Author Topic: Would like some help figuring out a rent vs. buy?  (Read 390 times)

fizzgig

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Would like some help figuring out a rent vs. buy?
« on: July 22, 2019, 12:13:26 PM »
Right now I split my rent with longtime GF: I pay 940 per month for my half. I don't pay heat, cable, or electric.
However, if we were to buy a house around me in NJ all the closing costs and down payment would have to be paid by me alone, let's say 75K. I currently put away between 1500-2000 a month into index funds. If we bought a small house with a 30 yr mortgage for around 270K, the cost seems similar to what we pay in rent right now, around 1700. I'm factoring heat, taxes and some maintenance costs in that number as well but I'm not sure what public water, sewer and trash will cost yet. I would probably plan to live in the house for about 12 years.
It's the down payment and closing costs that make me hesitate. Does it sound worth it to take out 75K out of my index funds ( I have a total of 235K) to shell out about 7 years worth of my half of the rent for a down payment and closing?

tawyer

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Re: Would like some help figuring out a rent vs. buy?
« Reply #1 on: July 23, 2019, 03:33:29 PM »
I have gone through this exercise a few times myself, using various online calculators and developing my own. It's complicated, and I recommend the NYT rent-vs-buy calculator: https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html

mozar

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Re: Would like some help figuring out a rent vs. buy?
« Reply #2 on: July 23, 2019, 10:39:49 PM »
What's going to happen in 12 years? If I were you I wouldn't buy a house, just because it sounds like you don't want to.

six-car-habit

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Re: Would like some help figuring out a rent vs. buy?
« Reply #3 on: July 23, 2019, 11:04:12 PM »
 Do you not pay heat ,cable, or electric because they are currently included in the rent ? Do you also not pay water or sewer or trash currently ? Is this an apartment you are in ?

 If its a duplex or part of a single family home [ basement / MIL suite ] all the "freebies" above sounds like a nice deal.
 
 Do you want your own yard ?

 I wouldn't pull money out of index funds that are already invested. More likely to look for a house under a VA / FHA / county-city low down payment scheme.

 Big question though is, I realize she is long time GF , but who will get to keep the house in the unlikley event you split up ?  It happens .....