Again. This sounds like more of an income vs cost of living issue than a renting vs owning issue.
Shelter taking up more than half your take home income is a rough place to be. If that’s what you’re going through I hope you’re able to get into a better situation soon. Nothing much else to say, just the well wishes of a stranger on the Internet.
No because if I owned a home I would have equity. Spending 50% of your income on shelter is a lot easier to swallow if you’re getting equity out of the deal.
If you’re renting, you get fuck nothing, even though you’re still spending money.
Out of a 2k+ monthly payment, $400 goes towards paying down the principal.
You know how much equity I’d have after 1 year? Less than 5k.
You know how much closing costs would be if I sold? Up to 32-40k.
I’d need about 8 years of living in the house to build enough equity to just break even when selling
This is of course not factoring in a single expensive maintenance item. New roof, new sewer pipes, new HVAC, new water heater will run you ballpark of 50k in maintenance costs, and those are just the big ticket items. Throw those in, and you wouldn’t even break even moving after living somewhere for a decade.
If you’re young and still establishing your career, it’s better to have the ability to pursue better job opportunities across the country while renting. In my industry it’s common for folks to find new, higher paying jobs every 3-5 years. Based on my assumptions made, if I move before 8 years, I’d have paid more owning a home than renting due to closing costs.
EDIT: This also doesn’t factor in the closing costs you’ve paid as a buyer. I THINK mine were around 10k? I’ll have to check. Google says average rates are between 3-6% of the loan amount so 10k is probably right. So add another 1-2 years before breaking even.
This is all assuming the value of your home doesn’t change at all over time, which is an utterly retarded assumption.
The reality is if you bought at least 3 years ago, it’s likely the value of your home has doubled already, putting your equity equal to your debt, without even accounting for mortgage payments in the meantime.
Oh you might also be interested to know that less-than-5k figure is about equivalent to what I can save every year as a renter. Except that’s just my rainy day fund and it gets spent on extraneous costs and I hardly actually save anything at all.
So you’re sitting pretty over there, despite your whining.
