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In what specific ways is the calculator flawed?


I looked at it and what I noticed:

It assumes home prices will rise equal to inflation which hasn’t been true in recent years

It doesn’t allow you to add monthly utilities for renting but assumes 100$/month for buying. I personally have never rented a place where all utilities were covered

It assumes quite high property taxes compared to what I pay

It assumes market returns of 4.5% which is true in a long term sense but not really in the short term

It assumes rents will increase 3% per year, configurable but not true in recent years

It factors in closing costs so I guess it’s assuming you will sell at the end of the period? This is a somewhat strange assumption to me. At the end of the period I could borrow against the value of the house without selling it for instance.

I think it’s a really good tool though I wish it had just a few more options to tweak, and that the defaults got updated to reflect current rates perhaps


You can change all those assumptions? I changed most of them and even by having rent going up 5% a year and a market return for housing of 6% a year.

It also assumes the SP500 only returns 5% a year while in practice historically it is closer to 10.




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