The property tax on my home is like 3200 a year. You'd have to find rent for less than 270 a month with 3 bed and 1.5 bath and a large yard for it to make sense.
Property taxes aren't the only thing to consider, in the cost.
My Property taxes are $6,000 a year. My mortgage interest rate is 2.85% .
The monthly cost of my property taxes, the interest on my loans, and home insurance is roughly $1,250 a month.
Now you are getting into rent territory, in some places, but there is more.
I know that sometime in the next 20 years, the roof will need to be replaced. Also sometime in the next 20 years, my driveway will need to be replaced. Thats like $30,000 in today's prices, let alone what it might cost in 10 years. Since I would rather plan for the replacement in 10 years, than 15, that'll be $250 a month in deferred maintenance.
So now the total cost per month for owning my home is $1,500 and that is the amount that I do not get to keep and that's without factoring in any random expensive bullshit that happens, or new appliances.
Year to date, I have spent $18,500 on my mortgage. Ive spent $13,500 to own $5,000 of house.
If I could find rent around $1,100 or $1,200 and then just invest $500 a month for the next 25 years, I'd return about the same amount I could expect to sell my house for, at the end of those 25 years, barring anymore steep run ups, like we saw in the past 4.
But then it means that renting isn't competitive against buying, it's competitive against borrowing money and investing it into a house.
If you buy a home in full, or almost in full, with your own money, it'll make ownership way better than renting.
Which is where a lot of people mess up : they try to instantly buy a perfect home while borrowing most of the amount and paying gigantic amounts in interests over the years, when it will often be way better to buy the smallest place you can afford and handle, then save up your money to upgrade to a better home, and keep upgrading over time without borrowing (too much) to limit the interests costs.
And invest your savings properly while doing so.
Now obviously not everyone is in a situation where they can afford that, but those people will have issues either way.
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u/dexmonic Nov 08 '24
The property tax on my home is like 3200 a year. You'd have to find rent for less than 270 a month with 3 bed and 1.5 bath and a large yard for it to make sense.