Dang. I started a thing with my blather about buy -vs- rent, then went off to fly kites and be otherwise irresponsible.
Maybe I'm smarter than I look.
Cindy's breakdown was very good. It seemed that possibly there was a soft spot around the assumption that rent would have doubled over the period. A 20% increase per year (over initial rent) over five years, however, could cause this. Is that a common practise?
My experience: First home after college dorms (and the rent there just sucked!) was a mobilehome on a rented lot. The "house" was paid for
in toto
out of savings on odd jobs, and my first year of real employment.
Lot rental was like esspresso-money. The sale of the mobilehome and further savings over a year bought outright a three-person house in the Lake Como area of Saint Paul (middle eco-strata, clean, not quite suburban, not quite urban).
The property appreciated, due in no small part to my late wife's assiduous involvement in community issues, over the next five years. Banking a fair rental/mortgage fee for that house in a
nolo me tangere
account during that period netted enough to buy a three-garage thing in Woodbury (decidely suburban, decidely upscale). Ten years of savings there bought a farm in Wisconsin (from a relative, but at fair market value), for a "get-away".
Sale of the Woodbury place brought independence from the corporate masters...
Anyway. The main point is that we accepted less "lifestyle" than we could afford using credit, until we could afford to own it outright.
Anyway. The main point is that we accepted less "lifestyle" than we could afford using credit, until we could afford to own it outright.
Yes, but that's an ideological choice, not a financial one. Basically the formula is
if: (rent over period of saving + price of house) > (price of house + total interest + property taxes - amount mortgage tax break - appreciation)
then: take out loan to buy house
For most people in most markets, this is true. It's not true for everyone; buying at the top of a bubble is bad. And there's a lot of other vague factors, too. How stable your job prospects are, whether you are likely to move within a few years, if you are good at repairs and home improvements or not.
So, Empire Strikes Back is on TV right now. Man, that Han Solo, is there nothing he can't do?
ouch,
oh,
eeww,
Man, that Chewbaka, is there nothing he can't do?
It's not true for everyone; buying at the top of a bubble is bad
I'm sure this is true to an extent. I'd say Madison is at the top of it's bubble. Housing here has been appreciating at over 8% per year for the last 3 years or more. My rent only went up $80 over 4 years, approximately 12% total. What made the difference to me was mortgage rates. I got a WI VA loan at 5.35%. Very hard to beat. Plus, by the time I'm ready to sell, I'll have beaucoup equity because I put nearly $20k down when I bought.
tavella: loving the tagline.
As for the rest ... Yes. Do the arithmetic. If the play looks good, go for it, but first do the arithmetic.
Man, that Chewbaka, is there nothing he can't do?
Opera.
Opera.
You've never hear his 'Rrrgh, Rrrrgh'?
Arm rippingly wonderful.
Oh, The 'Rrrgh, Rrrrgh' Trilogy.
Wagner. Not my thing.
t makes out with resurrected GUS
t gets explicit with Trudy, even graphic, possibly even unrated
Gus! You're looking all familiar and stuff.
joins make out session
I'm on break. I weeded one big flower bed that has been sadly neglected. Doing some laundry for the A/C pleasure, then back outside to do the other bed. I'd prefer to be lounging at the beach.
