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In that time range, statistically you will be eating up any money you would make back in principal by your closing costs alone. I didn't get to read the wealth of information here, but I would rent if I were in your shoes. Good luck- it's ok to just want to be able to call something you're own even if you walk away more or less break even.
Rule of Thumb-anything less than 4 years, don't plan on realizing a gain.
So ask yourself this. Is it worth the risk to be tied down to a mortgage with the real potential of loss simply to have shelter?
Your math is flawed Gary.
1) You don't include any other closing costs in your percentage. In many places the closing costs can be much more than simply the commission. (For example, in Philly there is a 4% transfer tax - usually split between buyer and seller, but a motivated seller will often pay all 4%).
2) Where is the source for your inflation number?
3) The 3% amount is on the assessed value, which may have little to do with the market value of a property.
4) The commission is deducted from the end sale price, so it is a higher number than "add 6%". (say you purchase at 90k, you add 6% = $5,400, but the sales price is 100k, you actually need to budget $6,000).
5) You 5.5% appreciation per year does not equal 22.99%. You have to compound the % each year. I'm not quite sure where you got 5.5% actually....5.5 x 4 = 22% and 5.5% compounded = 23.88% (Odd since you compounded the 4%).
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