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"Tom" <mailtheisaacs@gmail.com> writes:
> 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..
Yup.
> 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...
This is important.
> 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?
You're in a strange area if appreciation is not happening. In most
other places in the country, appreciation has been steaming along at
very very happy rates, and the benefit of appreciation is signficant.
The other part of the equation is what if any lifestyle change does
owning afford ya. If you are comparing renting an apartment vs
owning a similarl size/configuration condo, that too nils out. But
there's also the benefits of living where you're surrounded by folks
who own their places vs just renting. In general, they tend to be
better neighbors and take care of their places better. BUt if it's
attached housing with a condo association, you do not see much of that
anyway.
You seem to have a pretty good handle o nthe finances, and if it
doesn't make finanncial sense, why bother. However, I would challenge
whether prices really have remained flat, and you also have to see
what the market might do in that location in the future. If there's
slim/no chance of appreciation starting to happen, yeah, it doesn't
seem like you should be in any hurry to buy.
--
Todd H.
http://www.toddh.net/
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Re: Why buy a house?
