Rent vs Buy dilema - need input from those that went through it..
Hi everyone, been considering purchasing my fist home and the numbers just dont add up for me. So I was wondering if you guys could look over them and let me know if my math is right or wrong. Or perhaps I am missing something
Currently living in Orlando FL, paying 1400/mo for a townhome rental. Plan to be here for another 2-3 years and then probably have to move on to another location, due to job opportunities. So its good for us to be nimble...
Did some shopping for a house and found few that we liked, made some offers and ultimately were either too slow or didn't offer enough... so we didn't get them...
So I started doing some numbers... and came up with this.
We found 2 townhomes... few doors down from each other and pretty much same sqft. One is renting for 1600, the other is selling for 290k.
So to rent is simple... 1600x24mo = $38,400 total.
----------
To buy... here is my math.
290k purchase price.
20% down = 58k + 10k in closing costs.
monthly payment with principal, interest, tax comes out to about 1550.
monthly HOA is about 350/mo
1% for maintenance (heard thats a good rule.) so its another, lets say, 250/mo
To sell...
so lets say in a couple years we have to move and we sell it for 300k.
6% goes to agent = 18k
2% selling closing costs = 6k
interest paid per year will be about 8k a year, so 16k for 2 years.
Cost of ownership...
now the fun part...
So to own the house for the 2 years we would be paying.
10,000 in origination and closing fees to buy.
8,400 in HOA fees, over the 2 years
6,000 in maintenance and repairs, over the 2 years.
18,000 in interest (750/mo x 24), over the 2 yeas.
6,000 to close on the sale of the house.
---------
$48,400 - this is the money I will never see again (cost of owning the house for first 2 years).
$58,000 - I will have tied up in the house, in form of "equity"? :)
I really would like to "own" a home, I like the idea of it. I like the though of stability and doing whatever you want to it... but the numbers definitely kill the motivation :) Some would argue the aspect of appreciation, perhaps that would be true, but we dont know the future, so its kind of hard to say IMO.
Am I missing something?
TIA