avg yearly home vs rental appreciation
Started by javahava
about 16 years ago
Posts: 12
Member since: Jun 2010
Discussion about
in the NYT rent/buy calculator: http://www.nytimes.com/interactive/business/buy-rent-calculator.html they have the avg. yearly home appreciation at 1%, with rental appreciation at 3%. wouldn't it make more sense for both to be kept equal (equal to inflation)? when using calculators like this, what variables do you typically use for these numbers?
long term, they actually match more inflation. but maybe NYTimes is factoring in the lower % for purchase because we're in a decline.
> long term, they actually match more inflation.
shouldn't they actually match wage inflation in theory? well... to be exact it should match discretionary income that can be used towards housing.
Interesting question - my first thought is that rentals include annual costs, including taxes, maintenance / labor, etc. On ownership, the annual costs are separate from the price of the place. So there could be greater appreciation of annual rents as compared to the purchase price or fixed portion of owning.
Of course I say that because I assume that we will be seeing greater taxes over time, and despite unemployment rates, I suspect that labor / maintenance costs are increasing too. Plus energy.