Rent vs. Buy

[4plexowner]

Rustico – to adress your questions – I was taken aback by your comment “monthly principal pay-down is significant, starting at payment one” since that isn’t my perception at all – I guess it is all relative

Here are some numbers on a $475K mortgage – 30 yr fixed at 7% – monthly payment $3160 – $389 principle and $2770 interest – at the end of 10 years the principle portion of the payment reaches $777 per month

I don’t consider $389/mo ‘significant’ when talking about a $500K asset or in comparison to the $2770/mo interest payment so I have always ignored the principle paydown when doing cashflow analysis – this may be a weakness in my analysis – on the other hand, very few loans these days are conventonal fixed-rate so principle paydown is rarely even talked about – I have a 10/20 IO loan on my property so I’m not paying down principle at all until 10 years after the loan originated

[NeetaT]

temeculaguy,

“The tax software”

I think that will be my next step.

Thanks!!!!!

[NeetaT]

temeculaguy,

“The tax software”

I think that will be my next step.

Thanks!!!!!

[NeetaT]

temeculaguy,

“The tax software”

I think that will be my next step.

Thanks!!!!!

[NeetaT]

temeculaguy,

“The tax software”

I think that will be my next step.

Thanks!!!!!

[NeetaT]

temeculaguy,

“The tax software”

I think that will be my next step.

Thanks!!!!!

[NotCranky]

4plex,
Compared to 1% for maintenance, The average HOA, or home owner’s insurance, which are also being included in rent to own calculations it is relatively significant, so I don’t see why it is missing. I am not saying it turns our situation with this market around or anything like that.

“on the other hand, very few loans these days are
conventional fixed-rate so principle pay down is rarely even talked about” –

Yes that is another factor. When I see people do rent vs. buy calculation on this board they generally use fixed notes for the sample. At least, that is how memory of it goes.

Since my mode is primarily going to be a sweat equity mode you bet I will use a loan similar to what you have. I have said too many times how I am mortgage free. I don’t think that will be for long as I am gong to get some dough to build another house. Maybe I will post a thread on that and get some advice. Cash flow is of prime importance since I don’t pay myself much to work, not paydown.

I will be honest I don’t take a very scientific approach to anything. I will try to get cash flow properties, by sweat equity, where necessary and if the parameters we live in don’t change completely, get paid for my efforts in my retirement.

On the topic or apologies, while I don’t feel either of us has a thing to apoligize for I hope that you can try to overlook that I probably do the equivalent of “talking shit”, like many blue collar guys do between themselves.I am talking about the ones that stay friends despite the “shit talking”. I don’t mean to alienate anyone by it and I also will try to cool it, knowing that most piggs are probably used to dealing a little more with a polite society type exchange,which I can’t stand. I won’t be able to stop being opinionated or throwing out things that are contrary to other peoples opinions. I will try to do it more politely.

[NotCranky]

4plex,
Compared to 1% for maintenance, The average HOA, or home owner’s insurance, which are also being included in rent to own calculations it is relatively significant, so I don’t see why it is missing. I am not saying it turns our situation with this market around or anything like that.

“on the other hand, very few loans these days are
conventional fixed-rate so principle pay down is rarely even talked about” –

Yes that is another factor. When I see people do rent vs. buy calculation on this board they generally use fixed notes for the sample. At least, that is how memory of it goes.

Since my mode is primarily going to be a sweat equity mode you bet I will use a loan similar to what you have. I have said too many times how I am mortgage free. I don’t think that will be for long as I am gong to get some dough to build another house. Maybe I will post a thread on that and get some advice. Cash flow is of prime importance since I don’t pay myself much to work, not paydown.

I will be honest I don’t take a very scientific approach to anything. I will try to get cash flow properties, by sweat equity, where necessary and if the parameters we live in don’t change completely, get paid for my efforts in my retirement.

On the topic or apologies, while I don’t feel either of us has a thing to apoligize for I hope that you can try to overlook that I probably do the equivalent of “talking shit”, like many blue collar guys do between themselves.I am talking about the ones that stay friends despite the “shit talking”. I don’t mean to alienate anyone by it and I also will try to cool it, knowing that most piggs are probably used to dealing a little more with a polite society type exchange,which I can’t stand. I won’t be able to stop being opinionated or throwing out things that are contrary to other peoples opinions. I will try to do it more politely.

[NotCranky]

4plex,
Compared to 1% for maintenance, The average HOA, or home owner’s insurance, which are also being included in rent to own calculations it is relatively significant, so I don’t see why it is missing. I am not saying it turns our situation with this market around or anything like that.

“on the other hand, very few loans these days are
conventional fixed-rate so principle pay down is rarely even talked about” –

Yes that is another factor. When I see people do rent vs. buy calculation on this board they generally use fixed notes for the sample. At least, that is how memory of it goes.

Since my mode is primarily going to be a sweat equity mode you bet I will use a loan similar to what you have. I have said too many times how I am mortgage free. I don’t think that will be for long as I am gong to get some dough to build another house. Maybe I will post a thread on that and get some advice. Cash flow is of prime importance since I don’t pay myself much to work, not paydown.

I will be honest I don’t take a very scientific approach to anything. I will try to get cash flow properties, by sweat equity, where necessary and if the parameters we live in don’t change completely, get paid for my efforts in my retirement.

On the topic or apologies, while I don’t feel either of us has a thing to apoligize for I hope that you can try to overlook that I probably do the equivalent of “talking shit”, like many blue collar guys do between themselves.I am talking about the ones that stay friends despite the “shit talking”. I don’t mean to alienate anyone by it and I also will try to cool it, knowing that most piggs are probably used to dealing a little more with a polite society type exchange,which I can’t stand. I won’t be able to stop being opinionated or throwing out things that are contrary to other peoples opinions. I will try to do it more politely.

[NotCranky]

4plex,
Compared to 1% for maintenance, The average HOA, or home owner’s insurance, which are also being included in rent to own calculations it is relatively significant, so I don’t see why it is missing. I am not saying it turns our situation with this market around or anything like that.

“on the other hand, very few loans these days are
conventional fixed-rate so principle pay down is rarely even talked about” –

Yes that is another factor. When I see people do rent vs. buy calculation on this board they generally use fixed notes for the sample. At least, that is how memory of it goes.

Since my mode is primarily going to be a sweat equity mode you bet I will use a loan similar to what you have. I have said too many times how I am mortgage free. I don’t think that will be for long as I am gong to get some dough to build another house. Maybe I will post a thread on that and get some advice. Cash flow is of prime importance since I don’t pay myself much to work, not paydown.

I will be honest I don’t take a very scientific approach to anything. I will try to get cash flow properties, by sweat equity, where necessary and if the parameters we live in don’t change completely, get paid for my efforts in my retirement.

On the topic or apologies, while I don’t feel either of us has a thing to apoligize for I hope that you can try to overlook that I probably do the equivalent of “talking shit”, like many blue collar guys do between themselves.I am talking about the ones that stay friends despite the “shit talking”. I don’t mean to alienate anyone by it and I also will try to cool it, knowing that most piggs are probably used to dealing a little more with a polite society type exchange,which I can’t stand. I won’t be able to stop being opinionated or throwing out things that are contrary to other peoples opinions. I will try to do it more politely.

[NotCranky]

4plex,
Compared to 1% for maintenance, The average HOA, or home owner’s insurance, which are also being included in rent to own calculations it is relatively significant, so I don’t see why it is missing. I am not saying it turns our situation with this market around or anything like that.

“on the other hand, very few loans these days are
conventional fixed-rate so principle pay down is rarely even talked about” –

Yes that is another factor. When I see people do rent vs. buy calculation on this board they generally use fixed notes for the sample. At least, that is how memory of it goes.

Since my mode is primarily going to be a sweat equity mode you bet I will use a loan similar to what you have. I have said too many times how I am mortgage free. I don’t think that will be for long as I am gong to get some dough to build another house. Maybe I will post a thread on that and get some advice. Cash flow is of prime importance since I don’t pay myself much to work, not paydown.

I will be honest I don’t take a very scientific approach to anything. I will try to get cash flow properties, by sweat equity, where necessary and if the parameters we live in don’t change completely, get paid for my efforts in my retirement.

On the topic or apologies, while I don’t feel either of us has a thing to apoligize for I hope that you can try to overlook that I probably do the equivalent of “talking shit”, like many blue collar guys do between themselves.I am talking about the ones that stay friends despite the “shit talking”. I don’t mean to alienate anyone by it and I also will try to cool it, knowing that most piggs are probably used to dealing a little more with a polite society type exchange,which I can’t stand. I won’t be able to stop being opinionated or throwing out things that are contrary to other peoples opinions. I will try to do it more politely.

[SD Realtor]

4plex –

As sdrealtor corrected me on this issue, I will correct you regarding the termite clearance. Lenders do not require a clearance unless the buyer requests a clearance in the purchase agreement. (fact that sdrealtor posted and I did verify)

As far as the transfer goes, since the home may be a transfer of some type by relatives there “MAY BE” an exlcusion you can take advantage of to escape a reassessment however that is PURELY SPECULATIVE on my part.

My main concern is the location of the home. I have been out to Santee and Lakeside alot over the past year and I have watched it come down hard and I really do not see much respite as the downtrend continues. I know there are alot of emotions involved with family owned homes so that is always a tug in the other direction. If you get a good deal on it and can cash flow it positive then perhaps keeping it is a good way to go.

I would indeed get the termite work done just to get it done. Pretty much every home has drywood termites. If you have subt termites then that is bad. I know of many a home that has been treated unsuccessfully for subt types and it is a very tough process that sometimes requires recurring visits, drilling holes in the slab get to them, etc… I would guess you may not have these types. One thing you can do is pull up your carpet in spots and look around. Also check where there are areas of moisture such as shower drains and other things like that. The root of the evil for subt types are moisture under or in hairline cracks in the slab. If you pull your carpet up in a few spots and find them crawling around that may be a bad sign. If you see shavings (powder) from above on the ground it is most likely drywoods so no big problem there.

I am NOT a termite expert. Consult a qualified pest control agency.

SD Realtor

[SD Realtor]

4plex –

As sdrealtor corrected me on this issue, I will correct you regarding the termite clearance. Lenders do not require a clearance unless the buyer requests a clearance in the purchase agreement. (fact that sdrealtor posted and I did verify)

As far as the transfer goes, since the home may be a transfer of some type by relatives there “MAY BE” an exlcusion you can take advantage of to escape a reassessment however that is PURELY SPECULATIVE on my part.

My main concern is the location of the home. I have been out to Santee and Lakeside alot over the past year and I have watched it come down hard and I really do not see much respite as the downtrend continues. I know there are alot of emotions involved with family owned homes so that is always a tug in the other direction. If you get a good deal on it and can cash flow it positive then perhaps keeping it is a good way to go.

I would indeed get the termite work done just to get it done. Pretty much every home has drywood termites. If you have subt termites then that is bad. I know of many a home that has been treated unsuccessfully for subt types and it is a very tough process that sometimes requires recurring visits, drilling holes in the slab get to them, etc… I would guess you may not have these types. One thing you can do is pull up your carpet in spots and look around. Also check where there are areas of moisture such as shower drains and other things like that. The root of the evil for subt types are moisture under or in hairline cracks in the slab. If you pull your carpet up in a few spots and find them crawling around that may be a bad sign. If you see shavings (powder) from above on the ground it is most likely drywoods so no big problem there.

I am NOT a termite expert. Consult a qualified pest control agency.

SD Realtor

[SD Realtor]

4plex –

As sdrealtor corrected me on this issue, I will correct you regarding the termite clearance. Lenders do not require a clearance unless the buyer requests a clearance in the purchase agreement. (fact that sdrealtor posted and I did verify)

As far as the transfer goes, since the home may be a transfer of some type by relatives there “MAY BE” an exlcusion you can take advantage of to escape a reassessment however that is PURELY SPECULATIVE on my part.

My main concern is the location of the home. I have been out to Santee and Lakeside alot over the past year and I have watched it come down hard and I really do not see much respite as the downtrend continues. I know there are alot of emotions involved with family owned homes so that is always a tug in the other direction. If you get a good deal on it and can cash flow it positive then perhaps keeping it is a good way to go.

I would indeed get the termite work done just to get it done. Pretty much every home has drywood termites. If you have subt termites then that is bad. I know of many a home that has been treated unsuccessfully for subt types and it is a very tough process that sometimes requires recurring visits, drilling holes in the slab get to them, etc… I would guess you may not have these types. One thing you can do is pull up your carpet in spots and look around. Also check where there are areas of moisture such as shower drains and other things like that. The root of the evil for subt types are moisture under or in hairline cracks in the slab. If you pull your carpet up in a few spots and find them crawling around that may be a bad sign. If you see shavings (powder) from above on the ground it is most likely drywoods so no big problem there.

I am NOT a termite expert. Consult a qualified pest control agency.

SD Realtor

[SD Realtor]

4plex –

As sdrealtor corrected me on this issue, I will correct you regarding the termite clearance. Lenders do not require a clearance unless the buyer requests a clearance in the purchase agreement. (fact that sdrealtor posted and I did verify)

As far as the transfer goes, since the home may be a transfer of some type by relatives there “MAY BE” an exlcusion you can take advantage of to escape a reassessment however that is PURELY SPECULATIVE on my part.

My main concern is the location of the home. I have been out to Santee and Lakeside alot over the past year and I have watched it come down hard and I really do not see much respite as the downtrend continues. I know there are alot of emotions involved with family owned homes so that is always a tug in the other direction. If you get a good deal on it and can cash flow it positive then perhaps keeping it is a good way to go.

I would indeed get the termite work done just to get it done. Pretty much every home has drywood termites. If you have subt termites then that is bad. I know of many a home that has been treated unsuccessfully for subt types and it is a very tough process that sometimes requires recurring visits, drilling holes in the slab get to them, etc… I would guess you may not have these types. One thing you can do is pull up your carpet in spots and look around. Also check where there are areas of moisture such as shower drains and other things like that. The root of the evil for subt types are moisture under or in hairline cracks in the slab. If you pull your carpet up in a few spots and find them crawling around that may be a bad sign. If you see shavings (powder) from above on the ground it is most likely drywoods so no big problem there.

I am NOT a termite expert. Consult a qualified pest control agency.

SD Realtor

[Author]

Posts