Quote:
Originally Posted by twdm
Fourthly, carrying costs. Always look at what it costs for you to rent and compare how much in annual interest/maintenance/taxes etc. A $500k mortgage at 2.7% for 5 years, you're looking at $13.5k (roughly) in interest alone. Now if you add in maintenance fees, taxes, etc you're throwing around $16k "down the drain". These are costs you don't have to bear as a renter. You're also looking at the lowest interest rate period we have seen for a long time. You have to plan for eventual rate hikes (if it doesn't happen, then you're lucky, but you still have to plan for it). When you need to sell, there are also selling costs which in a normal market would wipe out your gains. If you can rent the same place at roughly the same "down the drain" costs, then you'll come out even without the risk associated with home ownership.
|
You look at those costs as "down the drain" I look at those costs as the cost of being my own landlord, with the ability to do what I want with my property, knowing that as long as I can continue to pay my mortgage payments I'm secure in my home (no renovictions, fixed term leases etc to worry about).
There's a value on those benefits, and that's how to monetize it.