2014 May 22 Thursday
Home Rent Or Buy Calculator
The New York Times has a pretty slick rent or buy calculator.
What I'd like to know: what are reasonable numbers to put in for home price growth rate, rent growth rate, investment return rate, and inflation rate. Any guesses? Why?
If one could know that hyperinflation is coming then taking on debt to buy real stuff becomes a simple matter. Yes, do it!
By Randall Parker at 2014 May 22 08:24 PM
Combine it with this, and you have a killer app.
This is actually misleading. Let's say you are renting a home in a nice neighborhood with a decent school system and a reasonable commute to work. What happens when your landlord decides not to renew the lease? Then what? Are you going to be able to duplicate the same conditions with another rental? What happens if rents in your desirable area are scarce?
As a paranoid outsider I have always been a huge fan of a singlewide mobile home on a cheap plot of land in a bad school district.
Maybe I'm just missing it, but what about the reduction of principal. That would be worth ~$3,000 a year in the early years and more later.
But in general, a house is a good deal if you're planning to live someplace for five years or more - assuming normal rents. Also, a house with a 30-year fixed rate mortgage is a very good inflation protection.
what a shit calculator.
the biggest 2 financial questions one has to put a quantitative value on are:
- what is the price i put on risk?
- how much do i value having the possibility to move away from here?
these are highly subjective numbers and only partially captured ("how long do i want to stay here" - as if the majority knows that ex-ante)