tag:blogger.com,1999:blog-7402860023733427923.post8256348539773361339..comments2022-03-26T16:15:07.108-07:00Comments on Four Take Flight: Home Sweet Home: Renter's Equityfourtakeflighthttp://www.blogger.com/profile/16836491808057796204noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7402860023733427923.post-67403219269559577132020-07-01T10:57:14.993-07:002020-07-01T10:57:14.993-07:00Hey, thanks for the great comment. You're cor...Hey, thanks for the great comment. You're correct in that we have no desire to stay in a $300k house for the next 30 years. We are simply saying that we think we can consistently find nice places to live over the next 30 years for an average of $1,850 per month (actually I believe it will be much less than this). For example, our first year renting in Spain is going to cost us about $800 per month. That doesnt mean the apartment we rent is worth $300k (this is irrelevant to us as renters). We are more concerned with living in a place that provides us with a happy/high quality of life. I agree that it's apples to oranges to compared $1,850 in rent with a $300k house, but I also believe comparing renting versus owning is apples to oranges, which is why I say that there is no right or wrong here. Work the numbers for yourself and see where they lead you.<br /><br />Agreed on closing costs. My numbers were purposely conservative here. We could certainly increase this value, which would further the case to rent in our situation.<br /><br />I like your 5 year rule. fourtakeflighthttps://www.blogger.com/profile/16836491808057796204noreply@blogger.comtag:blogger.com,1999:blog-7402860023733427923.post-18050531093744467762020-06-30T15:55:07.792-07:002020-06-30T15:55:07.792-07:00Good way of thinking. Two suggestions based on my...Good way of thinking. Two suggestions based on my experience:<br />1) In my experience, the rent for a $300k house is not going to be $1850. The high end of your range is more likely ($2500), which will increase over time. Of course, in your situation, you may not need or want to stay in a $300k house for the next 30 years, but I think it's apples and oranges to compare $1850 in rent over the next 30 years with a $300k house today. <br />2) Unless you know a real estate agent or want to sell a house without a real estate agent (which is becoming easier to do), the closing costs will be way more than $10,000 on a $300k house. When you sell the house, you're probably going to pay 6% in real estate commissions plus another % or two in other closing costs. <br /><br />My general rule is if you're not sure that you're going to be in the same place for at least 5 years, rent. In 5 years, you will have paid off about 7% of the price of the house (assuming 20% down payment), which means you just about break even on the real estate commissions and closing costs.Anonymoushttps://www.blogger.com/profile/05447124169442368838noreply@blogger.com