NYTimes' Buy v. Rent Calculator (2014, apartments, house)

[flowbe202]

Think the Times may have nailed this.
http://www.nytimes.com/interactive/2...alculator.html

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I'm a BUY.
My "score" was $961. Comparable market rate rents for a place like mine are $1400-1600.

What's your score?

[Parsec]

This is the most comprehensive rent vs buy calculator I've seen, but I'm not too sure how accurate it is. My "score" was $3750/mo. Really? I think I can rent a comparable house for a little less than that, so it's telling me I should RENT. Even though I plan to stay in my house for 20 years? I don't know about that...

[flowbe202]

Where do you think the discrepancy is? Taxes? Mortgage? Housing cost?

[Allharv]

My score was about $2000, but I didn't bother with the lower sliders, so a lot of the meaningful things like home value/rent growth rate, inflation, and investments was at default. There's no way I could rent a house like the one I own for that much--some 2 BR apartments I was considering before I bought my home cost more in rent.

However, a gripe that I have with most of these is that they assume you want to buy and rent the same place, whereas I think many people are more likely to only rent what they need now (cheaper), and potentially buy in consideration of future need as well.

[wxjay]

Where's the "cost" of being in a fixed place by purchasing property versus being "fluid" with renting in case of change in job, etc.? I guess that is part of the "how long will you live here" question, but I would think there is a separate cost for that.

[timberline742]

I'm doing really well by renting, according to this.

[jayrandom]

Originally Posted by wxjay

Where's the "cost" of being in a fixed place by purchasing property versus being "fluid" with renting in case of change in job, etc.? I guess that is part of the "how long will you live here" question, but I would think there is a separate cost for that.

I think that's something you have to answer for yourself. For some people there's a significant economic advantage to being completely liquid and not tied down to anything. For others there is a significant benefit to being in control of their living situation, able to change, remodel, paint, or landscape however you want. These calculators can't really quantify that value because it varies from person to person.

On strictly economic terms, of course, being homeless is probably the best way to save money. That's why it makes sense to factor in the utility of various situations in addition to the cash flows.

[wxjay]

Originally Posted by jayrandom

On strictly economic terms, of course, being homeless is probably the best way to save money. That's why it makes sense to factor in the utility of various situations in addition to the cash flows.

Not true at all. For example, if you're homeless, you cannot get a job (requires a physical address) and hence you wouldn't have the disposable income to purchase the other necessities of life. Your medical costs would also rise if you were homeless (more exposure to the elements and other 'unsavory' things).

Got to remember - everything is not a univariate function - there are multiple co-dependencies.

[raveabouttoast]

Originally Posted by Allharv

However, a gripe that I have with most of these is that they assume you want to buy and rent the same place, whereas I think many people are more likely to only rent what they need now (cheaper), and potentially buy in consideration of future need as well.

This is a very good point. I bought my house in large part because of the location and resale-ability (along with low interest rates). If I was renting, it would be a much smaller and less expensive place.