Renting Vs Buying
Replies
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well...there are certainly pro's and con's to each. depends on what you're looking for.0
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I would never rent, I feel like it's a waste of money in my opinion.
My mortgage is the same amount as renting an apartment where I live would be.
It all depends.0 -
If you have the means to buy, then buy. Renting, all you are doing is giving your money to someone else to pay off their mortgage. Buying a house, you are putting money back into your own pocket with equity. Even if you buy something small first, then sell, and go bigger. Renting is basically for people who can't afford a down payment. Sometimes renting is almost the same as a mortgage!!!0
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It depends on quite a few variables, and these are just my 2 cents:
(1) can you take advantage of the tax deduction?
(2) can you afford the down payment or does that drain your savings?
(3) what is the real estate market like in your area? Home prices do swing and many people lose money. It also takes a long time for your investment in a home to pay off in many instances. Many advisors say you need to be in your home at least 5+ years to make buying worthwhile and that assumes a stable market.
(4) how secure is your job? If you lose your job will you likely need to move to find another one?
(5) how does the potential mortgage fit into your budget? Did you account for upkeep/capital improvements such as lawn care, appliance repair, a new roof, etc.?0 -
If you have the means to buy, then buy. Renting, all you are doing is giving your money to someone else to pay off their mortgage. Buying a house, you are putting money back into your own pocket with equity. Even if you buy something small first, then sell, and go bigger. Renting is basically for people who can't afford a down payment. Sometimes renting is almost the same as a mortgage!!!
I understand that. It seems to create a bit of a vicious cycle too. I mean, what if you can't afford to buy, but due to paying rent can't afford to put money away in order to buy in the future?0 -
I just read something that said people in my area are renting more because they feel its a safer option than buying since the economy is bad and whatnot so they don't feel tied to a house. I know my parents are in a rough spot because they can't sell the house and that means my dad lives in a city 4 hours away in a crappy apartment while my mom lives there.0
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If you have the means to buy, then buy. Renting, all you are doing is giving your money to someone else to pay off their mortgage. Buying a house, you are putting money back into your own pocket with equity. Even if you buy something small first, then sell, and go bigger. Renting is basically for people who can't afford a down payment. Sometimes renting is almost the same as a mortgage!!!
I understand that. It seems to create a bit of a vicious cycle too. I mean, what if you can't afford to buy, but due to paying rent can't afford to put money away in order to buy in the future?
Yeeeep. That's part of teh sucktitude of renting. I could have owned half a decent sized home just over the last 5 years with what I pay in rent.0 -
I just read something that said people in my area are renting more because they feel its a safer option than buying since the economy is bad and whatnot so they don't feel tied to a house. I know my parents are in a rough spot because they can't sell the house and that means my dad lives in a city 4 hours away in a crappy apartment while my mom lives there.
^^ This is what is so often forgotten in the "you gotta buy" advice. Mobility is very important in today's economy. The U.S. government has crafted the tax laws such that there is a tax advantage in buying. But, honestly, if you are not getting a significant tax advantage, then buying isn't always the best option. Most importantly, if the market goes down, then it may be impossible to sell your house and renting it out may not pay your mortgage. It's a much more complex decision then most people think.0 -
If you have the means to buy, then buy. Renting, all you are doing is giving your money to someone else to pay off their mortgage. Buying a house, you are putting money back into your own pocket with equity. Even if you buy something small first, then sell, and go bigger. Renting is basically for people who can't afford a down payment. Sometimes renting is almost the same as a mortgage!!!
I understand that. It seems to create a bit of a vicious cycle too. I mean, what if you can't afford to buy, but due to paying rent can't afford to put money away in order to buy in the future?
Yeeeep. That's part of teh sucktitude of renting. I could have owned half a decent sized home just over the last 5 years with what I pay in rent.
Hmm, that's what I'm scared of!0 -
If you have the means to buy, then buy. Renting, all you are doing is giving your money to someone else to pay off their mortgage. Buying a house, you are putting money back into your own pocket with equity. Even if you buy something small first, then sell, and go bigger. Renting is basically for people who can't afford a down payment. Sometimes renting is almost the same as a mortgage!!!
Not true. As a single mother I prefer renting bc if something goes wrong I don't have to fix it. I call the landlord and he takes care of it. I may be able to buy for less but not having the hassel of upkeep is a better peace of mind right now.0 -
Sometimes renting is the best option for people at different points in life. My boyfriend and I rent right now, it is our first place together. But we are looking to buy in the near future!0
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I think buying is a great option if you can afford a down payment (ideally at least 10-20%) and plan on staying in the house for at least 7-10 years. If you see yourself moving in less than that time frame, I would say renting is a better option. If you get a 30 year mortgage and pay it for less than 5 years and then decide to sell, you will have built up very little equity as the majority of your monthly mortgage payment goes towards interest. Not to mention, it can be difficult to sell a house quickly in this economy.
Dave Ramsey gives a lot of great advice about buying vs renting http://www.daveramsey.com/articles/article/articleid/the-truth-about-real-estate/category/lifeandmoney_realestate/0 -
Because I'd be responsible for the upkeep of the home as well as the mortgage, I don't see myself buying a home in the future unless it was in entirely in full (which is unlikely, as if I even had a quarter million dollars I doubt I'd blow it all on a single purchase like that).
I'll always rent.0 -
My husband and I heard the same thing. Renting is wasteful! Buy a house! Good investment! So we bought a house. We considered it an investment and planned on moving in 3-5 years and using the profit as a down payment on a house we really wanted. It's been 7 years and we're still underwater. If we'd rented those 7 years we'd still be even. As it is, we've paid to have the HVAC fixed, the hot water heater replaced, landscaping, flooring, etc. And we're still stuck in a place we'd rather not be. We're hoping to be able to rent the current place next year and move. But that depends on if we can refinance this place and get the cash for a down payment on another place.
If we loved the house, none of this would matter. So if you absolutely adore a house and have no plans on moving (and your job is very secure), go for it. If you're thinking about buying just because people tell you it's a good idea, point out that there are many people still trapped in homes that are so far underwater that it will be another decade before they can break even.0 -
It varies from place to place and there are definate advantages/disadvantages to both but in the area I live, I tell people that if the bank will let them buy, buy. Rent in this area is typically the same or more than you would pay to buy a comperable home AND you have are builiding equity with every payment. I like to tell people, and practice, putting a little extra money in towards principal every month. Look at a mortgage calculator or two and you will find that if you can afford an extra $50 or so a month, it equates to YEARS off the backside of a mortgage.0
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Depends on so very many things. My husband and I have just purchased our first house after years of renting and saving money for the deposit and there is no better feeling. But, it took years of saving money and cutting back on holidays etc - and a helpful boost left for my husband in a will - before we were able to do it.
You are in charge of your own home - having rented from landlords who could litterally take months to fix something that a tenant should expect to be prioritised - e.g. busted heating in the middle of November with temperatures in the minus figures - I will take the extra cost to us now because we are in control. But I acknowledge that we are lucky to be able to do that.
Depends on your circumstances I think - and where you live and the housing market. I'm UK based and our housing market is completely crazy at the moment!0 -
I am in the same boat. I spoke to a friend who recommended wiping out ALL credit card debt BEFORE even considering such a thing.0
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I am in the same boat. I spoke to a friend who recommended wiping out ALL credit card debt BEFORE even considering such a thing.
This absolutely - debt has a quite shocking effect on your ability to get a mortgage. Our first mortgage quote was with 2-3k on credit cards. When we went back with 0 debt, the amount we could borrow went up by about 50k!0 -
I just read something that said people in my area are renting more because they feel its a safer option than buying since the economy is bad and whatnot so they don't feel tied to a house. I know my parents are in a rough spot because they can't sell the house and that means my dad lives in a city 4 hours away in a crappy apartment while my mom lives there.
This. If you want to purchase in the future maybe get a flexible lease.
To be honest, I don't really look at homeownership as a temporary thing, where you are going to sell off at some point. I also seriously think the idea of "equity" needs to be looked at. I grew up poor and unfortunately am currently in debt (I didn't even get to buy anything fun with it, it was mostly groceries and medical bills.) but I can't imagine putting up something as important as my place to live as collateral for a loan- so if something happens and you can't pay it back, or the lender decides to change the terms somehow... you end up with no place to live? As a low income person, having no place to live is the bogeyman in my household. You do all that work and then finally pay off your home when you're like 67, and then it's yours. Before that, the bank can take it away at any time. It's not yours til then. And other than renting out a room or something, I don't really see a "safe" way to make money off your home. I learned like 2 years after being old enough to drink- credit is NOT money. I wish I'd learned it sooner and wealthy people who bet their home on stupid things like "I'm gonna buy new furniture, but I have good credit, I own my home!" confuse the heck out of me.
Also, I hate the area I'm living in. If I find a life that doesn't make me daydream about hopping a bus somewhere totally different, I will buy a house there.0 -
I just sold my home of 15 years and took $75000 loss. Renting would had been much more profitable... That $75000 did not include all the Home Depot trip over the years, prolly another $25000. I will never own ever again! Waste of money!!0
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I'd prefer to buy, but the rent on my house is about half of what my mortgage payment would be if I bought. It depends on what you really want and your financial situation. Unfortunately I live paycheck to paycheck and will probably never be able to buy because I can't save up enough for a down payment.0
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I rent just now, I like not being tied to house with the option to move quickly if necessary (new job etc) in this economic climate. Plus like has already been said if I have a problem, my landlord has to sort it, not me
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If you buy see it more as an investment in your quality of life and less as a financial investment. Too many people buy houses with this crazy idea that they will "make a profit", this thought process just leads to buying more house than you can afford/need/want and then when everything falls apart (housing bubble anyone?) you are left in a worse position than before.
We own our home, free and clear, not because we are loaded (single income household here) but because we bought within our means and we live within our means.0 -
Depends on many factors including financial goals, work stability, and lifestyle. For me, buying a house doesn't fit in my lifestyle. I moved from Mississippi to Alabama to New Jersey to Portugal within a 6 year span. Now we're looking at work in Norway and will most likely move again. We have the money for a downpayment, but there's a lot more to it than that. I like changing my scenery and usually get itchy feet after about 2-3 years….so I need to rent for the flexibility.
Again depends on the individual's situation!0 -
This "rent is a waste" idea pushes people into owning at any cost. You don't own your home any more than when you rent, the bank does. I don't see rent as throwing money away, I see it as paying to live where I want and have someone else worry about the pipes bursting in winter.0
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Because I'd be responsible for the upkeep of the home as well as the mortgage, I don't see myself buying a home in the future unless it was in entirely in full (which is unlikely, as if I even had a quarter million dollars I doubt I'd blow it all on a single purchase like that).
I'll always rent.
This.
I've always rented and always will, I have no need to own my own house or the cost's that come with owning and it's never bugged me that my rent money is paying someone else's mortgage. I doubt my landlord is getting rich off of me just this winter alone our pipes froze twice, and the washer died to get them fixed took nothing more than 3 phone calls to the landlord to tell him.0 -
Renting is dead money.A home, that is.
What are your opinions, guys? I'm undecided and always hear "renting is dead money". Any insights?
However, if you cannot afford the upkeep on your own house (plumbing, appliances, roof, ect), then renting might be your only option.
My wife and I are both pretty handy so, most of the things that break in our house can be repaired by us.
As far as loss of value is concerned, if you purchase a house that you love, in a neighborhood that you love, then don't worry about the value dropping. We just saw this happen in America between 2000 and 2010 but prices are going back up now.
From what I have studied, this happens roughly every 60 years. Prices creep up and then, suddenly, they skyrocket for about 10 years, flatten out, and then drop.
If you are looking to purchase a house right now, look 30 years down the road. That cute 2 bedroom with street parking might really suck if you get married and have a few kids.0 -
I've bought and sold several houses over my lifetime. I've never actually made any money when I sold a house. Repairs cost money, even if you do it yourself.
However...I've learned how to do a lot of things owning my own home; I can have as many pets as I want; and I can do whatever I want to it. Having both rented and owned, I think it's unlikely I'd go back to renting unless it's a short term (one of the things I'd like to do after retirement is spend 2-6 months in various cities now and then; then I'd rent).
If you want to own a house, my advice is get a 15 year loan. Then at least you have some equity; it's much harder to achieve that with a 30 year loan.0 -
While my husband was in the Navy, we moved around a bit, so renting was the way to go. Once he got out, we bought our house and raised our son in a neighborhood where he had friends & good schools. Now that the kid is 1/2 way thru college, we are now planning to down size in the next 3-5 years.
Renting is easier as far as maintenance goes, but we've earned quite a bit of equity in our home over the years. The worst part about renting to me is that the money is gone & you get nothing out of it really. On the plus size, you have more freedom to leave & don't fork out money for maintenance. Our house needed a new roof: $5000, new heat pump: $8000, sick trees removed: $2000. You get the idea. One smart thing we did was to buy a house that was way less than what we qualified for. That helps us to afford the upkeep on it. I highly recommend this. I love my house because we've made so many wonderful memories here and truly made it "home." It'll be hard to leave when we do, but it really is more house than we need at this stage of our lives.0 -
I bought my house three years ago. It needed a total rehab (I come from a DIY family, and like projects), but it's in a desirable neighborhood with excellent schools; about to put it on the market and looking towards a $30,000 - $45,000 profit. I was looking more for a short-term investment, rather than living there for 20+ years, and really took my time researching housing prices for the area before buying. I also have roommate who covers almost 70% of my mortgage.
I think that buying v. renting really depends on where you are in your life, and where you live. My area hasn't been as effected by the housing crash as others.
I'm won't lie, I cried when my furnace went and I had to replace it with money I'd budgeted for a vacation. That's just homeownership.0
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