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by jlglover 1996 days ago
Exactly. We just bought in the greater DC area and our mortgage payment is is only $500 more than our previous rent for a house that is much bigger/better. Given that $900 of our mortgage payment contributes to equity, we are throwing less money in the trash than before. Also, I have essentially frozen the amount I have to pay for shelter for the rest of my life (except for property tax and insurance increases). Even if our house never appreciates, it still made more sense to buy than rent.

The above only applies if you are very sure you want to stay in the same house for the long term, otherwise the high cost of real estate transactions will kill any advantage.
2 comments
CydeWeys 1996 days ago
> we are throwing less money in the trash than before.

This phrasing needs to die. You weren't throwing your money in the trash, you were exchanging it for a place to live. There's a big difference between throwing money away and using it to not be homeless.

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jlglover 1996 days ago
Yeah, sorry. That was just my hyperbolic term for "monthly reduction in net worth in exchange for shelter".
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carabiner 1996 days ago
The thing is you still "throw money away" in owning a home through maintenance, see the 5% rule: https://www.youtube.com/watch?v=Uwl3-jBNEd4. There are large, unrecoverable costs in upkeep of a home. You will have to replace the roof in 15-20 years, just to have it not go to crap. That's $20k with no actual improvement to the home. Plumbing, outdoor siding, and so on. These would normally be covered by rent.
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jlglover 1996 days ago
Property tax is bundled into our mortgage payment, so even after considering the 1 % maintenance, our large house and yard worked out cheaper per month than our small rental condo and balcony. Unfortunately, we just had to replace our roof in Sept, but it only cost $6k (despite multiple quotes in the $15k range).

I will acknowledge that owning a house is sometimes like having an extra part time job. I'm forever fixing little things or gardening or changing things about the house. I consider this to be a new hobby, but if you consider it work then that's something else to consider.

edit: I put our loan details into the NYT calculator and it said "If you can rent a similar home for less than... $1,618 PER MONTH... then renting is better." That might get you a 1 bedroom condo around here, instead of a 4 bedroom house with a yard like we got.

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carabiner 1996 days ago
> I will acknowledge that owning a house is sometimes like having an extra part time job. I'm forever fixing little things or gardening or changing things about the house. I consider this to be a new hobby, but if you consider it work then that's something else to consider.

This is good to know and confirms what I've noticed about homeowners. I hate maintaining stuff, whether it's my car or my furniture or whatever, and I only do it if the time/money tradeoff is worth it. Some homeowners seem delighted by it though, crafting their own castle and the like. Do you have time for other hobbies that are "big" with these tasks?

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