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movingtobay2019 t1_iw1dt14 wrote

Reply to comment by MarbleFox_ in New York City Is Failing Tenants. So They’re Getting Organized by ethnt

Claiming a home accumulates wealth even if it never appreciates is like saying your wealth goes up in a savings account that pays 0 interest and charges you $1k a month in fees.

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MarbleFox_ t1_iw1l01v wrote

If you spend $2k/m for 30 years on a mortgage that doesn’t appreciate you’ll still be left with a house worth about $300k, likewise if you pay $2k/m for 30 years on rent you’ll be left with absolutely nothing.

Which scenario represents more accumulation of wealth?

  1. Spending $720k over 30 years to own nothing

  2. Spending $720k over 30 years to own a $300k home.

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movingtobay2019 t1_iw1m13y wrote

You will be spending more on the mortgage. There is no scenario where your mortgage and rent is the same for a similar unit in the same neighborhood in NYC unless you put an obscene amount of money down (money people don't have), especially with today's interest rates. On a 30 year mortgage with 20% down, your interest payments will exceed your loan with today's rates.

Add in taxes, HOA fees, maintenance, and buying/selling costs.

But that's besides the point because you aren't going to get anyone to invest capital to build the $400M apartment building in the first place.

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NetQuarterLatte t1_iw2et86 wrote

That’s where I think the path for homeownership should be easier.

Coming up with the down payment, negotiating a lower interest rate, and doing it in bulk (many homeowners at the same time, many building maintenances at the same time, etc) is something that maybe only a government can help organize (organize, not run).

But you know, some people think it’s just better to chain those tenants to a lease for life.

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MarbleFox_ t1_iw2iyrh wrote

Who said anything about a similar unit in the same neighborhood? I’m talking about a similar budget.

If you’ve got $2k/m in your budget for housing, you’ll be building more wealth by buying something within that budget rather than renting even if the house doesn’t appreciate in value.

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