If we use some rules of thumb, it gets closer:
- closing costs - 3-6% of purchase price
- maintenance costs - 1% of current value
Take the down payment and closing costs as an initial investment, the repair costs and any difference in initial mortgage payment vs rent as regular investments, and adjust maintenance and rent (and the difference between mortgage and rent) for inflation. Run those numbers to estimate total wealth after a given period (both house appreciation and investments) and you should end up with pretty similar numbers. I’m ahead on mine as well, but only by ~10% after about 15 years, and my area had really rapid rent growth.
I think it’s an interesting exercise that may not be applicable to everyone since it doesn’t take into account the discipline needed to invest the difference.
ZombiFrancis@sh.itjust.works 1 day ago
That’s also looking at just pure numbers.
I was forced to move every year I was a tenant. I hated it. And the fees and expenses of moving weren’t insignificant, not to mention the time. Some places I lived I never unpacked.
But now I have kids. Things like school districts matter.
Stability matters beyond the strict dollar amount sometimes, if not most times.
sugar_in_your_tea@sh.itjust.works 1 day ago
Sure, there are tons of intangibles that go into it. I’m just saying that people shouldn’t buy because that’s the only way to get ahead, they should buy because that’s the lifestyle they want.
sexybenfranklin@ttrpg.network 1 day ago
Yeah but you’re arguing that to someone who already said they did buy. You can make that point but you’re directing at the person you’re responding to, who has already said they own a house. You are going to strain your shoulder.
sugar_in_your_tea@sh.itjust.works 1 day ago
It turns out more than just the person I responded to read these comments. That is who this exchange is for, OP likely doesn’t care one iota since they’ve already made their decision (and I mine). I’m merely suggesting that home ownership isn’t essential and may even be detrimental to financial success (depending on local markets and personal habits).
I hope it’s an eye opener for someone that decides to do the math and find out for themselves what’s ideal for them. I don’t care one bit if people buy a house or not after reading what I have to say, I only hope that purchasing a house is a lifestyle choice and not an obligation to “get ahead.”