What's NOT bugging you? (2020s edition)

[LouisEly]

18 minutes ago, CheezWizHed said:

I've also refinanced 2x when rates drop, so you aren't locked into your current loan rate. So even if you start higher (my first loan was ~6%), you can drop down (my current refi was in 2021 with a 2.25%). 

As I mentioned, one of the exceptions is if you get a very low interest rate.  I'm not holding my breath that interest rates will get under 5%, much less down to 3%, any time soon, if ever again.

 

19 minutes ago, CheezWizHed said:

Early in my home ownership, renting cost about the same as my mortgage.  Now a house rental in my area is 3x my mortgage for about the same house but without the 4 acres of land I own.

What most people don't do, which Nerd Wallet does, is calculate opportunity cost.  You can input your rate of return, and it calculates the long-term value of that.  If you have to put $200K down on a house now (much less the cost of repairs and maintenance).... in a S&P 500 fund that could easily double in 7 years, quadruple in 14 years, 8x in 21 years.  But real estate only appreciates on average 3%, so it takes ~23 years for real estate to double.

And I'm not the only one I know who has gotten in a lawsuit with a neighbor.  Then things can get expensive.

 

23 minutes ago, CheezWizHed said:

Also, do you expect to die at 65?  You will need a place to live then too! 

I expect to be very retired then, and my living needs and location might change.  But looking at the Nerd Wallet graph, 13 years is about the max profit on a home.  After that, repairs and maintenance really start to go up.

[CheezWizHed]

3 hours ago, LouisEly said:

As I mentioned, one of the exceptions is if you get a very low interest rate.  I'm not holding my breath that interest rates will get under 5%, much less down to 3%, any time soon, if ever again.

 

What most people don't do, which Nerd Wallet does, is calculate opportunity cost.  You can input your rate of return, and it calculates the long-term value of that.  If you have to put $200K down on a house now (much less the cost of repairs and maintenance).... in a S&P 500 fund that could easily double in 7 years, quadruple in 14 years, 8x in 21 years.  But real estate only appreciates on average 3%, so it takes ~23 years for real estate to double.

 

So $200k down is about exactly what I did for my last house - about half.  An equivalent house to rent is about $3k/month compared to my $1k/month mortgage.  Thus $2k/month savings - about 12% APR of my $200k investment or the typical S&P average.  That disparity will only increase since my mortgage is fixed... and rent won't be.  

When I originally put $10k down on my first $90k house, rent was about the same as my mortgage ($400/month).  But then $10k doesn't make much/year either.  It's more about keeping your mortgage payment under your rent. That doesn't happen initially... but happens in the long term. 

Plus, my $400k house is currently worth $800k after 9 years.  I do tend to buy houses that need some love and use sweat equity to improve them.

Nerdwallet has nothing on me... 😉

[zurch1818]

Since my mortgage has been paid off, I think my situation breaks the calculator. No matter the numbers I put in, it tells me that renting can save me $0/month.

My property taxes alone cost me $830/month and utilities/insurance are probably another $400/month. I have no idea what my house would rent for...but I'm sure the payment wouldn't fit in my monthly budget. Paying off the house has made it so easy to just cash flow anything. I'm guessing the calculator is not accounting for this.

[LouisEly]

On 7/8/2026 at 7:09 AM, zurch1818 said:

Since my mortgage has been paid off, I think my situation breaks the calculator. No matter the numbers I put in, it tells me that renting can save me $0/month.

My property taxes alone cost me $830/month and utilities/insurance are probably another $400/month. I have no idea what my house would rent for...but I'm sure the payment wouldn't fit in my monthly budget. Paying off the house has made it so easy to just cash flow anything. I'm guessing the calculator is not accounting for this.

How much extra up front and in each monthly payment did you have to make, and what is the opportunity cost of that if it had been invested in the market?  That's what most people don't account for. 

Also, the calculator factors in selling the house at some point in the future (~6% closing costs/realtor fees; on a $600K house, that's $36K giving back, plus potentially capital gains taxes of 15%, so could lose over 20% of the value when selling).  One of the exceptions I listed is if you can stay in the house for a long time where you no longer have a payment... but few people are able to do that.  You don't make money or lose money on any asset until you sell it.

Also, how much are you spending on maintenance, repairs, appliances, painting, remodeling, etc., that you would not pay for if you were renting?

Regarding rent, you have to base it on rent at the time you purchased the home.  As a landlord myself, I can tell you that most landlords know that when they have a really good tenant, they will not raise the rent significantly.  Tenant turnover usually costs more money than lost rent (paint, flooring, every little repair before you can even show the place, and increases the risk that a bad tenant who will stiff you for rent/damage the place/result in legal fees, etc., will come in).