Renting Vs Buying
Replies
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A home, that is.
What are your opinions, guys? I'm undecided and always hear "renting is dead money". Any insights?
totally depends on your financial situation/family/lifestyle etc etc etc0 -
Buying a house in my area was cheaper than renting, so I rented for one year and then got the idea to purchase. Been here 10 years this summer. Greatest investment ever.0
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I built a house a few years ago, when the housing market was really bad, basically got it for less than a 30 year old house was selling that needed work.. The housing market was so inflated in the early 2000's and now people are underwater on their houses so if you got money now.. Its a great time to buy cause the market is going to improve.
Renting was nice cause someone else shoveled snow, or cut the grass and did all the maintenance but you were basically getting nothing back for your money... its more of an investment0 -
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.
I can see it from that point of view too.
Right now, they both have pros and cons and it's almost impossible to pick one or the other. Agh!0 -
A home, that is.
What are your opinions, guys? I'm undecided and always hear "renting is dead money". Any insights?
totally depends on your financial situation/family/lifestyle etc etc etc
I'm almost done with university, graduating in a couple of months, with lots of student debt and no down payment to buy an apartment with my boyfriend. My choices are either rent a place with him (then I worry about wasting money) or move in with my parents (who I don't get on with very much) to save money in order to buy.0 -
Unless you are wealthy enough to outright buy a house (without having to take out a mortgage) then this whole "Renting is dead money" argument is not quite as powerful as people make it out to be. Have any of you actually looked at a typical amortization schedule? On a 30 year mortgage, for the first 15 years an insane amount of money goes to pay interest vs. principal. Most of your equity gains will be made through inflation and Federal reserve powered housing bubbles.
I own my own home but the consideration needs more than just a bumper sticker slogan sponsered by your local Real Estate lobby. Financial choices of this magnitude are rarely that simple.0 -
Renting sucks....if you can take a 15 year mortgage and bust your butt to pay it off as fast as you can. Having a paid for home trumps renting easily.0
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renting is a total waste of money ... my husband and i working on buying our 4th hse in the last 13 years... put ur money in something thats going be urs in the long run ....buying is usally around the same price range as of buying :drinker:0
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Always factor in repairs as well. When you rent, someone else pays for major repairs...ie roof, floors, siding, HVAC. Though you are also at their mercy as to a timeframe and the quality of repairs.
I have always rented but recently moved in with my SO and he has been in the same house for 20 years. Last year, we put a roof on 5,000.00. The HVAC system needs to be replaced and the whole house needs updating BUT we do these things on our time and decoide what quality of work we expect and are willing to pay for.0 -
OP - If you have no money to buy then there no question. Yes, living with your parents may suck, but if you can live with them for 18 month and save the $1,000 a month you spend on rent then in 18 months you could but a home. Since you’re just leaving school, I’m guessing you don’t have 2 years of steady employment where you would make enough to qualify for a home loan. I would recommend you suck it up and live at home. Save you money. Sacrifice now to give yourself a better future.0
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if you like to move around a lot and you don't want to commit to the responsibility of owning a home then renting is the better option especially when you're young. When you own a home you have to spend a lot of money on updates and renovations or else you will never see a good return or your investment, buying a bad house can also turn into an endless money pitt. that being said i think paying over $1000 a month for rent is ridiculous, might as well pay 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.?
^^THIS.
Also, do you have the time/talent/ability to do the maintenance (or the cash flow to have someone do it for you)?
Do you want to be in one place for 5+ years? Do you REALLY know where that place is?
If you are renting, DO NOT rent the same caliber of property that you would buy. Rent cheap, save up money so that when/if you do buy you (a) have a downpayment and a contingency fund, and (b) are used to living on what is left over after your mortgage payment.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.
Except after living in my home for 10 years, I made enormous bank when I sold it....
and I know how to turn my own water off so pipes don't burst in the winter...0 -
It really depend s on your priorities. I rented until I was 32 I am now a Home Owner and a Land Lord.
1. Do care more about free time or gaining equity
2. Do you plan on staying in the area you are now or do you want the option of being relocating.
Purchasing - I don't own my house the bank does. But I am building equity and hopefully if I have to sell me house I can get that money back less taxes, fees. In another 13 years I will own my house. Even then I don't truly own it in the sense I cant do anything I want. And If I don't pay the taxes the government can easily take it. If I wan't to build onto the house or put up a fence I have to get neighbors and towns approval. Currently my yard is being torn up by bulldozer putting in a new water line. I don't mind but I also have no real say in it. So it isn't true ownership. Any thing breaks I have to pay for it. Upkeep (painting, roof, water heater) I have to pay for it. The upside it I have equity and I get tax breaks on my rental property and my rental property will also be my retirement.
Renting - It is not throwing your money away. Your paying for a place to live and for someone else take care of the head aches. Think to your self what do I do with my weekends now. Now throw all that out of your mind and replace it with raking, lawn mowing, snow blowing, painting, plumbing there is always something that needs to be done. The only down side is your aren't building equity. but if you have a retirement plan outside of home ownership savings/401k than it doesn't matter.0 -
A home, that is.
What are your opinions, guys? I'm undecided and always hear "renting is dead money". Any insights?
totally depends on your financial situation/family/lifestyle etc etc etc
I'm almost done with university, graduating in a couple of months, with lots of student debt and no down payment to buy an apartment with my boyfriend. My choices are either rent a place with him (then I worry about wasting money) or move in with my parents (who I don't get on with very much) to save money in order to buy.
In your situation, I would not buy YET.
Continue to "live like a student" and save your money -- you need to have a downpayment and a contingency before committing to a house.
Student loan payments kick in ~6mo after graduation, for the months before your payments start, put that amount into savings IN ADDITION TO an amount that you commit to every month. Don’t save what is left after spending; spend what is left after saving.0 -
Think to your self what do I do with my weekends now. Now throw all that out of your mind and replace it with raking, lawn mowing, snow blowing, painting, plumbing there is always something that needs to be done.
Or, you take care of your house so crap doesn't break all the time.0 -
^^^^ Exactly!!!It really depend s on your priorities. I rented until I was 32 I am now a Home Owner and a Land Lord.
1. Do care more about free time or gaining equity
2. Do you plan on staying in the area you are now or do you want the option of being relocating.
Purchasing - I don't own my house the bank does. But I am building equity and hopefully if I have to sell me house I can get that money back less taxes, fees. In another 13 years I will own my house. Even then I don't truly own it in the sense I cant do anything I want. And If I don't pay the taxes the government can easily take it. If I wan't to build onto the house or put up a fence I have to get neighbors and towns approval. Currently my yard is being torn up by bulldozer putting in a new water line. I don't mind but I also have no real say in it. So it isn't true ownership. Any thing breaks I have to pay for it. Upkeep (painting, roof, water heater) I have to pay for it. The upside it I have equity and I get tax breaks on my rental property and my rental property will also be my retirement.
Renting - It is not throwing your money away. Your paying for a place to live and for someone else take care of the head aches. Think to your self what do I do with my weekends now. Now throw all that out of your mind and replace it with raking, lawn mowing, snow blowing, painting, plumbing there is always something that needs to be done. The only down side is your aren't building equity. but if you have a retirement plan outside of home ownership savings/401k than it doesn't matter.0 -
:flowerforyou: Thanks for all of the helpful answers so far, guys...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.
^^ I feel the same. Only rent if you don't intend on staying long! I've rented for 4 years in various places across the country and can't wait to setle somewhere, buy and stop throwing money down the drain.0 -
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.
Agreed. i work in Real estate (non-profit association) and I a m trying to buy. You always hear parents telling you "but you have to have money for repairs, renting is good for now!" Honestly, we pay double in rent for a house than what we would a mortgage payment with the low interest rates. We are paying more to rent, there is nothing leftover for us to SAVE.
Cutting our monthly housing payment in half, by buying, would allow us to save.
The market is making a comeback, interest rates are probably the best you will get. Last year I would see on average 20 new houses come on our market a day, yesterday we had 70.0 -
I think it depends on a lot of factors as well. Yes, renting is just putting your money into someone else's pocket, but sometimes it is unavoidable, if you don't have the money for a down payment on a house, or can't get a mortgage for other reasons.
You also don't want to buy a house and then be house poor either, because you really can't afford to own it.
Yes, the cost of a mortgage can sometimes be the same as rent. Where I live, that is not the case - my mortgage is about $2400/month, but you can rent an apartment for around $1200/month.
If you need to save up money for a down payment, then I would suggest renting something affordable and SAVING your money. If you are going to rent for years and not save a dime towards a house, then you are foolish. Unless of course it is impossible for you to save any extra money while renting. I've been there too. But if you have extra money and don't save it, then that is where you are foolish.
The best possible situation would be to buy a house you can afford rather than renting.0 -
that might be how you see it, but you are wrong. Renting is throwing money away because that money you are paying isn't putting any equity into anything for yourself. If you mortgage a home and put money into it every month, you are putting equity into it, and if you ever sell it, you can possibly MAKE money. If you rent, you can't make any money when you decide to move somewhere else.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 -
I think this basically depends on a lot of factors that basically boil down to where are you at in life. Do you have a stable job and know for sure it will not require a move. Same question for your spouse/BF/SO? Do you have the money for closing and down payment or do you have a plan for assistance in that area? What is the market like in your area? Do you understand the upkeep required for purchasing your own home? Do you have the credit required to purchase a home? etc, etc.
I absolutely do not agree with the statement "Renting is for people who can't afford a down payment". A year ago My husband and I went on a search for a house. I was two or three months pregnant. We have amazing credit for people our age and also had the money for closing and the down payment. We put in offers on multiple house, and were always declined to an investor that offered half the money we did in almost every instance except for two (one was a short sale that kept dragging on and on and the other house had title issues). Finally when I got to the point where I was ready to pop and waddling to every house show, the husband and I decided to give up on the house buying for a while. There are many other reasons why people chose renting over buying such as a job that requires many moves, single parents who are not so handy mandy (my mom rents for this reason), rent is cheaper than a mortgage payment,etc.
We lucked up majorly when we found the house we are renting right now. Similar houses in our area are being rented out for 2 times, sometimes 3 times as much as what we are paying monthly. Even if we bought a house, there is no way our mortgage would be as cheap, thus proving the statement " buying is usually around the same price range as renting", is not always correct. We will most likely buy a house in the future, but right now renting what we are renting is allowing us to save more and more money than buying ever would.0 -
As someone else mentioned, If you can live with your parents for a little while, do it.
save as much as you can. PAY OFF THE STUDENT LOANS!!!!!!!!!!
Don't buy a new car yet.
Even if you can put $500.00 a month in a savings account, do it.
$500.00 * 18 months = $9,000.00
Not a bad down payment.
Explain to your folks what you are trying to do (save for a house) and maybe they will be easier on you.0 -
Oh, and if you prefer not having to do any maintenance to your yard or property, then buy a condo or townhouse instead of renting.0
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$9,000 as a downpayment on what? A house? I don't know about other states, but in NJ, you have to put down 10% unless you want to pay Private Mortgage insurance (PMI) every month... so if a house costs $300k, then you need to put $30k down.As someone else mentioned, If you can live with your parents for a little while, do it.
save as much as you can. PAY OFF THE STUDENT LOANS!!!!!!!!!!
Don't buy a new car yet.
Even if you can put $500.00 a month in a savings account, do it.
$500.00 * 18 months = $9,000.00
Not a bad down payment.
Explain to your folks what you are trying to do (save for a house) and maybe they will be easier on you.0 -
As someone else mentioned, If you can live with your parents for a little while, do it.
save as much as you can. PAY OFF THE STUDENT LOANS!!!!!!!!!!
Don't buy a new car yet.
Even if you can put $500.00 a month in a savings account, do it.
$500.00 * 18 months = $9,000.00
Not a bad down payment.
Explain to your folks what you are trying to do (save for a house) and maybe they will be easier on you.
There are plenty of loan options that don't require a down payment. Especially for first time buyers.
We don't have a down payment, my best friend just bought her first house with no down payment and got the seller to replace roof, leave washer and dryer AND pay closing costs.0 -
Buy V rent.
If you might be moving around in a few years don't buy. Rent.
Sure, all the money you put into a house is an investment. Here is my situation were I wish I had been renting.
I have a 30 year fixed mortgage. It was in a hot area at the time 2006-07 ish and ended up in a bidding war and spent OVER the asking price.
Fast forward to post housing crash. I's about 20k under water in the house. That means if I want to sell my house with the asking price, I will sell it then have to pay the bank and additional $20,000. If I had rented, I could just walk away from it, and not be $20,000 in the hole. It is also preventing me from realistically being able to re-finance the house at the killer rates that are out there now. Good thing I can weather this down turn and when prices raise back up I should be fine.0 -
$9,000 as a downpayment on what? A house? I don't know about other states, but in NJ, you have to put down 10% unless you want to pay Private Mortgage insurance (PMI) every month... so if a house costs $300k, then you need to put $30k down.As someone else mentioned, If you can live with your parents for a little while, do it.
save as much as you can. PAY OFF THE STUDENT LOANS!!!!!!!!!!
Don't buy a new car yet.
Even if you can put $500.00 a month in a savings account, do it.
$500.00 * 18 months = $9,000.00
Not a bad down payment.
Explain to your folks what you are trying to do (save for a house) and maybe they will be easier on you.
What's awesome is you guys are paying my PMI...thank you VA.
No money down, no PMI.0 -
In Florida, you can put zero down and, sometimes you can roll the closing costs into the mortgage.
$9,000 as a downpayment on what? A house? I don't know about other states, but in NJ, you have to put down 10% unless you want to pay Private Mortgage insurance (PMI) every month... so if a house costs $300k, then you need to put $30k down.As someone else mentioned, If you can live with your parents for a little while, do it.
save as much as you can. PAY OFF THE STUDENT LOANS!!!!!!!!!!
Don't buy a new car yet.
Even if you can put $500.00 a month in a savings account, do it.
$500.00 * 18 months = $9,000.00
Not a bad down payment.
Explain to your folks what you are trying to do (save for a house) and maybe they will be easier on you.
It depends on the bank.
Also, a 300K home in NJ (or Florida) might be the norm but, in Ohio, a 300K house is an amazing home.
It depends on where she is buying.
Is she in Miami Beach or, is she is the middle of Kansas?0
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