11-07-2006, 01:11 PM
Evan Wrote:white_2kgt Wrote:.RJ Wrote:white_2kgt Wrote:I doubt your monthly payments will be much higher than renting
You can rent for $600-800/mo easily. Even 20 year old 2br condos in reston sell for almost $300k.... Reason #1 why I have no interest in buying here.
While it is true you might not be able to buy a house in the same area that you can RENT, you are still better off sinking your $$$ into a house. Is that 6-800 for the entire place, no roommates? I doubt it. So buy a house and get a roommate, problem solved, a 300k house, given the right person doing the financing could only run you $1500, or less.
There is NO argument for renting, unless you just HAVE to live in the middle of a city and not 15-20 minutes outside of it.
Thats not necessarily true
You have to realize that when buying a house you are still "throwing away" a good chunk of change in interest. The tax deduction effectively reduces the interest paid by 30%. What usually offsets this is that the house is appreciating. Since we are in a flat (to negative) market for the short term (2 years?) you have to look at things differently.
For example,
In a $500k 30y mortgage, you have about a $3100 payment, $2700 of which goes to interest! Factor in tax deduction which means you pay about $1900 in interest. Compare that to rent at about $600-$1000 (heavily depending on personal preference of course) and renting is the more economical.
Ordinarily if homes were appreciating that would be well worth it, but since they arent in the short term, that would be $65k paid in interest ($45k tax adjusted) in just 2 years, compared to $14k-24k in rent. And since the houses arent appreciating you arent missing out on that equity gain as a renter, and that money you save in not paying interest you can save for a down payment.
Anyway, this is just my personal thoughts, and my reasoning for not buying a place for 1-2 more years. It changes things of course if you get renters to cover half or more of the mortgage.
This coming from someone who argues that buying a new car is a better financial decision than buying used.
Lets see how you all are making out in 10 years still renting.