Your logic is flawed because you did not include the total cost of ownership in your analysis.
When you rent, that is your cost. Over seven years, add it up and you have the number. According to your calculations, you have rented for 7 years at an average cost of $2300 per month.
Your cost for renting: 7 x 12 x 2300= $193,200
Your cost for buying assuming your numbers is really the cost of capital + property taxes + income tax(tax breaks) + maintenance + (gain) or loss in capital.
Your cost for buying a home at $700,000 , assuming 100% financing (6%) and your $100,000 capital loss and making the income tax equation easy by assuming the government pays 40% of the interest in the mortgage for you:
Cost of Capital: $138,000
Income Tax Advantage: ($55,200)
Property Tax (1.2%): $58,800
Maint + HOA estimated: $7000
Capital loss or (gain): $100,000
———————————-
Total Cost to own: $248,600
You can see using this approximate example, that you would have paid the bank, the state, your home owners association a lot more — $55,400 more — to own than you would your land lord to rent.
If you don’t like my math, then fine, do your own. Buy you cannot leave out what you have to pay the bank, the state, and the other costs of ownership. Even a Noob knows that.
