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The interest and property taxes are tax deductible. Your rent $$$ is
just plain gone. After 30+ years in apt. you own zilch. A house you
will own and then you only owe taxes until you die. If housing prices
surce then you have a great deal of equity to cash in on when selling.
Plus owning a house is incredible. /renting sux.
Tom wrote:
> My wife and I are debating whether we should buy a house / condo /
> townhome or just rent for a longer period..
>
> We have been renting for over 5 years now.. and getting close to being
> bored living in apartments..
>
>
> BUT, when I do calculations, it never seems to make financial sense to
> buy a house..
>
>
> On a ~ 200k house inside / close to the loop, one pays ~ 3k / yr or
> higher in taxes plus at around 6% mortgage, the interest alone is ~
> $12k / yr. So an expense of $ 15k per year.. (I'm keeping the
> principal repayment out of this as this is applied towards reducing the
>
> loan amount and so not an expense)
>
>
> Minus.. the interest deduction from one's income.. Roughly $4k saving
> (at a 33% tax bracket)
>
>
> So recurring expenses of about $ 11k. ($15k minus $4k) (plus
> maintenance costs if in a condo/ townhome..et al)
>
>
> I'm keeping the one time closing cost out of this for now..
>
>
> So in effect.. Rougly, I'm talking about paying $1000 per month even
> when I own a home..
>
>
> I agree that this comes with the potential benefit of appreciation..
> but historical prices in the Houston area has not shown any
> appreciation for a while.. loong while.. and the market in Houston is
> pretty much flat...
>
>
> If I rent, I'll be paying $1k / month towards rent..
> If I own a home, I'll be paying $1k / month towards interest /
> property taxes..
>
>
> Now if I add in the one time closing costs into the picture, ~ $15k..
> then it does not make sense for me buy a home unless I plan to stay
> there for at least 3 - 5 years..
>
>
> So.. I'm requesting advise from all existing homeowners..
>
>
> Why not rent a great place for $1.5k / month with all amenities taken
> care of by the apartment folks rather than own and pay more?
>
>
> I appreciate any and all comments.. Thank you..
>
>
> Tom
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Re: Why buy a house?
