good luck.
Crooks
I'm not looking to buy for tax shelter purposes, and I'm with you on it being exaggerated, I'm just validating the calculations.... I mentioned this in this thread and I am quoting it below for convenience....
For the first 5 years the interest + property taxes + PMI is $28k. Itemize it and add 5k for NY state, so its $33k, take out the std deduction... and its $22k. On a 28% bracket its about $6000 per yr or $500 per month. With the MCC you will get another $250 back per month over that so its $750 per month.
Whats wrong here ? Can you point it out ? If you had overlooked the MCC that I mentioned in the previous post, then I can understand.
I'm not looking to buy for tax shelter purposes, and I'm with you on it being exaggerated, I'm just validating the calculations.... I mentioned this in this thread and I am quoting it below for convenience....
For the first 5 years the interest + property taxes + PMI is $28k. Itemize it and add 5k for NY state, so its $33k, take out the std deduction... and its $22k. On a 28% bracket its about $6000 per yr or $500 per month. With the MCC you will get another $250 back per month over that so its $750 per month.
Whats wrong here ? Can you point it out ? If you had overlooked the MCC that I mentioned in the previous post, then I can understand.
I really dont know but it sounds very optimistic.
We had a CPA on this board once.
I dont recall getting that much relief at any point but Ill defer to you.
I know from personal experience the tax difference between owning and renting is HUGE. This had a lot to do with why I bought a house; the taxes were killing me. Now I get a big fat check back every year.
There's a billion variables to consider in the situation-
In a lot of cases, such as yours though- it shouldn't be a rediculous amount more money to own than it is to rent.
One issue seems to be that rents on LI are pretty pricey ESPECIALLY for what you get. Most people are still paying rent rates from a few years back, when houses have knocked about $90K on average from their prices.
We have a 2 bedroom apartment we rent in nassau for $1500 which includes heat,etc.
For us, ownership calculated to a lot higher.
Ownership is almost always higher (and that doesn't count the headaches that come with it when something goes awry).
One important variable which discounts high rent theory is the heat. Like you said, heat is included (and is often times included)....and oil is expensive as well as burner mainteance, etc. So while rents have remained stagnant in general, homeowner bills have not gone down so why should renters get a break? My taxes still increase, oil is a fortune, etc., plus a landlord still should make a profit.
I know a few renters and they are happy with the price range you quoted...
your calc looks reasonable assuming you're doing the MCC right.
Unexpected repairs can get you with a house along with normal maintance. Cable, internet and phone shouldn't be factored into this calc as it will be the same generally renting vs buying. utilities of around 300-400 for electric, gas and water are reasonable assuming oil heat. Oil I figure about 1500-2000 for the season.
Everywhere outside of the major metro areas, its cheaper or equal to buy than rent, due to the difficulty in selling, transaction costs and initial investment. This is economically speaking, if there isn't a large increase in value factored into the equation.
Ownership is almost always higher (and that doesn't count the headaches that come with it when something goes awry).
One important variable which discounts high rent theory is the heat. Like you said, heat is included (and is often times included)....and oil is expensive as well as burner mainteance, etc. So while rents have remained stagnant in general, homeowner bills have not gone down so why should renters get a break? My taxes still increase, oil is a fortune, etc., plus a landlord still should make a profit.
I know a few renters and they are happy with the price range you quoted...
No, ownership isn't always higher...it depends what you buy. I own a tiny studio co-op and I pay $900/mo. Had I rented, it would probably be more $...even for a studio. Renting is such a rip-off.
In regards to headaches, when I rented (only for 3 months), it was more of a headache than owning has ever been. That's for me, it's different for others. I also own a co-op, so I have a super who takes care of those things for me...rather than a house, where responsibility falls on the owner.
Zulu..those $400 LIPA bills would be in the heat summer when the ac is running.
Actually, if D.C. has it's way with Cap & Tax, um, I mean Cap & Trade, any utility that uses coal to make electricity will have to pass along humongous taxes on to the the end user - You. You cook with electricity - buy a gas stove, if this passes, your bills will skyrocket.
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I agree with the earlier post that "in general" owning will cost you more than renting.
If you a buy a house, yes. If you buy a condo or co-op...something smaller, perhaps not. If owning would have come out more for me, I never would have done it. Most people don't want to live in a studio co-op, but at the end of the day I own something and pay less than my renting friends.
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