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Re: VVP - Rent vs Buy Scenario
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Newbie
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think all posts have their own merits, ultimately there is macro and micro view - questions to ask:
macro: - what tax bracket your are in? where do you see nj state / us govt heading with mortgage interest deductions / income taxes? - are you willing to go long JC? Hudson County (in addition to Cook county, Chicago et al) is most corrupted in the country - taxes will go only up - See news tonite, last week. - what is your view of 3yrs+ inflation? - what is your view of JC ability to provide decent school system or JC being cheaper alternative for NYC / Brooklyn in coming years?
micro: - what is your personal preference - rent for maintenance free living or buy to build long term equity? - what is your time horizon - any calculator calls for 10+ yrs primary residence view. - if you have kids, are you ok to pay for schools post k1 (up until then schools ok (st bridgets, cordero all free and decent for pre k to k1)? - can you manage your money not tied up in downpayment well? in essence can you get better after tax return from your investing then from your after-mortgage deduction / mortgage payment return on downpayment? suggested nytimes calculator is decent place to check this. key is the assumptions you make on inflation and your after tax returns on cash you would get otherwise - do you think your work upside is so great that potential loss on buying can be offset with extra money earned in the future?
in the end, your emotional decision should count too, but do not put too much weight on it unless your # are clear to you...btw, in times like this, getting more spiritual and life-flexible (ie no mortgage-tie up) makes sense to many. that said, buying may make sense if you love JC / community and your long term view is that local area (NY/JC /NJ) is still worth the hassle of high living cost and your long term likes are here / your work upside tied to local area
lot of braindump here, but perhaps may help anyone interested in making this decision
Posted on: 2009/7/29 3:17
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