So we worked up a rent vs buy spreadsheet considering all of the inflow/outflow items involved with owning vs renting (closing costs, PITI, HOA dues, maintenance, home improvement, home appreciation, alternate investment opportunities with additional funds, realtor fees on the ultimate sale, etc).

We considered a 3% annual appreciation on the home, as in a normal market that is the mean. And we added in an amount proportional to the value of the home for maintenance and repair – seperate from home improvement which we valued at a 80% return (optimistic IMHO), home improvements were added @ the 80% to the value of the home so it could appreciate at the same 3% annual appreciation. Also, home improvement is a bit of a hobby for us so we knew in advance about what we would spend per year on this.

On the rent side, we did come to a net savings and invested those funds at a point higher than the interest rate on the house.

We found our breakeven point came at 3-5 years of home ownership.

So now the question is – will we be staying at our home for that amount of time? (it helps to keep this timeframe in mind as a minimum during the home shoppoing process) – AND now that we had the hard numbers in front of us – would it be worth it emotionally to take the financial hit in years 1-3 just to be living in the home we chose? (In case due to some unforeseen circumstances we had to move.)

The answer in our case was yes – but I can think of many points in my life where renting was and would always be the better solution. (Even with our two big dogs.)

Case in point baing the inital move to a new city – a 6 month lease gave us enough time to fully invesigate the city and neighborhoods to find where we wanted to buy a house and the house itself. In the meantime we saved a tidy sum for the downpayment (in addition to profit from our former home – and yes, the tax consequences for the profit if a home was not repurchased within 2 years was taken into the rent vs buy consideration).

Thanks for the post – just my 2 cents.

And you mean you can’t just have your kid sleep in the bathtub and wear the same clothing every day? You could just hose them off when they get dirty!

But I’m not talking about giving kids toys. That’s another issue that society in general should learn to curb. I’m just talking about the extra living space another person tends to take up. Even when that person is only a foot and a half tall, they require space. And when they get up and walking,.. they’re off to conquer the world. It’s just all the stuff (not junk,.. stuff) that we use in life. In the baby example, you have a changing table, crib, a reasonable amount of toys, clothes, storage for diapers, etc… It just blows up on you. Point being, an 1100 sq. ft. place begins to feel a lot smaller once you start adding kids to the mix.

Sorry by the way,.. I’m not trying to come off as critical or rude,.. just realistic. I’m a big fan of your blog, but this one seemed a little biased. You sound like you are regretting your house purchase.