A while ago, the New York Times offered an interactive graphic,
which allows you to enter all the variables you need to determine whether you come out ahead buying vs renting. You are able to enter the price for the house, rent of a similar house, down payment, interest rate on your mortgage, along with the assumed increase in home value or monthly rent. Note: you may click on the image above to be taken to the Times’ web site.
Joe
I usually don’t post on Sunday, so this post is going to be a bit off topic, a few general thoughts. First, I’m happy to see readership growing over the past weeks,
as well as steadily over the past 6 months.
I’ve gotten many comments, most of which are positive, all of which are welcome.
Recently, I’ve started posting about the Money Merge Account, and my feelings regarding that product. Lest this blog turn into my soapbox for ranting, I’ve decided to commit to a steady pattern of posts on Mon/Wed/Fri as I’ve been maintaining, and when I have more to say regarding MMA, I will add an extra post on either a Tuesday or Thursday. Other than that, I am trying to vary post topics, so technical, limited interest topics affecting a tiny percent of taxpayers will not appear more than every few weeks. I think there’s a need to bring those topics up as obscure as they may be. As always, your input is welcome and appreciated. Questions, and/or topic suggestion are always welcome.
Joe
If you don’t own a rental property, this may not interest you. If you do, read on.
One of the rules of rental property is that you must take depreciation each year. To be clear, whether or not you “take” the depreciation on your Schedule E each year you must recapture all the required depreciation regardless. Until now, many who did not understand this wound up going back to their returns and amending them for the last three years, but losing the benefit of all the deprecation not taken.
I recently came across an article titled Allowed or Allowable which discusses new revelations that may help you recoup the money you’d have otherwise lost. The article suggests a change in accounting method, and IRS bulletin 2004-3 confirms the content of the article I cited.
As I stated in my introduction, this impacts few people, but those impacted have the chance to save quite a bit of money by reading the above.
Joe
The New York Times offers an interactive page offering beautiful graphs of the change in home prices in different parts of the country.
Clicking on the image above will take you to the Times’ site where you can view the changes in the region you wish.
Joe
The full quote, “There are three kinds of lies: lies, damned lies, and statistics” has been attributed to Mark Twain, and it continues to ring true for me. Last week, I quoted a CNNMoney article which stated, “The national median price drop of 5.8%, to $206,200 from $219,300, was the steepest ever recorded by the National Association of Realtors (NAR), which has been compiling the report since 1979.” Now, I cannot dispute the facts. This statement is likely true, but what is the definition of median? Median simply means the middle number, half are higher, half lower. So far so good? But these numbers only represent transactions, not changes in existing values. Without digging deep into the data, one cannot understand the cause of such a drop. A large turnover in the lower end of the market will skew the data to reflect those sales. It’s possible (though not likely) that homes in a given area increased in value, but a combination of people in the higher priced homes simply moving at a below average rate combined with high transactions in the lower end results in median transaction values dropping.
Joe
