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Comment by Retric | Hacker News Reader

Where I live the choice is renting for 1600/month or 'buying' a similar play for 300k + Appliances with a 800$/mo amenity fee AND property taxes AND Maintenance.

The only way buying works out is if there is some greater fool out there willing to play the sucker in a few years.

PS: Looks like 150$ of that amenity fee is a special assessment for the next 8 years. But, new condo's are notorious for artificially lowering condo fees for a few years and then bumping things when they need to fix something major.

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Where I live (very large US city) buying actually works out better than renting IF you can afford a substantial down payment, which I imagine most millennials can not. My wife and I ('88-'89 born millennials) were able to and are saving money every month on the bottom line while living in a condo larger and nicer than our previous apartment.

Given the generally anemic savings and salaries/wages of most millennials, I think being able to qualify for a good mortgage is a major hurdle.

800 bucks a month or a year?

300k place with 20% down should be about $1500 a month ($1600 a month at 10%) for mortgage + property taxes.

Am I missing something?

$800/mo for an HOA fee is crazy. I recently purchased a condo for $330k at 20% down and I'm saving $200/mo over renting a smaller place.

Agreed thats why it should make sense to buy.

What about the opportunity cost of the $66,000 you put down? You could likely earn more than $200/mo pretty easily with $66,000 in cash to utilize. It is too simplistic to say you are saving $200/mo just because the monthly P&I payment is $200 less than a rent payment. That doesn't take into account what you could have done with the cash, property tax, maintenance, etc... Of course the big unknown is the future value of the property, which makes this very difficult to calculate accurately.

I've looked at this several times and renting typically comes out on top for me. I still decided to own though because I couldn't find what I wanted to rent and I care more about where I live than making sure it is the smartest purchase I can make.

"You could likely earn more than $200/mo pretty easily with $66,000 in cash to utilize"

How? That's more than a 3% return.

Long term the S&P 500 has an annualized return between 6 and 7%, after adjusting for inflation.

Good luck paying a $200/mo bill with an S&P indexed investment, though.

I can easily make 10-15% a year on my money investing, so that $66k downpayment actually means I would lose $6.6k-9.9k in annual income.

How do you make an easy 10 to 15%?

Stocks, bonds, currencies, property, alternative assets (i.e. acquire a profitable something, invest in passive income assets such as solar energy SPVs, music royalties, etc)

It still takes a time investment to achieve that. There's no free lunch.

> There's no free lunch.

Indeed. It's not at all easy to make 10%+ on a recurring basis.

If I could easily make 10-15% a year investing on top of my job, I'd do that. Maybe I'm just not as gifted as you.

Sorry, you're right. It's impossible to do - my bad. Ask any wealthy person (who enjoys finance) how they don't achieve those gains.

I don't know why you think I insinuated it was impossible. I'm not a wealthy person who enjoys finance so it's reasonable that I would not expect to see gains like that.

"Easily make 10-15% a year" .... until the market corrects and you lose 50%.

I said easily, I didn't say risk free. I also didn't say put everything in stocks. Stocks are extremely overpriced at the moment, and only a small of my portfolio are in them. Investing is a hobby I spend some time on each week.

I'm just pointing out that you should calculate the gain you could personally make from your capital and account for that in your decision.

Part of that equation is the time and knowledge required to invest that successfully, which not everyone has whether the time, the knowledge, or the time to acquire the knowledge.

Is the $800 amenity fee monthly? If not, you're probably better off buying (see http://nyti.ms/1han05C ; plug $300k in for the "price of home")

Yea per month, plugging in numbers I could including a lower property tax rate buying is a bad deal with that calculator even if you stay 15 years before moving and investment returns stay at the inflation rate.

I would be buying a home (or two) if 300k was the price tag.

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