Obviously renting is not "solely" throwing money away; no one is arguing that. You get housing in return for your rent.I have loved, loved, LOVED the tremendous amounts of dumb luck that comes my way, and will keep arms open for more that is coming! With housing, the choices made along the way were purposeful, considering arguments on the pro/con sides. This lived experience has shown renting is not solely throwing money away, helped shape housing costs to income appropriately at different life stages, contributed to a comfortable approach to buying a home, and protection against employment risks. Once the long term plan for location for housing is defined, which will take time, then buying a house can be decided upon.
After deducting the cost of improvements, the value of the home has increased by about $400-500k in 5 years, over which time I've spent ~$60k on interest, which is 100% deductible against state and federal income taxes equaling about 30%, so say generously $40k total over 5 years or ~$675/mo or <10% of appreciation. My property taxes also fall under the SALT cap but not sure how that works with state income tax, so assume not deductible.How does interest paid on the home fsctor into the doubling of its price? I have been considering the insurance, taxes, interest and maintenance like an expense ratio. Though a single home is much less diversified.
My mortgage payment is the only expense that hasn't radically increased over the last five years, given inflation. There's huge value to that predictability. As for lumpy expenses, I just autosave $500/mo to a sinking fund and have pretty quickly amassed an amount that could comfortably cover any major maintenance or repair expense that I can conceive of. Not so lumpy.
Statistics: Posted by ETK517 — Mon Dec 09, 2024 7:50 am — Replies 567 — Views 40868