Way back in 2005, I did a study comparing rent to mortgage interest (both are dead money).
The normal saying is "Rent is dead money", I proved that rent is not dead money if the differences between the rent and mortgage repayments is put into another investment.
Low and behold, the New York Times "Is it better to buy or rent" has investigated just the differences between rent and mortgage interests and come to the same conclusion that after 7 years it is better to buy.
What they didn't cover was the effect of saving the difference.
Note to self, I need to get some funky graphics to demonstrate this in the future.
The other thing which I didn't cover was that houses built after 1985 can be depreciated at 2% per year on the asset value of the house not the property value.
Have Fun
Paul
Thursday, April 22, 2010
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