Comments on: Rent vs. Buy…the old debate…in an interactive graph

By: Myles

Myles — Tue, 19 Jul 2011 20:34:54 +0000

Maria,

1st – Edit before you enter a comment.
2nd – A single event resulting in a positive outcome is hardly an arguement for proper statistical analysis. A much larger sample size over a far greater period of time is needed to properly assess the growth potential of any asset class. For example, if a person borrowed $1,000 from their friend, went to a roulette table, bet on black and won, it would not mean this outcome should be expected to occur again the next time.

By: Francis

Francis — Wed, 16 Jan 2008 22:38:45 +0000

Maria sounds like a realtor, or just someone who happened to cash in on the bubble. Typical housing returns, averaged over time, are about 4% per year. Using a standard interest formula, I=Prt, her interest yield at that time would be 200,000$ on her 0.5 million dollar house.

Anecdotal data does not make an argument. Plenty of people are osing their homes now because housing has a NEGATIVE return value. Very few people should expect to see any sort of returns like Maria is describing.

By: Tier1Prop

Tier1Prop — Wed, 16 May 2007 05:22:41 +0000

One of the biggest factors is your tax rate. Frankly, people in the 35% federal tax rate are better off buying.

By: Editor

Editor — Thu, 26 Apr 2007 20:45:45 +0000

Maria,

There are many sides to this debate, and we appreciate you sharing your opinion. For some, buying is simply not an option. But, yes…in the long run, it is usually better to buy than rent. If for nothing else than being able to remodel, live in, and enjoy the roof over your head, and space within the walls.

By: maria

maria — Thu, 26 Apr 2007 18:13:39 +0000

Buying is always better than renting. You puchase hold for 10 years and sell.

In 1996 ,you purchase a three unit building for $500,000, make no improvements and in 2006, you sell it for $1,500,000. Can you spell $1,000,000 profit.

This is the story of my three unit building in the Haight that I purchased for $1,500,000.

By: Towse

Towse — Mon, 16 Apr 2007 22:47:27 +0000

In San Francisco, the graph will skew if you are living in a rent-controlled property, meaning the annual rent increase is limited to 60% of the increase in the Consumer Price Index for All Urban Consumers in the Bay Area. (For 2007-2008, the allowable rent increase is 1.5%.)

“Buying is never better than renting over 30 years if annual home appreciation is 2% and annual rent increase is 2%.”

If annual rent increase is 2% and annual home appreciation is 5%, same deal. It’s only when home appreciation tops 6% that it makes any sense to buy, according to this resource, and then the break point is only five years.

Interesting tool.

By: Sophie

Sophie — Thu, 12 Apr 2007 21:16:05 +0000

not even funny. we stay under, by a lot but we knew about it – and we figured out about the same number to plan how much our house cost to just live in it – thus the minimum income needed to avoid selling.

What about people who have a monthly mortgage of 20.000 [for a house that would rent about 6K top] (cf the foreclosure on marina boulevard)? the graph is even funnier. Thanks for that cool link.