Rent vs. Buy

[Anonymous]

I don’t know if this is the right place to ask this. Maybe I should start a new thread. I rent. It was my intent to continue to rent. However, I now co-own a house in Santee with siblings who want to sell “as is” as soon as possible. The house is a 4/2,(1350 sqft) built in the late 60’s and hasn’t been updated and may have some termite damage. I know I need to get an inspection. Do you think it would be worthwhile for me to buy the house? What would be a fair price in this market to offer my siblings? Please, tell me all the things that can go wrong with this idea. Thanks for the advice.

[NotCranky]

I think it is a good idea to start a new thread. This one isn’t drawing them in. The board is always slow on weekends so you might bump the thread up a couple of times to try to get more feedback. I’ll put my .02 in however you want to do it.

[NotCranky]

I think it is a good idea to start a new thread. This one isn’t drawing them in. The board is always slow on weekends so you might bump the thread up a couple of times to try to get more feedback. I’ll put my .02 in however you want to do it.

[NotCranky]

I think it is a good idea to start a new thread. This one isn’t drawing them in. The board is always slow on weekends so you might bump the thread up a couple of times to try to get more feedback. I’ll put my .02 in however you want to do it.

[NotCranky]

I think it is a good idea to start a new thread. This one isn’t drawing them in. The board is always slow on weekends so you might bump the thread up a couple of times to try to get more feedback. I’ll put my .02 in however you want to do it.

[NotCranky]

I think it is a good idea to start a new thread. This one isn’t drawing them in. The board is always slow on weekends so you might bump the thread up a couple of times to try to get more feedback. I’ll put my .02 in however you want to do it.

[NeetaT]

I have a personal example for you. My rent is $1,200.00 a month. If I were to buy the place, it would cost me $300,000.00 cash. I don’t borrow money so that is why I give a cash example. Not counting closing costs and the 3%-6% usurped from me by the realtor when it comes time to sale, the expenses to own are as follows: $250.00 a month for property tax, $200.00 a month for HOA, $100.00 a month for insurance, $20.00 a month for misc. maintenance. Right off the bat you are down $570.00. Now let us do the math.

Own: (-) $570.00 per month

Rent: Interest on $300,000.00 at a meager 5% after taxes is $1,000.00 a month worst case.

Rent = $1,200.00
-$1,000.00
= $200.00 a month out of pocket

Own = $570.00 a month out of pocket

The deference appears to be $370.00 per month cheaper to rent. Now I know this was over simplified math, but I don’t think it is far from the truth. This does not take into consideration the possible appreciation or maybe even depreciation or the variables I mentioned earlier. The bottom line is I don’t feel bad renting. Please let me know if I am using voodoo math or if I have left something out.
I think the disparity gets even bigger if you do the comparison on getting a mortgage.

[NeetaT]

I have a personal example for you. My rent is $1,200.00 a month. If I were to buy the place, it would cost me $300,000.00 cash. I don’t borrow money so that is why I give a cash example. Not counting closing costs and the 3%-6% usurped from me by the realtor when it comes time to sale, the expenses to own are as follows: $250.00 a month for property tax, $200.00 a month for HOA, $100.00 a month for insurance, $20.00 a month for misc. maintenance. Right off the bat you are down $570.00. Now let us do the math.

Own: (-) $570.00 per month

Rent: Interest on $300,000.00 at a meager 5% after taxes is $1,000.00 a month worst case.

Rent = $1,200.00
-$1,000.00
= $200.00 a month out of pocket

Own = $570.00 a month out of pocket

The deference appears to be $370.00 per month cheaper to rent. Now I know this was over simplified math, but I don’t think it is far from the truth. This does not take into consideration the possible appreciation or maybe even depreciation or the variables I mentioned earlier. The bottom line is I don’t feel bad renting. Please let me know if I am using voodoo math or if I have left something out.
I think the disparity gets even bigger if you do the comparison on getting a mortgage.

[NeetaT]

I have a personal example for you. My rent is $1,200.00 a month. If I were to buy the place, it would cost me $300,000.00 cash. I don’t borrow money so that is why I give a cash example. Not counting closing costs and the 3%-6% usurped from me by the realtor when it comes time to sale, the expenses to own are as follows: $250.00 a month for property tax, $200.00 a month for HOA, $100.00 a month for insurance, $20.00 a month for misc. maintenance. Right off the bat you are down $570.00. Now let us do the math.

Own: (-) $570.00 per month

Rent: Interest on $300,000.00 at a meager 5% after taxes is $1,000.00 a month worst case.

Rent = $1,200.00
-$1,000.00
= $200.00 a month out of pocket

Own = $570.00 a month out of pocket

The deference appears to be $370.00 per month cheaper to rent. Now I know this was over simplified math, but I don’t think it is far from the truth. This does not take into consideration the possible appreciation or maybe even depreciation or the variables I mentioned earlier. The bottom line is I don’t feel bad renting. Please let me know if I am using voodoo math or if I have left something out.
I think the disparity gets even bigger if you do the comparison on getting a mortgage.

[NeetaT]

I have a personal example for you. My rent is $1,200.00 a month. If I were to buy the place, it would cost me $300,000.00 cash. I don’t borrow money so that is why I give a cash example. Not counting closing costs and the 3%-6% usurped from me by the realtor when it comes time to sale, the expenses to own are as follows: $250.00 a month for property tax, $200.00 a month for HOA, $100.00 a month for insurance, $20.00 a month for misc. maintenance. Right off the bat you are down $570.00. Now let us do the math.

Own: (-) $570.00 per month

Rent: Interest on $300,000.00 at a meager 5% after taxes is $1,000.00 a month worst case.

Rent = $1,200.00
-$1,000.00
= $200.00 a month out of pocket

Own = $570.00 a month out of pocket

The deference appears to be $370.00 per month cheaper to rent. Now I know this was over simplified math, but I don’t think it is far from the truth. This does not take into consideration the possible appreciation or maybe even depreciation or the variables I mentioned earlier. The bottom line is I don’t feel bad renting. Please let me know if I am using voodoo math or if I have left something out.
I think the disparity gets even bigger if you do the comparison on getting a mortgage.

[NeetaT]

I have a personal example for you. My rent is $1,200.00 a month. If I were to buy the place, it would cost me $300,000.00 cash. I don’t borrow money so that is why I give a cash example. Not counting closing costs and the 3%-6% usurped from me by the realtor when it comes time to sale, the expenses to own are as follows: $250.00 a month for property tax, $200.00 a month for HOA, $100.00 a month for insurance, $20.00 a month for misc. maintenance. Right off the bat you are down $570.00. Now let us do the math.

Own: (-) $570.00 per month

Rent: Interest on $300,000.00 at a meager 5% after taxes is $1,000.00 a month worst case.

Rent = $1,200.00
-$1,000.00
= $200.00 a month out of pocket

Own = $570.00 a month out of pocket

The deference appears to be $370.00 per month cheaper to rent. Now I know this was over simplified math, but I don’t think it is far from the truth. This does not take into consideration the possible appreciation or maybe even depreciation or the variables I mentioned earlier. The bottom line is I don’t feel bad renting. Please let me know if I am using voodoo math or if I have left something out.
I think the disparity gets even bigger if you do the comparison on getting a mortgage.

[SD Realtor]

DGH I believe Santee is going to continue to run downhill pretty hard. Outlying areas including Santee, Lakeside, Escondido, El Cajon, etc will get rammed pretty hard through 08 and 09. My advice would be to sell as well. If you are going to purchase from your sibs then yes, get a termite inspection, get a physical inspection, do as much as you can to build in a cushion because it is not a question of will the home depreciate, it is a question of how much and how long it will go on.

SD Realtor

[SD Realtor]

DGH I believe Santee is going to continue to run downhill pretty hard. Outlying areas including Santee, Lakeside, Escondido, El Cajon, etc will get rammed pretty hard through 08 and 09. My advice would be to sell as well. If you are going to purchase from your sibs then yes, get a termite inspection, get a physical inspection, do as much as you can to build in a cushion because it is not a question of will the home depreciate, it is a question of how much and how long it will go on.

SD Realtor

[SD Realtor]

DGH I believe Santee is going to continue to run downhill pretty hard. Outlying areas including Santee, Lakeside, Escondido, El Cajon, etc will get rammed pretty hard through 08 and 09. My advice would be to sell as well. If you are going to purchase from your sibs then yes, get a termite inspection, get a physical inspection, do as much as you can to build in a cushion because it is not a question of will the home depreciate, it is a question of how much and how long it will go on.

SD Realtor

[SD Realtor]

DGH I believe Santee is going to continue to run downhill pretty hard. Outlying areas including Santee, Lakeside, Escondido, El Cajon, etc will get rammed pretty hard through 08 and 09. My advice would be to sell as well. If you are going to purchase from your sibs then yes, get a termite inspection, get a physical inspection, do as much as you can to build in a cushion because it is not a question of will the home depreciate, it is a question of how much and how long it will go on.

SD Realtor

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