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Noob
ParticipantActually, I made a mistake in calculating the interest. It is really $280,000. So that means it is even a worse situation to buy in our example.
ParticipantHi Alex,
Your logic is flawed because you did not include the total cost of ownership in your analysis.
When you rent, that is your cost. Over seven years, add it up and you have the number. According to your calculations, you have rented for 7 years at an average cost of $2300 per month.
Your cost for renting: 7 x 12 x 2300= $193,200
Your cost for buying assuming your numbers is really the cost of capital + property taxes + income tax(tax breaks) + maintenance + (gain) or loss in capital.
Your cost for buying a home at $700,000 , assuming 100% financing (6%) and your $100,000 capital loss and making the income tax equation easy by assuming the government pays 40% of the interest in the mortgage for you:
Cost of Capital: $138,000
Income Tax Advantage: ($55,200)
Property Tax (1.2%): $58,800
Maint + HOA estimated: $7000
Capital loss or (gain): $100,000
———————————-
Total Cost to own: $248,600You can see using this approximate example, that you would have paid the bank, the state, your home owners association a lot more — $55,400 more — to own than you would your land lord to rent.
If you don’t like my math, then fine, do your own. Buy you cannot leave out what you have to pay the bank, the state, and the other costs of ownership. Even a Noob knows that.
Good Hunting,
Noob–but learning
ParticipantHi Alex,
Your logic is flawed because you did not include the total cost of ownership in your analysis.
When you rent, that is your cost. Over seven years, add it up and you have the number. According to your calculations, you have rented for 7 years at an average cost of $2300 per month.
Your cost for renting: 7 x 12 x 2300= $193,200
Your cost for buying assuming your numbers is really the cost of capital + property taxes + income tax(tax breaks) + maintenance + (gain) or loss in capital.
Your cost for buying a home at $700,000 , assuming 100% financing (6%) and your $100,000 capital loss and making the income tax equation easy by assuming the government pays 40% of the interest in the mortgage for you:
Cost of Capital: $138,000
Income Tax Advantage: ($55,200)
Property Tax (1.2%): $58,800
Maint + HOA estimated: $7000
Capital loss or (gain): $100,000
———————————-
Total Cost to own: $248,600You can see using this approximate example, that you would have paid the bank, the state, your home owners association a lot more — $55,400 more — to own than you would your land lord to rent.
If you don’t like my math, then fine, do your own. Buy you cannot leave out what you have to pay the bank, the state, and the other costs of ownership. Even a Noob knows that.
Good Hunting,
Noob–but learning
ParticipantHi Alex,
Your logic is flawed because you did not include the total cost of ownership in your analysis.
When you rent, that is your cost. Over seven years, add it up and you have the number. According to your calculations, you have rented for 7 years at an average cost of $2300 per month.
Your cost for renting: 7 x 12 x 2300= $193,200
Your cost for buying assuming your numbers is really the cost of capital + property taxes + income tax(tax breaks) + maintenance + (gain) or loss in capital.
Your cost for buying a home at $700,000 , assuming 100% financing (6%) and your $100,000 capital loss and making the income tax equation easy by assuming the government pays 40% of the interest in the mortgage for you:
Cost of Capital: $138,000
Income Tax Advantage: ($55,200)
Property Tax (1.2%): $58,800
Maint + HOA estimated: $7000
Capital loss or (gain): $100,000
———————————-
Total Cost to own: $248,600You can see using this approximate example, that you would have paid the bank, the state, your home owners association a lot more — $55,400 more — to own than you would your land lord to rent.
If you don’t like my math, then fine, do your own. Buy you cannot leave out what you have to pay the bank, the state, and the other costs of ownership. Even a Noob knows that.
Good Hunting,
Noob–but learning
ParticipantHi Alex,
Your logic is flawed because you did not include the total cost of ownership in your analysis.
When you rent, that is your cost. Over seven years, add it up and you have the number. According to your calculations, you have rented for 7 years at an average cost of $2300 per month.
Your cost for renting: 7 x 12 x 2300= $193,200
Your cost for buying assuming your numbers is really the cost of capital + property taxes + income tax(tax breaks) + maintenance + (gain) or loss in capital.
Your cost for buying a home at $700,000 , assuming 100% financing (6%) and your $100,000 capital loss and making the income tax equation easy by assuming the government pays 40% of the interest in the mortgage for you:
Cost of Capital: $138,000
Income Tax Advantage: ($55,200)
Property Tax (1.2%): $58,800
Maint + HOA estimated: $7000
Capital loss or (gain): $100,000
———————————-
Total Cost to own: $248,600You can see using this approximate example, that you would have paid the bank, the state, your home owners association a lot more — $55,400 more — to own than you would your land lord to rent.
If you don’t like my math, then fine, do your own. Buy you cannot leave out what you have to pay the bank, the state, and the other costs of ownership. Even a Noob knows that.
Good Hunting,
Noob–but learning
ParticipantHi Alex,
Your logic is flawed because you did not include the total cost of ownership in your analysis.
When you rent, that is your cost. Over seven years, add it up and you have the number. According to your calculations, you have rented for 7 years at an average cost of $2300 per month.
Your cost for renting: 7 x 12 x 2300= $193,200
Your cost for buying assuming your numbers is really the cost of capital + property taxes + income tax(tax breaks) + maintenance + (gain) or loss in capital.
Your cost for buying a home at $700,000 , assuming 100% financing (6%) and your $100,000 capital loss and making the income tax equation easy by assuming the government pays 40% of the interest in the mortgage for you:
Cost of Capital: $138,000
Income Tax Advantage: ($55,200)
Property Tax (1.2%): $58,800
Maint + HOA estimated: $7000
Capital loss or (gain): $100,000
———————————-
Total Cost to own: $248,600You can see using this approximate example, that you would have paid the bank, the state, your home owners association a lot more — $55,400 more — to own than you would your land lord to rent.
If you don’t like my math, then fine, do your own. Buy you cannot leave out what you have to pay the bank, the state, and the other costs of ownership. Even a Noob knows that.
Good Hunting,
Noob–but learning
ParticipantHey, they did drop the price from $650k … maybe they wanna chase the market down.
Good Hunting,
Noob–but learning
ParticipantHey, they did drop the price from $650k … maybe they wanna chase the market down.
Good Hunting,
Noob–but learning
ParticipantHey, they did drop the price from $650k … maybe they wanna chase the market down.
Good Hunting,
Noob–but learning
ParticipantHey, they did drop the price from $650k … maybe they wanna chase the market down.
Good Hunting,
Noob–but learning
ParticipantHey, they did drop the price from $650k … maybe they wanna chase the market down.
Good Hunting,
Noob–but learning
January 23, 2008 at 3:02 PM in reply to: Merrill Lynch joins Piggingtonians – Housing to free fall in 208, no uptick till 2011 #141408ParticipantThese Real Estate Hacks and Shrills remind me of Baghdad Bob, the Iraqi propaganda minister during the 2003 invasion. US tanks were practically in the background of his TV shots while he was denying the US was anywhere near Baghdad ….
Good Hunting,
Noob–but learning
January 23, 2008 at 3:02 PM in reply to: Merrill Lynch joins Piggingtonians – Housing to free fall in 208, no uptick till 2011 #141634ParticipantThese Real Estate Hacks and Shrills remind me of Baghdad Bob, the Iraqi propaganda minister during the 2003 invasion. US tanks were practically in the background of his TV shots while he was denying the US was anywhere near Baghdad ….
Good Hunting,
Noob–but learning
January 23, 2008 at 3:02 PM in reply to: Merrill Lynch joins Piggingtonians – Housing to free fall in 208, no uptick till 2011 #141647ParticipantThese Real Estate Hacks and Shrills remind me of Baghdad Bob, the Iraqi propaganda minister during the 2003 invasion. US tanks were practically in the background of his TV shots while he was denying the US was anywhere near Baghdad ….
Good Hunting,
Noob–but learning
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