Home Buying in Mountain View>Question Details

Swanny.rusli, Home Buyer in Mountain View, CA

Is it better to rent or buy apt if probably for 5 year time. Rental maybe aroung $2000, buy maybe around $400,000? Thanks

Asked by Swanny.rusli, Mountain View, CA Sat Nov 23, 2013

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8
Hi Swanny,

Trulia just recently released a new on-line Rent vs Buy Calculator that might be of interest to you.
http://www.trulia.com/rent_vs_buy/

No matter what the calculator generates, I would advise you sit down with a tax professional to review your findings and personal financial situation.

Given you are looking to possibly buy you might also may want to review this blog:

"The Top 4 Challenges Buyers & Sellers will face in 2014!”
http://tinyurl.com/lg2n2v5

-Steve
2 votes Thank Flag Link Sat Nov 23, 2013
Thank you for the info.
Flag Sat Nov 23, 2013
Five years is a little on the short side of the break even point. Normally 6-7 years is about how long it takes for the cost of ownership to fall below renting, but there are many assumptions in that number.

An important part of your decision should be, would you have to sell the home after five years or could you rent it out? If you look at my chart at http://julianalee.com/reinfo/mortgage.htm you can see that a $500k loan at 3% interest will build up about $55,000 of equity in five years. If the property appreciates, you would have more equity. There are also tax benefits which reduce the net cost of buying a home. My web page also has a link to the Freddie Mac rent vs. buy calculator so you can see the affects of different numbers.

By buying now, part of your mortgage payment acts like a forced savings plan, causing you to build up your wealth. If you don't buy would you spend that money or would you save it? At the end of five years you could be in a much better position to buy a home you like more.

Juliana Lee
Top 2 agent nationwide at Keller Williams Realty, the nations largest
Cell 650.857.1000
juliana@silicon-valley-homes-for-sale.com

Over 20 years experience
Over 1,000 homes sold in Santa Clara County and San Mateo County
.
Web Reference: http://julianalee.com
1 vote Thank Flag Link Sun Nov 24, 2013
And better buy under personal name or LLC? Is it still posible to buy under LLC and get morgage loan ? Thanks
Flag Wed Dec 4, 2013
Thank you for the input.
Flag Sun Nov 24, 2013
One benefit of buying a condo at $400,000 is that at the end of 5 years if you do not need to sell to get your equity out you can convert to a rental property and eventually pay it off and make money on the property. It is a wonderful retirement planning vehicle.

Marcy Moyer
Keller Williams Realty Palo Alto
marcy@marcymoyer.com
Cal BRE 01191194
650-619-9285
Web Reference: http://www.marcymoyer.com
1 vote Thank Flag Link Sat Nov 23, 2013
Buy while interest rates are low. There are a lot of factors other than price that can make a home purchase profitable.

J.R. Thrasher
http://www.SanDiegoRealEstateVeterans.com
619-929-0105
0 votes Thank Flag Link Mon Nov 25, 2013
Thanks
Flag Mon Nov 25, 2013
It is always cheaper to buy then to rent because you cut out paying someone else's profit.

Alex Greer
Loan Officer
NMLS #1056079
http://www.TheMortgageOutlet.com

408-352-5147
AGreer@TheMortgageOutlet.com
0 votes Thank Flag Link Sun Nov 24, 2013
It depends on too many factors to give you a definite answer. There are tax benefits to owning a home, but there are additional expenses too. Owning a home should allow you to build equity but the equity growth depends on the location of your property, property type and general economic situation in the country and in the region.
Web Reference: http://talisrealestate.com
0 votes Thank Flag Link Sat Nov 23, 2013
It depends on a few things. Usually, it works out better to buy because of tax benefits, and equity appreciation.

If you continue to rent at the end of 5 years you have paid your landlords mortgage to the tune of $120,000. If you are buying you will paying into your own savings account and in 5 years sell, or lease out the property.

It only makes sense to buy if you can afford it. If you can't afford the payments on the purchase, then continue to rent. But, I would hate to give someone other than myself $120,000.
0 votes Thank Flag Link Sat Nov 23, 2013
Thanks
Flag Sat Nov 23, 2013
That's an easy one: BUY! It nets cheaper per month, you enjoy appreciation, tax benefits, and best of all own in one of the country (if not worlds) hottest real estate locations!
0 votes Thank Flag Link Sat Nov 23, 2013
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