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Author: YewGuise Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127815  
Subject: Re: Perspective on selecting a second home Date: 8/26/2011 1:59 AM
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I'd go with the decent 1- or 2-room apartment ... $700-$800/month plus some utilities mainly because I'd want my DH at our primary home on weekends, not cleaning gutters and doing other maintenance on the 2nd home.

But, let's look at the numbers anyway:
Over 4 years, renting would be about $36k. (I'm not counting utilities because he'll have to pay utilities whether he rents or buys, so it's a wash when comparing.) Don't want to "throw away" $36k in rent?

OK, let's say he buys House #2 for $129k (with a 90% mortgage of $116,100 at 5%, 30-yr amortization) and sells in 4 years for the same price, with an average 7% frictional cost at each end.
That'd be $18k frictional costs plus about $23k mortgage interest, for a total of $41k.

Since $41k > $36k, buying would be more expensive than renting. You can tweak the assumptions and income tax benefit to make it equivalent, but I believe that once you add in property taxes, maintenance, and improvements, buying will be far more expensive.

...stinky basement apartment...

I wouldn't live in a basement apartment (stinky or not) for 4 days, much less 4 years. Way too depressing. Your DH will be stressed enough being away from family, don't make it harder than it has to be.

Good luck!
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