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Buying a first home
ChadTower:
Home ownership is subjective because it dictates the lifestyle a person leads. People value different aspects of their lifestyle differently and the weight given to each attribute skews the equation. There is no pure buy point for your home. There is for any other property but not for your primary residence.
AtomSmasher:
--- Quote from: shmokes on March 21, 2007, 02:41:16 pm ---Math is difficult. Some people are really good at painting. Others are good at analytical reasoning. Others are good at music. Others spacial reasoning. I'm pretty decent with math, though I don't enjoy it and tend to avoid it. It sounds like information I'd be really interested in, but I don't entirely understand the formula. What is a buy ratio? Do you come up with a number like 65/100 that you should by a house, or the probability that you should buy versus rent is .65? You can't expect a French and Poli Sci major to be especially brilliant in economics and finance.
--- End quote ---
From what I can tell, his "buy ratio" is if its over 1, then you will be saving money when you buy, and if its less then 1 you will be losing money. Of course living in a house is much nicer then an apartment, but this is only concerned with finances.
I guess I'll go ahead and run the numbers to find out my buy ratio since jbox is bad at word problems. Figuring out my exact amount of principle I pay each year would be a PITA, I'll just assume my mortgage payment is all loan interest. And obviously the numbers are not exact, I don't feel like looking up the exact figures, but they are pretty close to accurate.
(1700*12) / ((1800*12) + 2000 - 6000) = 1.16
I guess that means buying house was a good thing for me. Even if there are other expenses to owning a house (which there are), I will still come out ahead, or at least even, and I get the benefits of living in a decent sized house instead of a small apartment. And since the value of my house should be increasing soon (I'm a real estate appraiser, so I keep a close watch on the market and its trends), it makes my house a good investment as well.
ChadTower:
Don't the flying cows affect your resale value?
DrewKaree:
--- Quote from: shmokes on March 21, 2007, 02:41:16 pm ---
You can't expect a French and Poli Sci major to be anywhere close to brilliant in economics or finance or painting or analytical reasoning or music or spacial reasoning or....well, this could go on all day
--- End quote ---
Fixt ;D
So what I think jbox is trying to say is that he's not sure how to figure out whether or not it might be a good idea for you to buy. Did I follow all that jbox?
Oh, and for you guys talking about tax breaks at the end of the year and whatnot, in case you didn't know, jbox lives in Oz and they may not have the same setup. The problem though, is that it doesn't seem like you guys aren't picking up that any of those figures you're mentioning to him actually fit into his formula. You just need to know where to put 'em.
Just because his laws might not be the same and their tax structure might not equate doesn't mean you can't figure out some method to determine if it might or might not be a good proposition to buy instead of rent.
ChadTower:
Down in Oz can't you just put up a lean-to anywhere you want?
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