I get that this is absolutely going to come off like a (not so) humble brag, however I have gotten into debates with my buddies in real estate on this topic and want other perspectives. I have decided that renting is the right choice for me and my family. <whew> I welcome anyone to poke holes in my theory (that's actually why I'm here). We live in Orange County, California and rent a single family house for $2,150 in a relatively nice/high cost area. Purchasing this or a similar property would cost nominally $800,000 but for some reason our landlord just doesn't raise the rent (6 years, no change). Comparable mortgage/insurance/PTax would be roughly $4K/Mo. We are spoiled and are not interested in moving to a different neighborhood where our mortgage would be closer to what we pay in rent as our "quality of life" would drop drastically. I currently invest more than the difference (rent vs. comparable mortgage) I would be paying into a number of different accounts. My reasoning for not buying would be that a house of comparable quality of life would significantly reduce my ability to invest (in retirement, 529 and index funds). If real estate value grows (on average) nearly equivalent to inflation, why would I redirect funds to a, generally, lesser earning/growing portfolio (real estate) especially when there is noise of an impending (albeit lesser) housing crisis?
- Equivalent to 30% of my Gross Base Pay value deposited into retirement accounts (Max 401K + Match, Max IRA, Employer Funded Pension)
- 529 Plan (Child education) deposit on target for full tuition funding
- Max HSA Contribution
- Fully Funded Emergency Savings (Conservatively Betterment Invested) of 7 Months
- No Debt (School/Credit Card)
- 1 Car Loan (~2.9% APR/$9K balance)
- Liquid cash ~ $25,000 (Checking/Working Savings Account)
- Index Fund Investments (where all additional income is funneled)
edit: I'm in my mid 30s
WHY SHOULD I BUY??
Submitted March 13, 2018 at 01:02AM by ForTheDelicateIssues http://ift.tt/2Hw26Sz
