Time bombs, hidden messages, unexpected dangers lurking around every corner and maybe things aren’t as they appear or are they? This is not a new James Bond movie, it’s what goes on in your mind when you’re trying to decided if it’s time to make that purchase or keep on renting. Fortunately I have come across a model to help figure it out. According to The Big Picture there are 10 basic factors to consider:
1) Expected appreciation rate
2) Interest rate on a 30 year fixed mortgage
3) Purchase price
4) Property taxes
5) Homeowner association fees
6) Capital gains tax when you sell ( if applicable)
7) Maintenance costs
8) Holding period
9) Estimated tax deduction (for the full holding period)
10) Alternative monthly rent
I find it a lot easier to make a decision when I know what I’m looking for and when I have the facts laid out in front of me. Now I just plug in the numbers and see if it makes sense.
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