Let’s say you’re working for FAANG and you are looking for housing. Buy or rent? I mean your mortgage monthly is about the same as rent..
- Google anons2When I looked in the bay, monthly mortgage with prop taxes and everything was like $2-3k more than renting. Not sure where you get the numbers for the "same"
- @TC++ that's my pet peeve also.
People do the biggest financial decision of their life and you would be amazed how few of them even calculate the numbers behind it. Usually they dismiss everything with something like "I'm throwing the rent out the window so it is better to pay the mortgage and get a home after".
This is simply amazing to me. Most of them don't even understand all the other costs associated: closing costs, HOA, taxes, agent fees etc etc
- But come on all you smart people, wtf are you supposed to do? Just rent for 1/3 of your life??? Like wtf. Look I completely understand looking at the NUMBERS prior to any execution or purchases (ie prop taxes, maintenance, HOA, PMI, etc.), but I don’t care what you say, actually paying for a property that you’ll own vs tossing money out the window ideally sounds way more logical. I mean I get the numbers have to match but like come on? Plus in terms of the flexibility, just have someone rent your current pad and move closer...
Idk I feel like being all pessimistic on home ownership is a discouraging tale that is unrealistic and wrong.
- Why are you so attached to buying? Are you an animal that needs some territory to exist??
What is the real difference with renting?? You realize there is a huge industry and lobby with skin in the game that tells you those stories about homeownership to make you feel like you need to own (and they make their cut).
Think about it: what is the difference between renting and buying in regards with the actual home. It is almost nothing. Wouldn't you pick the option that allows you to maximize money in the long term? That seems to be renting today.
Don't be emotional. Do what makes sense economicallyMar 102
- Google noogler@Why does one continue living in SF Bay Area (or any high COL city like NY) paying high property tax till they die? A decent family house costs at least $1.5m with *100% down payments*. With 20% down payments, 30 years’ total payments (including interests, prop tax, insurance, maintenance, HOA) would be around $3m. Of course tax breaks alleviate a bit, but no one knows how those breaks will be adjusted in futures. Also, how many home owners count the amount of property tax for N-M years after retirement (N=years you die, M=years you retire)? If one retires early say at 50-55 years, and continue living say 85-90 years, the prop tax for today’s 1.5m would be 35 years x 15-20k = 525-700k alone assuming tax remains flat (which is impractical).
Personally I prefer to grow my savings with investment and then to retire in a cheaper place, probably a lot of years sooner than who will continue grinding till making enough to continue maintaining a high COL after retirement in the Valley. Just my $.02
- What are you currently paying for rent?
The median home value in San Jose is around 1,082,600. (According to Zillow)
So let’s say you’re looking at buy something at 1 mil. If you only require a $800k mortgage on a 30 year mortgage your monthly payments will likely be $3,959 a month (4.3 interest rate — which is good)
Your property tax will likely be around $7,940 annually (Santa Clara avg tax rate is .794%) most people usually estimate 15k a year for property tax in the bay. So to be safe it’s an extra 1k per month on top of your mortgage.
Depending on the spot you may end up with HOA which can range from 200 - 500 extra a month.
So by time you get to paying for garbage, water, electricity, etc you’re already coughing out close to 5-6k a month.
So as much as I tell myself a mortgage is basically the same as rent it would really only be the same if I bought a 600k house and there aren’t too many of those worth buying at the moment.
Oh and if you don’t have that 200k down for that million dollar home you’re looking 6-7k a month — yikes I’ll take my 3k rent.
- Nope. Search "opportunity cost". What is the best thing you could do with your money? If you don't buy then you need to invest your down payment and the extra money that you are not paying in mortgage.
The bet is that this opportunity is way bigger than the value of the house in 30 years.
That's what people don't get when they say you are throwing money out of the window when you rent.
- Facebook / Eng435You’re forgetting the money that you’re not earning by investing that 200k downpayment, so add another ~1k a month.
While renting might be throwing money out the drain, look at averything you throw down the drain when buying:
* property taxes
* morgage interest
* hoa (maybe)
* opportunity cost of not investing the downpayment
* closing costs
Is all of that lower than the rent? In many cases it’s higher.
That said, rent sucks when sudenly owners want to sell. And your future expenses might be much harder to predict.
- Intel / EngplebI think you, guys, overrate your willingness to sit in a moving box for 3 hours everyday. Just wait until you hit a pothole and spill your hot coffee on your bright white shirt or laptop. I wouldn't do it.
I would rather bet on VR to facilitate teleconferencing so we could work in the same office from home.Mar 110
- The other thing you should consider is: look at Detroit.
One of the most prosperous cities during the car boom. Everyone wanted to buy there similar to here today.
Did you see what it became today?
Can you make sure that the bay area will not become Detroit in 30 + years ? Something to keep in mind.
Renting allows you to dodge that risk.
- Buy is not same as rent. If you buy house in a down market and it appreciates over the years then buy would make sense. If you buy now and am pretty sure there will be a recession at least in the next 5yrs then the depreciation might make you think that u made a stupid decision to buy
But the assumption is that owning a home is the same expense as renting which it isn’t.
And unless you can cover all the rest of the and still save you will end up house poor. And then you better hope the market doesn’t pop and you will be able to get a return on your home so that you can retire somewhere else.
- Depends on a lot of other factors, try exact numbers in an online buy vs rent calculator.
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- Uber qdqwdhsBuy if you have the strength to pay mortgage during recession or at least 4 years and in a place where it's easily rentable such as school district etc! Buy a home that's below your range and have some cash! Buying gives you long term advantage provided you save money and repay the mortgage within 5-10 years if you plan to pay for 30 years I don't think buying makes sense considering the current market.
- Oracle now@googleYou need a crystal ball. We bought 12 years ago. We thought it was crazy expensive back then with 50% of after-tax income going to mortgage/tax/hoa. Now the mortgage is paid off and house doubled in price so in retrospect it was the right choice.
- Buy only makes sense if you believe houses will appreciate significantly..otherwise it might be a financial disaster and destroy your flexibility at the same time..I’m personally all in for flexibility and I believe it’s more likely to see depreciation than appreciation at this point so...RENT