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    I feel like this is an impressive and useful visualization for the old “rent vs. buy” argument for real-estate.

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        I’ve never really understood this push over the last several years toward renting instead of buying.

        A bubble has to burst eventually?

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            Is that another way of saying the same thing?

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                Simply replacing “buy a house when you can” with “you should probably rent instead” is crappy advice, because it ignores all the variables in individuals’ lives.

                OK, but if you happen to be e.g. in SF, New York, or say, Vancouver, there is actually a housing bubble all around you, and it’s not dependent on any of the variables in your life.

                The advice to “rent instead” is sound as long as you’re considering buying a house in a housing bubble. Whether you could still buy now and sell to a greater fool after two more years of an even crazier bubble is irrelevant.

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                    But it wouldn’t be ignored?

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      Stupid question: can I just put the local prices (I don’t live in the USA) there and have some meaningful results? In other words: is there anything US specific?

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        In the US, one can deduct mortgage interest paid on their primary residence from their income. The calculator factors this in, so you could set the marginal tax rate slider to 0% and that should remove it from the calculations if you don’t have an equivalent deduction in your country.

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          I mean you can, but I haven’t paid enough interest to justify itemizing for years at this point. I think, like… two or maybe three years of my mortgage generated enough. Another year of my business generated enough. Mostly, though, it hasn’t been worth doing any deductions.

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            If you live in a state with state income tax then that deduction alone can put you over the standard deduction to start with, so the home mortgage interest will be added on top even if it’s small on its own.

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              Wait, you can deduct state income tax? Do you know if online services like TurboTax take that into account when recommending whether you should itemize or not? I’ve never even attempted to itemize because I assumed it wouldn’t be worthwhile…

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                Every few years, get a CPA to do your taxes. Find out what you’ve been doing wrong. Re-file. Then use the program for a few more years.

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                  Every tax program should handle that.

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          Interestingly, this is one of the questions that has a precise mathematical solution (when it is idealized of course). Essentially, if there is a fixed cost associated with owning a thing vs a cost for using it, each time period, you can break even (on average) if you buy the thing just after you have spent sufficient money on rent to have bought it in the first place.

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            The problem you linked is trading off buying versus renting when the future use is uncertain, but most people expect to either own a home or pay rent every month until they die. The NYT calculator is mainly about calculating the NPV of two streams of payments and trading off the opposing opportunity costs (investing your down payment vs missing out on rising home values).

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            Renting is more flexible, which is a great value is this uncertain time.