我在矽谷月租$2400,要買房嗎?

有個客人寫信給我,他告訴我,他跟太太現在房租2400,想買間40萬元的小Condo,我應該下手嗎?

答案絕對是肯定的,讓我們看看我回信的內容。

Q:Should I buy a house for 400K or rent a apt for 2400/month?

Since your rent is pretty high, I will suggest that you just buy a condo.
I believe you did some math already.

Let’s compare renting an apt for $2400 vs. buying a 400K condo.

If you buy a 400K house with 320K, 30 fixed rate 3.75% mortgage.
Mortgage monthly payment is $1481
Property tax:$416 /month
HOA: $250~300/month
Insurance: $20/month
1481+416+300+20=2217/month

From the above, it’s already cheaper than what you are paying per month for rent, but it requires that you have a $80K down payment available.

Mortgage interest and property tax are tax deductible:
The first 48 month, mortgage interest accrues to $46,216.  Property Tax (assuming 2.5% annual increase) is around $20762.  The tax break is roughly $23K (assuming 35% tax rate).

With that said, 48 months of living in your condo will cost you:
$46216 (interest) + $20762 (property tax) – $23000 (tax break) + $12000 (HOA) + $960 (insurance) ~ $57K.

If you can get 5% annual return on your $80K down payment (if you had invested it rather than buying a house), the “cost” there is $17.2K.

So, the total cost is $74.2K.  That’s still significantly less than $115K that you paid in rent over the same period.  When you sell the house, there’s ~5% commission, which is $20K (at $400K sale price, assuming no gain).  Your total cost is $94K assuming a flat house price.  You can easily add or subtract from that number based on your forecast.

Therefore, I know you probably will choose to buy a condo than paying rent.

 

Ever case is unique, I can calculate for you.

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