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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?
Response by somewhereelse
about 16 years ago
Posts: 7435
Member since: Oct 2009

long term, they actually match more inflation. but maybe NYTimes is factoring in the lower % for purchase because we're in a decline.

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Response by notadmin
about 16 years ago
Posts: 3835
Member since: Jul 2008

> 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.

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Response by anonymous
about 16 years ago

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.

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Response by anonymous
about 16 years ago

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.

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