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Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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No one can predict the future, but if you would only stay 4-6 years, buying now could be a disaster if the home prices drop during that time. Even if the value keeps going up that number of years won't likely produce a lot of equity, so best to rent, and use the savings toward the down payment when you make the next move.
Currently in a VHCOL area.
Rent is $3250. House payment ... right at $5000.
We will live here 4-6 years maximum.
And if you're held in by a mortgage that 4-6 could easily lead to a 10-15 year term.
The Same Old Question is about how much of the premium VHCOL income you're earning there
(in that VHCOL area) will be required to cover the housing cost obligation there ...
A) can you really cover the nut now and B) how tough would it be to replace a good job THERE.
I don’t know the answer, but what is often overlooked is your return is based on the appreciation of the house value, not your equity. So if a $1 million dollar house goes up 15% in that time frame, you earn $150,000. If your down payment was $200,000, your actual return is 75%.
Your property tax and mortgage interest may also be deductible.
The big if is will your rent go up in the timeframe as well, likely yes.
House payment if we were to buy would be right at $5000.
We will live here 4-6 years maximum.
Napkin/legal pad math is telling me that as long as I invest that $1800 difference I'm "ahead' by a bit.
Sound about right?
It could go either way. If rates go down prices could skyrocket again and you could get a windfall. If prices fall you could be upside down. Rent tends to be more stable. If you had to move in 4-6, could you rent the home out and cover your mortgage?
House payment if we were to buy would be right at $5000.
We will live here 4-6 years maximum.
Napkin/legal pad math is telling me that as long as I invest that $1800 difference I'm "ahead' by a bit.
Sound about right?
Be sure to include the costs of buying and selling a home in your calculations plus the cost of maintaining a home you own. As an example, if you're going from renting to buying are you now responsible for your own lawncare/landscaping and will either have to purchase the equipment to do it yourself or hire a service.
Regardless, if I were in your shoes, I would continue to rent because of the 4-6 year timeframe.
House payment if we were to buy would be right at $5000.
We will live here 4-6 years maximum.
Napkin/legal pad math is telling me that as long as I invest that $1800 difference I'm "ahead' by a bit.
Sound about right?
Hot market, high rates.........keep renting.
2 years ago it would have been buy buy buy!
I've got an distant family member that "rented" for 10 years waiting to "time" the market. They owned for awhile, then divorce/then renting while "timing"
Needless to say it failed miserably.........market spiked 30%++++ and rates ballooned. They bought anyway but its costing more than they fantasized paying and the market has leveled off so future appreciation is on hold.
Rent money evaporates. Mortgage money adds equity, gives you market appreciation leverage and possibly a tax deduction.
I’ve owned 7 or 8 houses in my lifetime and only lost money on one and it was only about $40,000 because we decided to upgrade in a down market. That $40,000 came back to us 5X in the next house. Average stay in each house 5-6 years.
If you are making good coin, itemizing probably is to your advantage anyway and makes home ownership even better.
The last two times we dipped our toes in this market it was epically outrageous. $50k over asking, inspections waived, free rentback for 3 months.
So there's raw number I posted, and then there's a "crazy factor" that might make it all moot.
Appears to be that most things are going for 5% over asking, but no word on inspection waiving and free rentbacks.
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