Rent or Buy? article and calculator

[Matthew]

http://www.nytimes.com/2014/05/22/upshot/rent-or-buy-the-math-is-changing.html?abt=0002&abg=1

The Times also created an online calculator that enables prospective buyers and renters to analyze their own decision. For example, for a typical person considering the purchase of a $500,000 house who expects to live there seven years, it might make more sense to rent if a similar place is available for $1,956 a month or less.

“A lot of these coastal markets look overvalued compared to rents,” said Mark Zandi, the chief economist at Moody’s Analytics. “In these markets, it seems generally more attractive to rent than to buy, even as the national market is broadly well balanced.”

It's neat. I plugged in some sample numbers and arrived at about the same conclusion I did a few months ago: I can get more for renting than buying, currently.

 

[fattony]

This is a good calculator, though some of the default settings are a little screwy. The default "investment return" is 4%. That should be double digits for anyone under the age of about 50. Your grandpa makes more than 4% on his bond fund.

For me and my numbers, I would need to stay put for over 5 years to make buying break-even with renting. And that assumes I wouldn't drop a bunch of money fixing up and renovating - which anything I can afford would need.

I'm in my current apartment less than a year and I plan to stay 2 or more years longer. But by that time I'll be mid-thirties and likely married and buying will finally make sense for me.

 

[Matthew]

Yeah I adjusted that one right away.

Another important one is the condo fee, which applies to most units in the city.