[quote=ncounty4]No, we don’t think that renting is a wise financial choice in our tax bracket.[/quote]
Actually ncounty4, I suggest you reconsider that. Compare these two case: 1) you buy an 800k property now, 2) you rent an equivalent property for two years, then buy.
In the first case, you will receive a tax deduction worth about 1/3rd or what you pay in interest on your loan. Depending on your interest rate, and the exact amount of your loan, I figure that deduction will be worth about 15k per year, or 30k for two years. ($720k loan times 6% interest times 34% tax bracket = $14688)
In case 2 you get savings because rents in that price range are significantly lower than your mortgage payments. (I’m gonna guess a thousand and a half to a couple thousand a month savings) But here’s the kicker. How much value will that $800k house lose over the next two years. If that house looses even 30k then the tax advantage does not outweigh the loss. And chance are high that an 800k house will lose more than 30k in the next two years.
Consequently, I don’t believe that you should tell yourself that because of your tax bracket renting doesn’t make sense. Quite the contrary, I think that regardless of your tax bracket, buying an 800k house today doesn’t make financial sense.
