great NYT rent vs buy calculator
Rent vs. Buy
This 'rent vs buy' calculator with charting is one of the best ones I've seen.
Now, I'm sure that some industry cheerleaders would claim that interest rates investment returns, and mortgage amortization work differently in Special Seattle. Appreciation-Unicorns fly down from the Equity-Rainbowland and make your property appreciate at >5% every year forever.
But I'm trying hard to make the numbers work for me, including a generous downpayment of >20% on an average 2br/1ba place in a whitebread Seattle neighborhood.
The only real way I can make this break even in a reasonable timeframe is to assume a constant 6% appreciation of a house, alongside a constant 4% yearly increase in rents. Do these parameters sound reasonable?
This 'rent vs buy' calculator with charting is one of the best ones I've seen.
Now, I'm sure that some industry cheerleaders would claim that interest rates investment returns, and mortgage amortization work differently in Special Seattle. Appreciation-Unicorns fly down from the Equity-Rainbowland and make your property appreciate at >5% every year forever.
But I'm trying hard to make the numbers work for me, including a generous downpayment of >20% on an average 2br/1ba place in a whitebread Seattle neighborhood.
The only real way I can make this break even in a reasonable timeframe is to assume a constant 6% appreciation of a house, alongside a constant 4% yearly increase in rents. Do these parameters sound reasonable?
Comments
I love this calculator too because it's shocking. Only in bizarro world could you be better off renting than buying. That's the world we're living in now in Seattle.
Don't forget to tweak the "advanced" function on the right if you're doing better than 6 percent on the stock market. If you're not, fire your broker, (or hire a broker).
I've been reminded here that investors face different hurdles. The old ROI rule was 100X rent/price: So $100,000 should return 10% in rent before expenses, or $1000 in rent. Even if you bend this rule, rentals look like the worst possible investment right now.
I think that equation does help explain why the smart money is looking elsewhere. None of this bodes well for the Seattle market in 2007 and 2008.
So really, its a tax savings on interest you pay minus the normal 5150.