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Buy vs Rent for this stat

Amazon osklap

Apr 3 17 Comments

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NW 300k (stock+cash+etf) + 70k (401k)

Rent option = $3200

Buy option = 200k down for 1.1M townhouse
Starting Monthly payment by my Calc (could be wrong) = $6000 (4000 mortgage interest + 2000 to principal)

Buy or Rent ?
Bay area, tc 300k.

Overall I'm really confused about why people buy with low cash given you have to pay so much mortgage interest (same lost money as rent)

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TOP 17 Comments

Google apocrypha

What is your monthly post tax income? With your TC I’m naively going to assume it’s gonna be $12k max. You can’t afford a 50% of your post-tax take home mortgage.

Apr 3 5 1
- Amazon osklap
  OP
  
  You are practically right. This is my year 1 at amazon so it's a bit higher 15k pm with bonus. Going to drop as rsus take over in year 3 and 4.
  
  Apr 3 1
Amazon varumvarum

Rent. Applying the 5% rule here. (1.1M * 5%)/12 = 4583. If you are able to rent a similar house for 3200$ then you are saving more

Apr 3 2 7
- Google UWOM24
  
  Prices can be lower 30 years later. Ask Japan.
  
  Apr 4 0
- Google / IT troll~
  
  Definitely. It is totally related to what is your bet. That was my whole point when I wrote "...if you believe prices won't go up...". Apparently you misread my argument multiple times.
  
  Apr 4 1
Super Micro Computer lmlo38

What’s 5%? Rule

Apr 3 2 1
- Amazon starboy12
  
  Can anyone clarify what is 5% rule?
  
  Apr 4 0
Apple etw6548

Where can you get townhouse for 1.1M in bay?

Apr 3 2 0
Salesforce starlight7

Your rent will keep going up while the interest part of your mortgage will keep going down. The financial numbers will make senses 5 years from now, not today

It doesn’t even count the benefits of house ownership. You are free to make modifications and noone can kick you out

Apr 3 1 2
- Google UWOM24
  
  Prices can crash and burn. Owners get wiped out.
  
  Apr 4 0
- Salesforce starlight7
  
  Make sure that you have an emergency fund just in case. In long term, inflation certainly happens. Even at 3% inflation, the price will 2.5x over the next 30 years. You better lock your home price today
  
  Apr 4 0

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Buy vs Rent for this stat

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