attics of my life

A couple of days ago, my wife and I were walking back from the TatteredCover and were handed a flier for a condo that cost $192k for 781 sq. feet. I did the math on that and it comes out to $243 per sq. foot.

So, I got curious about the math. I assumed a 5.5% interest rate and no taxes and insurance costs. On a 15 year mortage you would have to put $100k down to get the same payments as my rent. But you would have equity equal to about $82k. But I would suspect that if you have $100k in the bank you probably wouldn't want to buy a $192k condo.

If you put down 30% of the $192k, $57.6k, you would have a payment of about $1100 a month on a 15 year mortage. If you invest the down payment + the difference of the two payments, $400, and can get 5% interest you total would be after 15 years, $226k. If you can get the S&P average which is about 11%, you would have $450k. Or if you put zero down and invest the difference at the S&P average, $900/month, you would have $393k

So when does buying a condo no longer make sense?

UPDATE: As someone pointed out in the comments I forgot to include the mortage payment w/ $0 down, it's $1600.

There are 4 Comments for Renting vs. Owning

Add A Comment

Name:

Email:

URL:

Message:

Performing Spam Check