/biz/ - Business & Finance

Buy a duplex, let someone else pay for mortgage and maintenance.

>>16931369
Bump, in the same situation

>>16931369
Well you’re building equity as opposed to just having sunk capital. Not to mention at today’s historically low rates, it’s often cheaper to have a mortgage than a monthly rent payment. Mortgage interest is deductible on taxes. Also, when you’ve built decent equity you can start utilizing HELOCs, this allows you to leverage a revolving straight line of credit which many investors roll over into investment units. This technique can allow you to pay down your note in 5-8 years as opposed to 20+. The question is, is the housing market currently over inflated to the degree where you cant justify taking out a note at these historically low rates?

>>16931369

Buying a house requires the following:

5-100% downpayment
Maintenance
Insurance
Taxes
Mortgage payments
Possible increased commute times

In general, single family units of any type, condo or house, generates around 10% gross yield on the high side and around 6% on the low side depending on the market, let's say 8% on average.

So for a $300k house, he charges around $22k/year and net is around 50% of that.

Cost to buy @$300k is around $60k down, $240k loan, 1% per year property taxes, 1% general maintenance. Insurance is probably like .3%.

$240k @3.75% is $1100/month
Taxes are $250/month
Insurance @ $100/month
Maintenance @ $250/month
All in $1700/month.

But let's not forget the time value of your $60k.

Even in a shitty yield, that's doing around 6-10%/year. So that's $3600-6000/year or
$300-500/month in lost equity growth.

Total ownership cost is now $2000-2200/month. Compared to $1833/month rent.

If you have literally any ability to make money on your money, 10% a year is bare minimum in the current market, and I'd say 20% is more realistic but that's just me with a business that makes me 400%/year on my money.

>>16931606

So instead of $2000-2200, it's more like $2200-$2700/month for that house in lost earnings.

These numbers sway more in favor or renting in certain areas vs others. Let's not factor risk of loss on your property, but we can assume a 3% average growth in your property value if you ever sell it. So a 1-year yield would be around $9I vs the $6-12k investing it semi properly in the market.

>>16931606
You forgot to deduct mortgage interest and depreciation

>>16931646
The point being, the more value you can generate from your money via being smart or successful, the less incentive there is to own a house.

Homes are great for wagies with low future growth potential or expectation of leaving to a better place.

>>16931646
I'm inclined to believe that being accountable by time is potentially more credible than even being addicted to crack.

>>16931661
Tax benefits are not real items in consideration here. Generally speaking, these will have little impact on anyone below extremely high earnings to mitigate higher tax brackets. A wagie making $30k/year wont see any real benefit. And if we play by this, a long-term hold stock portfolio growing monthly with the extra savings from renting vs buying will see a larger useful return.

Broker fees, taxes and title/transfer/selling cost will eat most gains made on a house. Cap gains will only matter if the stocks are sold.

>>16931713
I see what you’re saying, but in all fairness, interest expense is extremely high on the first 10-15 years of the note term. Was just highlighting it for when you calculated the monthly expenses between the two

>>16931674
Not sure what you mean by this statement.

>>16931724
Interest expense being a simple rate of approximately 3.75% so in this case around $9000/year deducted from income is realistically worth about 24% or $2160 after a whole year of prepayment that I would rather have invested. Then again you can deduct a percentage of rent as a home office so how much value are we really getting here.

>>16931724
I would also incline myself to use the credit potebtially spent on a house to invest in any advantageous investments with a posative spread vs interest. If I could deploy the $240k that would be spent on a house to launching or growing any business, the discussion become pointless since that option far outranks a home purchase.

If you don't have daddy's money or ain't incredible lucky....

Owing a house is literally the only way to raise your station without blood sweat and tears and sleepless nights, and the government sniffing around you for money.

You need a house to properly raise your children.

>>16931369
You only need to know one thing to sift through all the "woke" posts.
Any cost realted to ownershipe is priced in the rent. You'll pay these no matter what

>>16931606
I would avoid using the phase "time value of money" as that is a mathematical calculation related to finance and is completely unrelated to your definition. Moreover, your "time value of money" definition is actually accedemically defined as an opportunity cost

>>16932347
Technically both need to be expressed in this situation. Time value pertaining to the present value of current and future cashflows generated by investing the otherwise wasted deposit funds and net savings from renting vs the present value of cashflows generated by a house that is nothing but a net loss of funds until resale, refinance or conversion to a rental. All of this helps to figure out the opportunity cost pertaining to investing In a home vs a good investment such as business or commercial or multifamily property.

$60k of deployable capital plus extra investment capital from rent savings is pretty much guaranteed to generate more than non-performing assets such as houses that statistically will hardly manage to generate returns beyond inflation.

if i move out can afford to rent it out?
if you answer no then the answer is no

>>16931760
$9000 doesn't even reach the standard deduction LMAO. Your shitty writeoff is worthless.

>>16931369
Buying a house is always better, Right now it's too inflated. Wait for the inevitable crash and then buy a house which will come in the coming year. If you don't believe it will come then you deserve to lose your money. Rich people saving cash to buy houses up when it crashes.

>>16933063
>Rich people saving cash
lmao, do you realy believe that?

>>16933091
They have cash in bank accounts waiting to buy up property when the recession hits, Obviously their entire net worth isn't in cash retard, It's in gold, silver, land and crypto(even though faggots like buffet says he hates crypto he definitely owns million of crypto)

>>16931369
moving is essential
since we are at the top
you will sell lower
so, at the moment buying is a no no

What about owning a condo?

>>16931369
>I could afford to buy a house
You can't, you're browing funds, don't lie to your self mutt
It all depends on you, do you want to give your freedom, & a massive portion of your pay check to the kikes?
What do you do with your capital? Do you buy worthless shit & the only 'investment' you'll ever make is a house, hen sure 'buy' a house. WAY to many view a house as an asset but don't see it correctly, as a liability.
Homework - Open an excel sheet put your deposit into it then use the S&P500 for the last 30 years
>>16933063
Anyone that says this can't use excel!
It all depends on what you do with your money.
>Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.
― Albert Einstein
You sound like someone that doesn't understand it

>>16933121
>Buying a house is always better

>>16933124
side note
if buying/owning is better
why is someone selling ?

>>16933121
>Anyone that says this can't use excel!

What that buying a house is better? Financially it is a better decision if you buy at the right time, Which as I've stated now is not the time. Don't even quote that jew. You fags are going to get btfod so hard buying assets right now instead of savings funds including gold,silver and crypto for what's to come. Yea make what little profit you can off the pumps happening right now, It will be nothing compared to waiting and buying low. Buy low, sell high. We are not supposed to be buying right now as the price too high.

>>16933136
Because uhhhhh

>>16933136
because they're buying a bigger/better house

>>16933152
you can't be that stupid

>>16931369
if you own a business and work from home buying a house can be a good deal

if you plan on living where you're at for more than 10 years buying a house can be a good deal

if you make enough money to itemize your taxes buying a house can be a good deal.

if you make too much money and need the lower capital gains tax rate for a shelter, buying a house can be a good idea

if you build and maintain houses professionally, buying a house can be a good deal.

if your neighbor has to move suddenly and sells very low, buying a house can be a good deal.

if you're raising a family on a steady income, buying a house can be a good deal.

If none of these situations fit you then renting is probably the better way to go because realtor fees, mortgage costs, maintenance, and taxes are very real and fairly large expenses that renters don't usually have to deal with as much. Also you're paying for a lot of living space and probably land you don't strictly need.

>>16933138
yeah, I bought my current house at the beginning of 2012, it's appreciated about $28,570 per year since then. Bought for $107,000 and it's worth around $280,000 now. I want to sell it in Summer, buy an RV and travel around looking for a little plot of land out West where I can build something cozy

>>16933227
>anon buys a good cheap house after the market crash that no one believed was going to happen

>>16933121
meanwhile this fag buts in
>b-but you c-can't just buy a house at the absolute bottom.
>YOU HAVE TO BUY A HOUSE RIGHT NOW WE ARE NEVER GOING TO HAVE AN ECONOMIC CRASH!!11!!

>>16933227
Is it just you? Do you have any family or any big/large quantity of possessions you cant live without? You could make a cottage of like 600sqft or maybe less, building costs would be pretty cheap, ac is cheap. Even though it's kind of a meme, tiny homes can be pretty neat.

>>16931369
Unless you are absolutely loaded and buying something in a swank neighborhood in a few select global cities like London, NYC etc house prices are hideously inflated because the boomers owning them are still living in la la land and haven't realized that their McMansion in the suburbs of Boise is worth only a fraction of what they think it is

Once the boomer mass die-off starts and they realize they don't have much more time to waste their childrens' inheritance on cruises and such the rush for the door will happen as they dump real estate for more liquid assets like stocks (where part 2 of the fleecing of financially illiterate boomers begins, stock prices have been hideously inflated through buy-backs etc precisely in anticipation of this so billionaires, insiders and board members can dump on the boomers) and prices will crater

As I said this doesn't count for fancy places in hot cities because there will always be some Arab sheikh, Russian oligarch or Chinese money launderer willing to pay anything. As for the rest, wait until the boomercaust

>>16931606
Based.
I kek at home owners everytime.

>>16931606
that's assuming you have a mortgage and and down payment. For the average person a house is comically expensive but for a millionaire or someone wealthy a house especially land is cheaper than an apartment or is the same price if you don't have to pay a mortgage.

Might be looking into buying a house in the near future, about two years. Should I opt for an appartment for a while first? Combined income should be around 60k by that time. Looking to get something on the small side in Florida for around 100kish, probably will have around 25-30k down.

>>16931606
>If you have literally any ability to make money on your money, 10% a year is bare minimum in the current market, and I'd say 20% is more realistic
How do you make 20% safely?

>>16933248
It's just me for now, 3 bedrooms, 2 bathrooms, 1800 square feet, huge garage. I think I'd need at least 1200sq ft to be happy. Maybe a barn with living space upstairs?

>>16933450
That's a sizable house for just one guy. I dont blame you for wanting out.

>>16933244
To whomever is paying attention, wait for the next readjustment. I did. I got lucky and found the right place, 2 partnered investors were splitting up a rental and one wanted liquidity. I had been looking for 6 months and saw that people were beginning to pay over the asking price for decent places in the right location. I offered $7500 above list and beat out 2 other offers, I guess at $2500-$5000 over? Who knows.

In a deep recession like some people are expecting soonish the price of rent will go down/become more negotiable as renters walk away/move in with mom & dad. When no one is helping the landlord pay the mortgage....

>>16933121
>Homework - Open an excel sheet put your deposit into it then use the S&P500 for the last 30 years
Delete this now

>>16933265
Boomercaust when?

>>16933136
>downsizing
>moving to another city
>upgrading
all valid

>>16933464
Yeah, it's more difficult to find decent roommates than you'd think! Plus, I'm wary of burners and on the wrong side of town for college kids. I've got no social life here, don't really like the place or the majority of people or the local government. I do have business connections, though, and that's what makes it difficult to leave.

>>16931606
If the house cost me less per month than if i would have bought tit, how is worth to the owner?

>>16933185
This nigga gets it

>>16933244
housing prices are typically not affected by a recession at all if you're living in an area with real value
>recession hits
>joe bob in coal town house go down
>max steeler in a tech hub house go up
simple as that, everyone knows the population of the world is going up, it's slowing, but it's still going up. if population goes up, housing prices goes up.
unironically, historically, essentially the best time to buy a house is effectively ever save 2007/8

>>16934368
https://www.curbed.com/2019/1/10/18139601/recession-impact-housing-market-interest-rates
>It’s somewhat counter-intuitive, but recessions don’t necessarily mean bad things for the housing market. In fact, they usually don’t.
This is just the first article that came up on Google. Also, from a pure interest rate point of view buying now is fucking scary smart if you have the money.
>if you have the money
I see a lot of poorcope.