Why renting is better in this real estate market.
Buy house 240k 30yr 5.6%
payment 1306
tax 400
insurance 60
mortg ins. 100
--------------
1866 per month
At the end of 5 years
-62k interest paid
+17k principal gained
+50k equity gain
-8k insurance paid
-26k tax
-----------
-29k you've actually lost money

Rent 550 month
insurance 15 month
Save 1300 month (1866 -550 -15)
At the end of 5 years
-33k rent
+78k saved
-1k paid in insurance
-50 equity loss...house cost 50k more
----------
-6k you have lost 23k less

23k /60 = 383k per month 383 financed @ 5.6% over 30 yrs = 67k This means
that housing is 67k over valued in this case vs rent. Meaning housing could easily fall 25% over 5 years.
240k -67k = 173k


Yes, I do own a home [img]i/expressions/face-icon-small-wink.gif[/img]

 

I do not know where you got your figgures from, but in southern California, it is more accurate to use these figgures.

Average house price in San Diego $456,000
Average rent $1300.00 per month

Own
My mortage is for $100,000 with a fixed 4.5% 15 year loan
Monthly payment $765.00
Insurance $625.00 year
Taxes $2200.00 year
Deduct all interest from loan, deduct all property taxes

Rent

$1300.00 per month
Insurance. $500.00 per year
No taxes
No deductions

I paid $140,000 for my home and land. it is now worth 8 years later $565,000.

I rented for 14 years and saw my rent go from $400.00 a month to $900.00 a month. For all of the 14 years I had zero to show for my cash.

You do the math.

 

Mudstud,
Your comparing apples to oranges. Rent on a $240K house is going to be a lot more than $550. Try doubling that rental figure. Also if you put 20% down you avoid the mortgage insurance. You guys must have some seriously high property taxes in Wisconsin if your paying $400/month.

I bought my house four years ago for $240K and it would easily sell today for $350K.

Your never going to gain that kind of equity sitting in a rental.

 

Taxing on a in town house at 2000g is around 3900 -4200 yearly. so its NOT that far off.

You and I both know you want to own, its just a play on numbers.

 

you can rent the back house for 550 in a 240K house ..LOL

 

If you think owning a house doesn't work, you should try penciling out farm land. With increasing efficiency, outside investment, and government programs it's getting ridiculous.

 

yeh i have the same problem with my 4 wheeler too?? [img]i/expressions/face-icon-small-cool.gif[/img]

 

i paid $150k for my house 10 years ago now it's apprased at $180k. my payments run $650 a month, taxes run $1450 a year and insurance is $580 every six months for dirrect replacement insurance. to rent the same house would cost $750 a month if your lucky and at the end of the lease you have nothing to show for the money you have spent. in 10 years the value will most likely be over $200k the way realistate is going. and in 20 years probably be close to $275 or $300k. if you are planning on moving renting probably would be the way to go but if your planning on staying in the house for the next 20 years or so it's a good investment. my first home was bought for $35k and we sold it for $80k after living in it for 16 years. not a bad return. if we were renting the same place for $450 a month for the 16 years we would have spent $86,400 and would have gotten nothing when we moved.

 

Heh Heh Heh, I have a house for rent if yer interested. $550 a month sounds good to me.[img]i/expressions/face-icon-small-wink.gif[/img]

ROFL.

BTW, I appreciate renters. They pay my mortgages,taxes and build my net worth. And they are not hard to find.

 

I cant rent a Doghouse in CT for $550 a Month[img]i/expressions/face-icon-small-disgusted.gif[/img].
But I bought a house, and its Appreciated some 30% in the last 2 years.
Now thats a investment.........[img]i/expressions/face-icon-small-smile.gif[/img]