Confession: Even if home ownership is more expensive than renting, we’ll most likely still buy.
Not certainly, just probably. We also probably won’t wait to see if T gets tenure. Seven years is a long time to wait, and we may take a gamble. And if he doesn’t get tenure, I’m not so sure we’ll jump up and move wherever in the world he can get a new job. He might be “stuck” looking at his options locally. Maybe not, but I just can’t predict that.
I ran the New York Time’s calculator, and with our current rent and a $750k house (that is just a number, not a plan!), buying is NEVER better than renting. Looking at it more holistically, I compared what I’d expect to pay in rent for a more long term type of place. Still, it will take 11 years for buying to make more sense (without fiddling with the assumptions much).
I’m not sure how taxes are taken into consideration. I know we pay a LOT in taxes, and it is only going to get worse. I’ve heard mixed reviews about whether this is actually a big deal. I’ll eventually run some better numbers to get a handle on how much we’d be paying for the privilege (slash hassle) of owning a home, but for now, we’re just feeling out the options. Our timeline is to start looking more seriously next spring.
EIther way, step 1 is to save a lot of cash. We currently have about $50-$60k (excluding e-fund) that we saved throughout our marriage while T was wrapping up school, $60k as part of the moving package, and hope to save about $30k this year, not including any bonus from my job. In theory, we could buy with 20% down within a year. In reality, $200k might be a nice round goal, which puts us a little later. We could always ramp up savings by decreasing T’s retirement savings a bit, but he’s a bit behind me so dumping the max into tax-sheltered accounts probably smart for the first few years at least.
Next step: Scrub our ridiculous non-budget spending, and see where we could/should cut out things. I can think of two immediate places to cut: restaurants & wine. And clothes, I guess. More to come!