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+--- Thread: ...and you thought Tysons had traffic now. (/showthread.php?tid=5352)
- Apoc - 01-23-2007
.RJ Wrote:$2350 (rent at the new place)
$600000 (what the place next door was selling for)
5% (thats a stretch)
30 yr
6%
10 yrs
1%
1%
Dude, use realistic estimates... you really planning on buying a $600k house? You're also not going to stay in your first house for 10 years, I guarantee it. I also think 1% is a bit conservative. It's not unreasonable to think a house for $250k would appreciate 2% (265k after 3 years).
What about.....
1200, 250k, 4%, 30 yr, 6%, 3 years, 1%, 2%
Edge given to buying and any extra appreciation just pads that number. I think it's probably borderline at this point but I don't think owning is as unattainable as you think it is. Maybe owning what you want to own (would rent) is but that's a whole 'nother ballgame.
- Kaan - 01-23-2007
About 4 weeks before graduation I was sitting at a traffic light in the Burg. I could feel that road rage building up inside me... and there were only 4 fucking cars in front of me!
when you leave this area for an extended amount of time you redefine "traffic." But there is still "traffic." I went back to the dorm and really tried to work on the whole road rage thing... because i knew in 4 weeks i was headed back to NOVA... i didnt do so bad... i even did the 95 commute for 3 years. And i didnt shoot anyone!
now imagine if your job told to you to relocate to LA?
that doesnt work because most of us would ride the motorcycle around and lane split... but what about NYC? 2 hours in a car with expensive parking... or 1 hour on the congested public transportation... pick your poison!
- Evan - 01-23-2007
Apoc Wrote:$550 rent compared to $550k house over 10 years is a savings of $170k if renting. And thats with what looks to be a relatively agressive appreciation rate (current market considering).RJ Wrote:Its going to be a long time before I buy a house around here. The bottom is going to have to drop out of the market something awful if its going to be soon. As long as rent is still fairly reasonable there's no reason for me to piss away $$ on buying a house.
<!-- m --><a class="postlink" href="http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH">http://www.ginniemae.gov/rent_vs_buy/re ... ction=YPTH</a><!-- m -->
What figures are you using here?
I put in what I thought was conservative and ended up with a recommendation to buy.
- .RJ - 01-23-2007
Apoc Wrote:Dude, use realistic estimates... you really planning on buying a $600k house?
Those estimates are as realistic as it gets. And thats kind of the point. Why would I buy a $600k house, when I can rent the same house for $2350 with the reality of it is paying $600-700)?
And if you are only going to stay a few years in your first house, even if it is a crappy small condo, with very little equity appreciation you are going to lose your shirt if you sell it. The rental market is flooded right now with people in that situation.
- Andy - 01-23-2007
What about the tax savings? Interest payments for your home is tax deductable, no?
- Evan - 01-23-2007
Apoc Wrote:Dude, use realistic estimates... you really planning on buying a $600k house? You're also not going to stay in your first house for 10 years, I guarantee it. I also think 1% is a bit conservative. It's not unreasonable to think a house for $250k would appreciate 2% (265k after 3 years).No way anything is going to appreciate 2% in the next 3 years, especially not a 250k condo.
What about.....
1200, 250k, 4%, 30 yr, 6%, 3 years, 1%, 2%
Edge given to buying and any extra appreciation just pads that number. I think it's probably borderline at this point but I don't think owning is as unattainable as you think it is. Maybe owning what you want to own (would rent) is but that's a whole 'nother ballgame.
- Evan - 01-23-2007
Andy Wrote:What about the tax savings? Interest payments for your home is tax deductable, no?the calculator takes that into account. look at the results.
- Apoc - 01-23-2007
Evan Wrote:$550 rent compared to $550k house over 10 years is a savings of $170k if renting. And thats with what looks to be a relatively agressive appreciation rate (current market considering)
Note I said conservative and $550k is anything but. See above. There's a distinct difference between what you can rent and buy for the same cash outlay (obviously). If you absolutely must have xyz in your house and that's $550k then yes, renting is the obvious choice. I'm just talking about buying you first home for the sake of getting into the market. First homes usually aren't everything you want.
To RJ's point... the problem is you're thinking about buying an equivalent to renting. That's never going to work unless you can lay an assload of cash down.
- .RJ - 01-23-2007
Apoc Wrote:I'm just talking about buying you first home for the sake of getting into the market.
Why buy just to "get in" if you arent going to stay? That strategy doesnt work if prices are falling.
Apoc Wrote:To RJ's point... the problem is you're thinking about buying an equivalent to renting
In this market, no it doesnt make sense and you can rent a lot "more" for your money than you can buy.
Andy Wrote:What about the tax savings? Interest payments for your home is tax deductable, no?
What about home maintenance and repair?
Interest is tax deductable, but remember you are deducting against your income, you dont just get all of that back - only a small bit by bumping yourself down a few tax brackets.
I hate to burst anyone's bubble on home ownership given what everyone is told growing up that you are pissing away money by renting, but you piss away every bit as much on ownership with the addition of a lot more financial risk. Things would be much different if you werent in NoVa, or any other major city market.
If you were in a place where house prices were reasonable then buying is a no brainer.
- Evan - 01-23-2007
Apoc Wrote:Note I said conservative and $550k is anything but. See above. There's a distinct difference between what you can rent and buy for the same cash outlay (obviously). If you absolutely must have xyz in your house and that's $550k then yes, renting is the obvious choice. I'm just talking about buying you first home for the sake of getting into the market. First homes usually aren't everything you want.The reality of my situation is that I need a garage and lots of parking, so anything less isnt really even on the table. And low living costs free up cash that I can do dumb shit with.
To RJ's point... the problem is you're thinking about buying an equivalent to renting. That's never going to work unless you can lay an assload of cash down.
I agree with you though, I really wish I got into the market back in 2001/2002 shortly after I graduated. Hindsight is 20/20, but at the time I had no money and no help from parents so it just didnt work.
I guess I could give up racing, probably not a bad idea anyway. But I still dont think Ill buy anything until the market starts back up.
- Apoc - 01-23-2007
.RJ Wrote:Why buy just to "get in" if you arent going to stay? That strategy doesnt work if prices are falling.
I agree, although I was operating under the ASSumption that prices are pretty much level these days.
The problem with Nova is that the market was overinflated by the ridiculously low interest rates and the popularity of interest only loans. I think it's getting to a point where prices are returning to a more normal level and home ownership may become more of a reality in the next year or two.
Evan Wrote:The reality of my situation is that I need a garage and lots of parking, so anything less isnt really even on the table. And low living costs free up cash that I can do dumb shit with.
I agree with you though, I really wish I got into the market back in 2001/2002 shortly after I graduated.
Racers are a unique breed and you're probably a perfect example of the race vs own dichotomy. Your situation is far from conducive unless you want to live in WV. Only reason I can race is because I don't need a truck, a trailer and a place to store them and the car. We were also lucky enough to scrape our way into a small TH in Leesburg back in 2001 despite our combined income at the time being less than I make now.
edit: Screw Allstate and their low paying bitchfaces.
- .RJ - 01-23-2007
Even if prices are level, you're paying almost nothing on your house principal for several years - so you have to pay in extra if you dont want to end up upsidedown.
Foreclosures are up too. House prices are still coming down, but not to what I would consider acceptable. When it becomes cheaper to buy than rent, I'll get on the boat.
- Mike - 01-23-2007
wowow so i just did that calculator. buying is only profitable if you plan on staying there 10-15 years, which i definitely do not at this time. sooo no more worrying about buying, renting is the best plan for a while.
I used:
-1600/mo rent (factoring the female)
-450k house (i don't need big. i need a garage, and something i can work with... i plan on doing serious renovation so age is not too big a factor)
-all the rest default
- REED - 01-23-2007
.RJ Wrote:Apoc Wrote:To RJ's point... the problem is you're thinking about buying an equivalent to renting
In this market, no it doesnt make sense and you can rent a lot "more" for your money than you can buy.
thats true in almost every market in the country. I'm actually almost quite certain that you would be hard pressed to find a place where you could rent or own the same place for the same $$$. The problem I think most people have is the get used to a certain lifestyle that they could afford renting and when they realize that if they wanted to actually consider buying a place and they would have to alter their lifestyle considerably they think "why would I buy a place and downgrade when i can keep renting and live comfortably.
take my situation my rent is ~$700 and I live about 3 minutes walking from the metro. Im quite certain that even ~ $1000 isnt going to get me a place near the metro at all. so for me it is a no brainer to keep renting, however, i dont know how long I plan on being in the area. if I planned on being here for 10 years I would just bite the bullet
- Evan - 01-23-2007
this is exactly what I was saying the last time real estate came up but nobody listened to me
next time ill just write up a javascript calculator :p
- Evan - 01-23-2007
REED Wrote:thats true in almost every market in the country. I'm actually almost quite certain that you would be hard pressed to find a place where you could rent or own the same place for the same $$$.not necessarily
my girlfriend was renting a 1BR place right by U st in a high rise condo. She was paying $1800 and decided to buy a condo.
She bought a much better place in Cleveland Park by metro with parking and pays $1900. For her and her needs in the DC market where rent is recockulous, obviously it was a no brainer that buying was much smarter.
- Apoc - 01-23-2007
Evan Wrote:REED Wrote:thats true in almost every market in the country. I'm actually almost quite certain that you would be hard pressed to find a place where you could rent or own the same place for the same $$$.not necessarily
+1
The only reason we really even considered buying back in 2001 was because our mortgage was going to be the same as any of the places we were looking to rent. After we looked at apartments we thought "Shit, if we're going to pay 1300/month it might as well be to a mortgage." Of course we had to go to Leesburg to find that but we were okay with the commute at the time.
- Mike - 01-23-2007
Evan Wrote:next time ill just write up a javascript calculator :p
can you make your's work in firefox?
- WRXtranceformed - 01-23-2007
Wow I'm really surprised you guys still think that renting is a better solution than buying =P
I ran the numbers for Hauln-SS and I'd be willing to do it for any of you guys as well. The combined tax savings plus higher take home pay plus the fact that you're actually investing your money into something and not throwing it away always always always gives the edge to buying your own home.
The key is to get in on a great deal (i.e. spec home that a builder is trying to dump, foreclosure, etc. etc.) in an area that is always going to be popular for relo's or that has a high rate of growth.
The real estate market is cyclical people. MRIS shows that right now resales are at an extreme low compared to the past year and homes are not staying on the market as long before they are sold. Our company alone is seeing solid numbers and expect a very strong spring. It is still a buyer's market, but that's disappearing quickly. Our prices have slowly been creeping back up because we can.
You get absolutely no return out of renting, and if you're smart about it, when you purchase a home you can pull out what equity you've made and use that to move up to something nicer. OR, if you've been there long enough and your mortgage starts to dwindle, you can pull out a HELOC and use it to add all the features to your home that you couldn't afford to do in the first place (like that 4 car garage with a custom lift and Goliath tool center ^_^ ).
- Mike - 01-23-2007
the link above takes everything you mentioned in to account. appreciation, tax breaks, etc.