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no more itemizing

January 12th, 2025 at 08:26 pm

The bank uploaded their 1099 for 2024.  We paid $15682 in mortgage interest last year.  That works out to renting out place at $1306.83/month.  Of course our property taxes were $13014 for the year. I paid $1409 for the year.  All in all to rent our house monthly?  $2508.75/month.  Pretty sweet.  We are currently paying $1836/month in principal so our payment is hefty but that's an enforced savings of almost $2k/month to live in our house.  

When we moved in 2015 we were renting our first ever single family home at that time I believe for $2500/month.  That was less than the PITI on our old condo which was $2250/month plus HOA!  Of course that included principal so not a fair comparison.  It broke down to $851 interest/month + $545/month taxes = $1396 interest and property taxes.  Then add in HOA and insurance I believe we were at $250/month HOA and $25/month insurance $1671/month rent.  But with principal we were paying more than renting.

But our prior placed we lived from 2005-2015.  Our current place we moved in 2017 and are still here.  We now pay too little in mortgage interest to itemize.  

But I want to point out to people who say renting in HCOLA have obviously never really broken down the numbers.  I guarantee you that there is no way they ever do the actual math.  Why?  Mostly because when you are renting you need to be saving the difference in payment and investing it.  You also need to be saving more to get the down payment along with not building appreciation.

The rental we had in 2015-2017?  Now rents 10 years later for $4000/month. I checked on zillow and saw a house for rent listed currently.  So I would be renting now for $1500/more than I renting my house for.  To rent my house which is in a better location than where I rented?  I rented in a good neighborhood to save money, but location was lower tier.  We picked A tier to buy because we wanted the shortest commute possible.  To me that's how you compromise.  Rent less and buy best.  To rent my house now?  Rental in our neighborhood for the size of home (smallest) is $5k.  Most are starting at $7k -$10k because the homes are larger.  

I plan on teaching the kids, buy as soon as you are stable.  I hope to help them in fact and perhaps even encourage buying a 2 bed and renting out a room. Housing is a hedge against inflation.  But something people fail to realize is that as you get older and pay off your home the amount of money needed to live there will be our property taxes, insurance, and maintenance.  To be paying $5k/month or $60k/year rent right now for our house means in the 8 years since we've bought the renter should have been saving the difference and invested it to pay for the increased cost they will be paying moving forward.  

And this is for a home on the west coast.  I can't imagine that in cheaper places it makes sense to rent forever.

7 Responses to “no more itemizing”

  1. rob62521 Says:
    1736723871

    Home ownership is truly a good investment if one doesn't get in over one's head and is house poor. The way you have accomplished it was very wise.

  2. Lots of ideas Says:
    1736731440

    100% agree that as long as you are planning to stay in one place for several years buying a home is the best housing option.
    Live as frugally as possible, work as much as possible to save up a down payment.
    Understand the pluses and minuses of condos or learn how to do renovations like painting, tiling, basic carpentry to help build equity quickly.
    Watch mortgage rates and refinance - without taking cash out - when they drop.
    Gr from 30 to 20 or 15 year when you can afford it.

    At 68, I am thinking of selling and renting to have a landlord to call. But what I will take out of my house, invested, will pay my rent…

  3. mumof2 Says:
    1736736068

    That would work over there but not where I live, we pay over $33,000 a year in rent on top of that we need to save for a deposit which is around $45,000 (5%) plus upfront fees of around $70,000 and that is just to get in a decent home in a decent (not great) neighborhood...and you still have 95% of your house to pay off

    so paying rent and saving up while also trying to live and pay off debt can be really hard here...buying a house over there is so much easier and you get more for your money

  4. LivingAlmostLarge Says:
    1737050856

    Mum, what are you renting? I paid $30k/year in 2015 for rent. It is very difficult to get ahead. So the rent in that same home in 2024 is more like $4k/month or $48k so substantially more than what you're paying.

    That's my point that renting is very difficult to get ahead. If you are going to stay in the area you probably need to get into something, but people don't want to move further out, they don't want a smaller space than renting. Buying a 1 bd instead of a 2 bedroom rental. Buying a condo instead of a home they rent.

    Often times that's what sinks people. Being unwilling to move out of their "neighborhood" that they can't afford to buy.

  5. mumof2 Says:
    1737418268

    LAL this neighborhood is okay but not the greatest either and we are paying one of the cheaper rents...problem most of us face is over there you would need a deposit of a certain amount...here you need that which is around $20,000 plus (this is on low side) plus all the fees up front which are around $40,000 -$70,000 upfront thats the hard part...most houses in our city are minimum $800,000 for a basic house, all our doctors are in this neighborhood and no point paying for a long commute with the price of gas, also I can't drive due to my dizziness and my hubby has macular degeneration so if we did move we would have to rely on her to get places, we have costed it all out...also in 2015 we were paying a 1/3 of the rent we are paying now and for a better home...but can't do much about that now

  6. LivingAlmostLarge Says:
    1737659553

    Why are you in a neighborhood of all doctors? Are you a doctor? I ask most seriously. I would say that it's maybe just out of reach. I get the macular degeneration trust me I really, really do. Read my past posts.

    What is the job situation? Does it make sense to switch? Does it make sense to live on a bus line and just suck up the long hours? Is it everyday that your husband has to go in? Is it 1x or 3x a week? Is there a way to get a remote only job?

    So to buy a house in the US in HCOLA you are looking easily at $200k down. 20%. Many people can't do it. So they only have 10% down and PMI and they have closing costs rolled in. Our current place we threw down the 20% on $1.15M. That came from our previous house which was $575k and we put 20% down there. That down payment came from our first condo which we put down $15k and had $5k in closing costs.

    Fortunately we had scrimped everything together, DH had worked and we lived on rice and beans for months. At that time we were making $50k combined gross income. $20k DH and $30k me. Our mortgage was $700 plus HOA $200 plus insurance and taxes $200. We banked on the appreciation to help us and it did. We were paying about 25% of our income gross combined in CA.

    Then our second place same thing. Currently we are at 25% and it's pretty comfortable but our income is larger. I recall the days of when our rent (LA $795 + Mortgage PITI $1100) on $40k gross income was awful. We literally spent nothing but gas, food, and rent. Our income worked out to $8/hr in 2002 and we worked way more as grad students than 40 hours.

    My thought is that when you rent, you should rent the absolute worst and minimum place you can for the least amount you can. renting somewhere "tolerable" makes it harder to save. Doing crazy stuff like renting a 2 bd house or 3 bedroom house and renting out a room might help. Combining incomes with your daughter. Look for remote work or paycut where you can move cheaper. Think outside the box is always my motto.

  7. PatientSaver Says:
    1738591078

    Trust me, buying a home in the US is not any easier and there is a widespread housing shortage so you have to act very quickly to buy the house you want.

    Where I live in New England, the average price for a single family home is $406,000. I can't imagine how young people can do it unless they have substantial help from family.

    In comparison, when I bought my home 30 years ago, which at 1650 square feet is considered "small" by today's standards, I paid $209,900 for it, and it's 95 years old.

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