Honestea
New Contributor
- Joined
- May 24, 2016
- Messages
- 15
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Hi everyone, I've read the Fastlane book and have recently found the forum. Here's a brief background: I have been a relatively high paid employee at a stable job for the past 10 years, so I have some savings (about $300K). I have been a wannabe entrepreneur in last couple of years and now I am putting it to action finally. I am planning on using some of my savings as a buffer zone and start up funding.
We live in a very costly area, and current rent is $3000/m for small one bedroom. With a baby on the way, we need more space so we have been planning to move to the outer boroughs. Unfortunately the rents there are not much lower there- for a decent 2 bedroom, it will be about $3000/m.
So I have looked at the maths of buying vs renting: If I allocate $200K of my savings for the down payment with the rest $100K for my startup, my mortgage plus taxes and insurance will be roughly the same as the rents in the outer boroughs.
I have heard many theories why owning a home with mortgage is not an asset but a liability, especially for entrepreneurs who need that cash flow when first starting out. However, throwing away $36k a year in rent ($180K in 5 years) does not sound a wise decision either, when that could be my equity on the house thrown away for no return.
What's your thoughts?
We live in a very costly area, and current rent is $3000/m for small one bedroom. With a baby on the way, we need more space so we have been planning to move to the outer boroughs. Unfortunately the rents there are not much lower there- for a decent 2 bedroom, it will be about $3000/m.
So I have looked at the maths of buying vs renting: If I allocate $200K of my savings for the down payment with the rest $100K for my startup, my mortgage plus taxes and insurance will be roughly the same as the rents in the outer boroughs.
I have heard many theories why owning a home with mortgage is not an asset but a liability, especially for entrepreneurs who need that cash flow when first starting out. However, throwing away $36k a year in rent ($180K in 5 years) does not sound a wise decision either, when that could be my equity on the house thrown away for no return.
What's your thoughts?
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