Thursday, July 14, 2005

Rent Don't Buy

If this Long Branch two bedroom condo is available for $550k, why would I want to pay $609.5k for this Long Branch two bedroom condo in the same development. Especially if I can rent the same type unit in the same development for $2,400 per month.

Lets see. If I take out a $500K mortgage at 5.5% for 30 years, my monthly mortgage cost will be $2,839 per month. Then I add $1000 per month for taxes and $400 per month for maintenance and my monthly nut is $4,239 before any tax benifits. Assuming a 25% tax rate, my monthly cost is reduced to $3,415, which is still $1000 more than it costs to rent. I think I would take the rental before buying.


Anonymous Anonymous said...

Nice job on pointing up out of wack purchase prices. I can't see how anyone can make it clearer than that.

Friday, July 15, 2005 1:34:00 PM  

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