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nope sorry...no tax break unless you are blind/disabled/severe financial hardship etc.
in fact, just water/sewer cost alone is already $2000ish a year on average...and i'm not talking about elaborate sprinkler system or the upkeeping of over an acre of yard etc. it's like basic cost for perhaps a family of 3-4 person.
It's all relative. Here in SC I think the median family income is like 54k a year or something around that. Many places in the NE have a higher cost of living but the median income is also more. That is why so many northerners retire in the south, along with the weather.
but if i were to just buy the cheapest available property at a super low mortgage/no mortgage...then perhaps the rent vs buy comparison result might be different?
With low mortgate/no mortgage it probably would change the numbers more in favor of buying but I think it would still be dependent on rent vs mortgage for a similar property. It could change or it could remain the same as on a high end property, market appreciation/depreciation, etc. Your interest rate should be around 4.75%, the rest is market dependent.
I am nearing retirement age and we just bought a house last year. Contemporaries of ours have chosen to bank their principle and rent instead. We have both been held prisoner by homes we could not sell when we wanted to. I'm kind of regretting that we did not opt to rent also.
Although our mortage payment is lower than our rent would have been, my biggest worry is not being able to sell quickly if we need to, or if we will be able to afford the upkeep and the property taxes. Renters do not have those worries.
The rent vs buy calculators ( the NY Times version is the best I have seen) are very dependent on where rent and house/condo prices go from here. If one could accurately predict that, there are much riches available well beyond what is better, rent vs buy.
Yeah, what's with the "emotion" comment... I almost responded earlier. "Emotion" is one of the key drivers for buying, it helps drive the machine. From a pure financial perspective, there are very few reasons to buy in a declining market.
and "paying someone else's mortgage" - I never even understood what that means. How do you even know they have a mortgage at all?
He introduced the "emotion" comment if you were following.
Sorry for being snarky, but what about "paying someone else's mortgage" do you not understand? If I own a place, and I have a mortgage, and I rent it out to you for the same amount of my mortgage, you are in essence paying me and then I am paying the mortgage, thus paying my mortgage. I get the equity, and you get a place to live.
He introduced the "emotion" comment if you were following.
Sorry for being snarky, but what about "paying someone else's mortgage" do you not understand? If I own a place, and I have a mortgage, and I rent it out to you for the same amount of my mortgage, you are in essence paying me and then I am paying the mortgage, thus paying my mortgage. I get the equity, and you get a place to live.
But that's assuming everyone who is renting out a house is covering their costs, and that's certainly dependant on the market, especially in recent years.
Real life example: we're leasing from folks who bought their dream house in 2005 and immediately sunk a fortune into the backyard; new landscaping, fruit trees, patio, island w/built in grill, pool, spa, sports court, etc, etc. Before they were able to enjoy even a full summer in the house/yard the husband was transferred. Since they couldn't bear to sell, they chose to rent it out and hope they eventually end up back in the area.
Price to rent ratios are still so out of whack in this area, especially since they bought near the top of the bubble, our monthly rent doesn't even cover their first mortgage, much less the second they took out to do the yard.
To add insult to injury current prices are probably down 20% from the time they bought, and that's being conservative. Plus in the past couple of years they've had to replace a water heater and an air conditioning unit; both pretty big $$ repairs.
Tell me again how we're throwing our money away on rent and they're smart, or are building wealth, or whatever just because they're homeowners.
Maybe there aren't too many folks in a situation as nuts as our landlords, but plenty of folks are accidental landlords right now because they opted to "wait for the market to come back" rather than "give the house away". I bet plenty of them are bleeding money every month instead of building equity as in your simplistic example above.
Maybe there aren't too many folks in a situation as nuts as our landlords, but plenty of folks are accidental landlords right now because they opted to "wait for the market to come back" rather than "give the house away". I bet plenty of them are bleeding money every month instead of building equity as in your simplistic example above.
i hear you. i know for a fact that my landlord is barely covering all the costs with the amount of rent that we pay too....but he'd rather someone takes care of the house than to leave it empty. so for us, i really don't agree with some of the rest who keeps insisting that renting is throwing money away/paying someone else's mortgage. it all depends.......
That is why so many northerners retire in the south, along with the weather.
hahaha...since i'm moving eventually....so better to not be stuck with something?! :P
i like the weather in NE (ok, at least for now but maybe when i'm older i might hate it). don't think i'll wanna go too far south. i don't mind moving to the west coast though....but that's exchanging one expensive place for another
Sorry for being snarky, but what about "paying someone else's mortgage" do you not understand?
Because you're not paying that landlord's mortgage, you're paying the landlord rent.
He might not even have a mortgage. He might be using that rent to buy a yacht, or to light campfires, or wipe his behind. A renter probably doesn't know, and shouldn't care. Anyways, the alternative is "renting" money from the bank.
It boils down to how fast is the market actually declining and whether or not your monthly rent would be equivalent to monthly mort. pmt.
If a mortgage payment is approximately the same amount as rent (it was in my case), then renting does not make sense in most cases. Now, if you did not put enough down or you over bought so that your pmt is 2x or more than renting, then perhaps, renting would have been better from a month to month perspective.
You're obviously not accounting for the lost opportunity cost of that down payment sitting idle for the 25-30 years it takes to break even if rents are the same as a mortgage.
Seriously, take a look at the link I posted previously. The math simply does not work as you think it does.
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