[quote=jpinpb]CAR – That was an excellent rent/own analysis. Except, I might have added the down payment money could have been invested elsewhere and earned income perhaps. Thanks for reminding me I’m not throwing away money. As much as I’d like to own, it has to pencil out. Sure some areas are making sense. If you don’t mind living there, then it would be good to buy. Other areas still have a ways to go. Enjoy renting in the area you prefer to be in for much less.[/quote]
Thanks, jpinpb, good question.
I left out the opportunity cost because during this time period, returns on investments were very unstable. Many people have lost tremendous amounts of money while very few have made much in the 2004-2010 time period. As of this point, the Fed still has interest rates pegged at zero, so at best, someone could get 2-3% on liquid money — and that’s going to be taxed. 🙁
I’m just trying to make the numbers as realistic as possible. Making assumptions about future returns in a volatile environment is what got all the large pension funds in such trouble.
