bostonbubble.com

[Brian C]

QUESTION: For the Renters

How much are you saving by renting your property instead of buying it??

Please factor in taxes, condo fees, etc. You can use similar comps in the area to determine cost to buy.
Your mortgage will be 30 yr fixed, 20% down


Rent - $1100 /month
Own - ($1516 /month mortgage) + ($208/month taxes) = $1724 /month


Savings of $600+ a month!

[HappyRenter !!]

From 018 Zip Code

Saving well over $1K a month

I live in above avg Town for $1200 a month rent

could not touch similar propety for anything less than 2K plus

OWNING IS WAY OVERRATED

Rent, and let the landlord worry about everything

.

[john p]

The interest on the mortgage and the property taxes are tax deductable.

At the beginning of the loan the first few years you pay almost entirely interest, so if you take $1500 mortgage interest plus $208 property tax and you take out the tax shelter of say a 28% tax bracket you shelter about $478k. In addition you most likely would have a condo fee to the tune of about $200 so you can deduct $228 from the grand total to get $1,496 versus $1,100 to rent which is what a savings of $396?

The idea is that in time, the rent can go up but you've locked in your mortgage payment.

The reason to wait right now is that condo might drop in price $50k or more....

[admin]

If you are factoring in the interest deduction, be sure to only factor in the difference. If you didn't itemize deductions before, then your actual savings will only be what you deduct above the standard deduction. The allowable deduction is also limited or reduced if your income is on the low end or on the high end. There are a lot of caveats, so be sure to plug your own numbers into some tax software to determine what you would personally save with the interest deduction.

And if you really want to be thorough, there are a bunch of other expenses to consider as well. Maintenance is a big one. In Brian C's original inquiry, I think the opportunity cost of a 20% down payment could be substantial as well. There is a more thorough list at:

http://www.bostonbubble.com/forums/viewtopic.php?t=29

- admin

[Dorchester Grandma]

Unfortunately I could not afford to buy in the Ashmont neighborhood where I currently rent. I will have to find a property which "needs work", buy in a cheaper area or continue to wait for prices to fall. There is no way that I can come close to buying a condo or even a small house as nice as my current triple decker rental ($1100).

This has been my dilemma. However when I asked my landlord if he might ever sell these units as condos, he said that he has considered selling the entire house. I assume that a new owner would de-lead and get $1700 per mo. renting to section 8 tenants as so many Dorchester landlords are dong.

I have 5 cats so need to have a place of my own. I don't want to be out in the rental market finding "No Pets" everywhere I go. I have to buy to have any real security so I am looking every day while I wait.

[advantagerenter]

i currently pay $2200/month for a brand new 2 bedroom condo, penthouse unit with loft.

the owner paid close to $500k.

the explicit costs:

mine: $2200

his:
mortgage $2500 (assuming 6.5%, 30yr, 20% down)
taxes: $400/month
condo fee: $375/month

all in: $3275 (more if his rate is higher and down payment lower)


i think i'm ahead of the game...especially given the hit market value of hte place at this point...unlikely that he'd get $500k if he tried to sell today.