Comments on: Addressing the Rent vs. Buy Conundrum

By: Portland Oregon Real Estate Guy

Portland Oregon Real Estate Guy — Tue, 18 Dec 2007 08:22:56 +0000

It always makes sense to buy, if you can get it at the right price. Most people are scared to buy, so the inventory is high. But the investors are really ripping into the short sale market right now. Imagine if you can buy a home at 75% loan to value. Different market different opportunity.

By: Uncle Git

Uncle Git — Thu, 11 Oct 2007 20:47:25 +0000

Your example of 7% a year going forward isn’t going to happen.

The reality is house prices are now dropping from the biggest financing bubble we’ve ever seen – you’d be safer assuming 0% for the next 10-15 years to account for the fall and inflation eroding that fall away to get back to today’s prices.

Fact of the matter is it just doesn’t make sense to buy in Portland today – end of story.

By: Alex

Alex — Mon, 01 Oct 2007 03:45:10 +0000

Rent has gone up and will go up again. The vacancy rate is really low right now.

By: The Odysseus Medal competition — The long list | BloodhoundBlog: Real estate marketing and technology blog | Realtors and real estate, mortgages, lending, investments

Sun, 30 Sep 2007 19:08:48 +0000

[...] RealUmbrella, Creating the Ultimate Real Estate DisintermediatorRon Ares — Rent vs buy, Addressing the Rent vs. Buy ConundrumSteve Leung — Hidden factors, Hidden Factors When Calculating a Home’s ValueKevin Boer [...]

By: Paul

Paul — Tue, 25 Sep 2007 05:52:02 +0000

The NYTimes model is strongly effected by the return on investments rate. Presuming the discount you receive from renting were placed in an aggressively managed account – even index mutual funds – the benefit of owning is diminished. The NYTimes default return is 5% – but over a 30 year period one can do much better. This opportunity cost should be the driving factor in this sort of investment.

Another interesting issue is that today’s federal tax rates are some of the lowest in history – so the power of deducting mortgage interest are minimized. If taxes come up then the benefit for purchasing will come back to the entry level buyer who today is likely not paying much in taxes. (Of course the wealthiest groups have seen a slow increase, and more and more are hit by AMT…. But thats another story.)