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(former)FormerSanDiegan.
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August 16, 2008 at 7:56 AM #258090August 16, 2008 at 1:28 PM #257842
cr
Participant[quote=Rustico]
I think you must be leaving equity and the beneficial proportionate cash flow shift of later years of owning out of the picture. The person who has not accomplished home ownership often uses up or uses a good portion, of their assets or retirement benefits or to provide shelter(to taste) in their later years.Rent impedes one’s ability to invest the same as a mortgage does. Rent impedes it in perpetuity and gets worse with time as compared to a fixed mortgage. People are bothered by risk and poor returns now but they could be cutting into future costs of shelter with those poorly performing investment dollars instead.
I am assuming we are considering reasonable timing in the purchase of a house or condo and rent at or near their initital mortgage payment threshold.
[/quote]Good point, but then that takes into account how long you live, what you do after you retire, and how much you need.
The rent calculator is a tool, not a decision maker. $2000/mo saved today is worth a lot more than $3000 in 30 years, but that’s not to say I want to still be renting when I retire.
For me personally, my rent is less than a third of what I would spend on a house. With prices falling, I just save that 2/3s until the price is right.
August 16, 2008 at 1:28 PM #258029Participant[quote=Rustico]
I think you must be leaving equity and the beneficial proportionate cash flow shift of later years of owning out of the picture. The person who has not accomplished home ownership often uses up or uses a good portion, of their assets or retirement benefits or to provide shelter(to taste) in their later years.Rent impedes one’s ability to invest the same as a mortgage does. Rent impedes it in perpetuity and gets worse with time as compared to a fixed mortgage. People are bothered by risk and poor returns now but they could be cutting into future costs of shelter with those poorly performing investment dollars instead.
I am assuming we are considering reasonable timing in the purchase of a house or condo and rent at or near their initital mortgage payment threshold.
[/quote]Good point, but then that takes into account how long you live, what you do after you retire, and how much you need.
The rent calculator is a tool, not a decision maker. $2000/mo saved today is worth a lot more than $3000 in 30 years, but that’s not to say I want to still be renting when I retire.
For me personally, my rent is less than a third of what I would spend on a house. With prices falling, I just save that 2/3s until the price is right.
August 16, 2008 at 1:28 PM #258042Participant[quote=Rustico]
I think you must be leaving equity and the beneficial proportionate cash flow shift of later years of owning out of the picture. The person who has not accomplished home ownership often uses up or uses a good portion, of their assets or retirement benefits or to provide shelter(to taste) in their later years.Rent impedes one’s ability to invest the same as a mortgage does. Rent impedes it in perpetuity and gets worse with time as compared to a fixed mortgage. People are bothered by risk and poor returns now but they could be cutting into future costs of shelter with those poorly performing investment dollars instead.
I am assuming we are considering reasonable timing in the purchase of a house or condo and rent at or near their initital mortgage payment threshold.
[/quote]Good point, but then that takes into account how long you live, what you do after you retire, and how much you need.
The rent calculator is a tool, not a decision maker. $2000/mo saved today is worth a lot more than $3000 in 30 years, but that’s not to say I want to still be renting when I retire.
For me personally, my rent is less than a third of what I would spend on a house. With prices falling, I just save that 2/3s until the price is right.
August 16, 2008 at 1:28 PM #258089Participant[quote=Rustico]
I think you must be leaving equity and the beneficial proportionate cash flow shift of later years of owning out of the picture. The person who has not accomplished home ownership often uses up or uses a good portion, of their assets or retirement benefits or to provide shelter(to taste) in their later years.Rent impedes one’s ability to invest the same as a mortgage does. Rent impedes it in perpetuity and gets worse with time as compared to a fixed mortgage. People are bothered by risk and poor returns now but they could be cutting into future costs of shelter with those poorly performing investment dollars instead.
I am assuming we are considering reasonable timing in the purchase of a house or condo and rent at or near their initital mortgage payment threshold.
[/quote]Good point, but then that takes into account how long you live, what you do after you retire, and how much you need.
The rent calculator is a tool, not a decision maker. $2000/mo saved today is worth a lot more than $3000 in 30 years, but that’s not to say I want to still be renting when I retire.
For me personally, my rent is less than a third of what I would spend on a house. With prices falling, I just save that 2/3s until the price is right.
August 16, 2008 at 1:28 PM #258134Participant[quote=Rustico]
I think you must be leaving equity and the beneficial proportionate cash flow shift of later years of owning out of the picture. The person who has not accomplished home ownership often uses up or uses a good portion, of their assets or retirement benefits or to provide shelter(to taste) in their later years.Rent impedes one’s ability to invest the same as a mortgage does. Rent impedes it in perpetuity and gets worse with time as compared to a fixed mortgage. People are bothered by risk and poor returns now but they could be cutting into future costs of shelter with those poorly performing investment dollars instead.
I am assuming we are considering reasonable timing in the purchase of a house or condo and rent at or near their initital mortgage payment threshold.
[/quote]Good point, but then that takes into account how long you live, what you do after you retire, and how much you need.
The rent calculator is a tool, not a decision maker. $2000/mo saved today is worth a lot more than $3000 in 30 years, but that’s not to say I want to still be renting when I retire.
For me personally, my rent is less than a third of what I would spend on a house. With prices falling, I just save that 2/3s until the price is right.
August 16, 2008 at 2:01 PM #257847Eugene
Participant[quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
August 16, 2008 at 2:01 PM #258035Participant[quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
August 16, 2008 at 2:01 PM #258048Participant[quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
August 16, 2008 at 2:01 PM #258094Participant[quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
August 16, 2008 at 2:01 PM #258139Participant[quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
August 17, 2008 at 9:33 AM #257962smshorttimer
Participant[quote=esmith][quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
[/quote]
I’m slow on these things. My federal tax rate is 15%. State is 9.3%? I take it your “35%” has something to do with tax breaks?
Most people here must be in the higher brackets; Homeownership tax benefits can be overstated. A couple earning 65K this year that is thinking about buying a place with $300 HOAs should thoroughly investigate the “tax benefits offset fees/taxes” thing. Do not take “offset” to mean “almost cancels out.”
August 17, 2008 at 9:33 AM #258151Participant[quote=esmith][quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
[/quote]
I’m slow on these things. My federal tax rate is 15%. State is 9.3%? I take it your “35%” has something to do with tax breaks?
Most people here must be in the higher brackets; Homeownership tax benefits can be overstated. A couple earning 65K this year that is thinking about buying a place with $300 HOAs should thoroughly investigate the “tax benefits offset fees/taxes” thing. Do not take “offset” to mean “almost cancels out.”
August 17, 2008 at 9:33 AM #258163Participant[quote=esmith][quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
[/quote]
I’m slow on these things. My federal tax rate is 15%. State is 9.3%? I take it your “35%” has something to do with tax breaks?
Most people here must be in the higher brackets; Homeownership tax benefits can be overstated. A couple earning 65K this year that is thinking about buying a place with $300 HOAs should thoroughly investigate the “tax benefits offset fees/taxes” thing. Do not take “offset” to mean “almost cancels out.”
August 17, 2008 at 9:33 AM #258210Participant[quote=esmith][quote=cooprider]This is the best rent vs. buy calculator I’ve come across
It is a good calculator BUT you have to go into “advanced options” and tweak a few things.
First of all, it uses 20% income tax rate by default, which is not applicable here. Anyone who thinks about buying in San Diego will have his last dollar taxed at around 35%.
“Costs of buying home” are 4% of purchase price by default – I think it should be lower.
[/quote]
I’m slow on these things. My federal tax rate is 15%. State is 9.3%? I take it your “35%” has something to do with tax breaks?
Most people here must be in the higher brackets; Homeownership tax benefits can be overstated. A couple earning 65K this year that is thinking about buying a place with $300 HOAs should thoroughly investigate the “tax benefits offset fees/taxes” thing. Do not take “offset” to mean “almost cancels out.”
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