Renting Vs Buying

aliciagetshealthy

I want to move to Texas, no property taxes!

I'm not sure where you got the impression that there are no property taxes in Texas, but you'd be mistaken. There is no state income tax, but there is a higher than average sales tax, and definitely a property tax <albeit, still lower than many areas>.

that's weird - I remember researching homes a few years ago and I'm like 99% positive that we read there was no property tax or income tax in Texas.

I can't honestly say I know about all areas of Texas, but in the SE Houston area, my daughters' 2,200 sf home on 1/3 acre is $4,000 yr. I have yet to see listings in this area that didn't have property tax as well. Whether that's the case for the entire state? I've never honestly researched outside this area.

TomTomato

I agree with BeachIron. It depends on your situation. Are you going to live there for a while? What kind of housing market are you in? Will you want to make changes to the house? What will you be paying in taxes if you buy? Are the taxes likely to increase? I did a re-fi last year which knocked my mortgage down $100/month only to have the taxes go up by that much this year!

olDave

When I was younger the prevalent thought was buying was best. However, if one takes into consideration the costs often overlooked in buying (taxes, maintenance, remodeling,insurance, etc), then what happens over a lifetime is people only THINK they make money on buying. The added value of real estate ends up simply being a "REBATE" of those overlooked expenses. It might have been better to use the money one spent on those overlooked expenses on investments that returned a premium.

If you are weighing the pros and cons then don't forget to consider ALL OF THE COSTS of home ownership.

Good luck.

JPod279

There is an old saying....Buy land. They aren't makin any more of it.

fuselighter

When I was younger the prevalent thought was buying was best. However, if one takes into consideration the costs often overlooked in buying (taxes, maintenance, remodeling,insurance, etc), then what happens over a lifetime is people only THINK they make money on buying. The added value of real estate ends up simply being a "REBATE" of those overlooked expenses. It might have been better to use the money one spent on those overlooked expenses on investments that returned a premium.

If you are weighing the pros and cons then don't forget to consider ALL OF THE COSTS of home ownership.

Good luck.

I own 2 homes that are rented out and live in an apartment that I am renting. I can assure you that my apartment is owned by a corporation that is in business for the sole purpose of making money. ALL THE COSTS (taxes, maintenance, insurance) plus some profit are passed on to me in the form of my rent. While there are definitely situations that call for renting, I would much rather own my house.

I am glad to own the 2 houses that I already have and don't intend to rent too much longer. Regarding my rental properties, I look at it like someone else is buying a house for me. One day I will either retire and sell them both or keep them and have a steady monthly income in retirement.

nolachick

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/

great advice and i'm glad I came across this post.

a lot of ppl ask me the same thing, but I don't feel I should buy unless I know I will live in the house for an extended amount of time and have job security. i'm not at that point of my life yet so I rather rent.

also someone mentioned about having the freedom to just call the landlord and get things fixed which is a major plus for a single girl who is renting.

of course when I am married and have a family I will be wanting a home, but for now i'm quite happy where I'm at.

olDave

When I was younger the prevalent thought was buying was best. However, if one takes into consideration the costs often overlooked in buying (taxes, maintenance, remodeling,insurance, etc), then what happens over a lifetime is people only THINK they make money on buying. The added value of real estate ends up simply being a "REBATE" of those overlooked expenses. It might have been better to use the money one spent on those overlooked expenses on investments that returned a premium.

If you are weighing the pros and cons then don't forget to consider ALL OF THE COSTS of home ownership.

Good luck.

I own 2 homes that are rented out and live in an apartment that I am renting. I can assure you that my apartment is owned by a corporation that is in business for the sole purpose of making money. ALL THE COSTS (taxes, maintenance, insurance) plus some profit are passed on to me in the form of my rent. While there are definitely situations that call for renting, I would much rather own my house.

I am glad to own the 2 houses that I already have and don't intend to rent too much longer. Regarding my rental properties, I look at it like someone else is buying a house for me. One day I will either retire and sell them both or keep them and have a steady monthly income in retirement.

Buying a house as rental property is not comparing apples with apples. Someone else IS paying the mortgage.

WendyTerry420

When I was younger the prevalent thought was buying was best. However, if one takes into consideration the costs often overlooked in buying (taxes, maintenance, remodeling,insurance, etc), then what happens over a lifetime is people only THINK they make money on buying. The added value of real estate ends up simply being a "REBATE" of those overlooked expenses. It might have been better to use the money one spent on those overlooked expenses on investments that returned a premium.

If you are weighing the pros and cons then don't forget to consider ALL OF THE COSTS of home ownership.

Good luck.

I own 2 homes that are rented out and live in an apartment that I am renting. I can assure you that my apartment is owned by a corporation that is in business for the sole purpose of making money. ALL THE COSTS (taxes, maintenance, insurance) plus some profit are passed on to me in the form of my rent. While there are definitely situations that call for renting, I would much rather own my house.

I am glad to own the 2 houses that I already have and don't intend to rent too much longer. Regarding my rental properties, I look at it like someone else is buying a house for me. One day I will either retire and sell them both or keep them and have a steady monthly income in retirement.

I would never rent from a big corporation. I've had much better luck with individuals that I know and trust.

fuselighter

When I was younger the prevalent thought was buying was best. However, if one takes into consideration the costs often overlooked in buying (taxes, maintenance, remodeling,insurance, etc), then what happens over a lifetime is people only THINK they make money on buying. The added value of real estate ends up simply being a "REBATE" of those overlooked expenses. It might have been better to use the money one spent on those overlooked expenses on investments that returned a premium.

If you are weighing the pros and cons then don't forget to consider ALL OF THE COSTS of home ownership.

Good luck.

I own 2 homes that are rented out and live in an apartment that I am renting. I can assure you that my apartment is owned by a corporation that is in business for the sole purpose of making money. ALL THE COSTS (taxes, maintenance, insurance) plus some profit are passed on to me in the form of my rent. While there are definitely situations that call for renting, I would much rather own my house.

I am glad to own the 2 houses that I already have and don't intend to rent too much longer. Regarding my rental properties, I look at it like someone else is buying a house for me. One day I will either retire and sell them both or keep them and have a steady monthly income in retirement.

Buying a house as rental property is not comparing apples with apples. Someone else IS paying the mortgage.

I did not buy either as rental property. Both were my primary residence at one point. Also, there are certainly times when renting is the best and maybe only option. I was just out of college once, and wasn't always in a situation where I could afford to buy a house. But, the point is if you think you aren't paying property taxes and maintenance because you're renting, that is just not true. You are paying all that plus more.

On the other hand, I could live in an apartment for 40 years and hope I was able to save enough cash in my 401k to retire and continue to pay rent in retirement. Rent vs buy definitely depends on the situation. Just trying to point out the advantages to purchasing.

WendyTerry420

When I was younger the prevalent thought was buying was best. However, if one takes into consideration the costs often overlooked in buying (taxes, maintenance, remodeling,insurance, etc), then what happens over a lifetime is people only THINK they make money on buying. The added value of real estate ends up simply being a "REBATE" of those overlooked expenses. It might have been better to use the money one spent on those overlooked expenses on investments that returned a premium.

If you are weighing the pros and cons then don't forget to consider ALL OF THE COSTS of home ownership.

Good luck.

I own 2 homes that are rented out and live in an apartment that I am renting. I can assure you that my apartment is owned by a corporation that is in business for the sole purpose of making money. ALL THE COSTS (taxes, maintenance, insurance) plus some profit are passed on to me in the form of my rent. While there are definitely situations that call for renting, I would much rather own my house.

I am glad to own the 2 houses that I already have and don't intend to rent too much longer. Regarding my rental properties, I look at it like someone else is buying a house for me. One day I will either retire and sell them both or keep them and have a steady monthly income in retirement.

Buying a house as rental property is not comparing apples with apples. Someone else IS paying the mortgage.

I did not buy either as rental property. Both were my primary residence at one point. Also, there are certainly times when renting is the best and maybe only option. I was just out of college once, and wasn't always in a situation where I could afford to buy a house. But, the point is if you think you aren't paying property taxes and maintenance because you're renting, that is just not true. You are paying all that plus more.

On the other hand, I could live in an apartment for 40 years and hope I was able to save enough cash in my 401k to retire and continue to pay rent in retirement. Rent vs buy definitely depends on the situation. Just trying to point out the advantages to purchasing.

......unless you are renting from an individual and your rent payment is much lower than the normal market rate.

fuselighter

When I was younger the prevalent thought was buying was best. However, if one takes into consideration the costs often overlooked in buying (taxes, maintenance, remodeling,insurance, etc), then what happens over a lifetime is people only THINK they make money on buying. The added value of real estate ends up simply being a "REBATE" of those overlooked expenses. It might have been better to use the money one spent on those overlooked expenses on investments that returned a premium.

If you are weighing the pros and cons then don't forget to consider ALL OF THE COSTS of home ownership.

Good luck.

I own 2 homes that are rented out and live in an apartment that I am renting. I can assure you that my apartment is owned by a corporation that is in business for the sole purpose of making money. ALL THE COSTS (taxes, maintenance, insurance) plus some profit are passed on to me in the form of my rent. While there are definitely situations that call for renting, I would much rather own my house.

I am glad to own the 2 houses that I already have and don't intend to rent too much longer. Regarding my rental properties, I look at it like someone else is buying a house for me. One day I will either retire and sell them both or keep them and have a steady monthly income in retirement.

I would never rent from a big corporation. I've had much better luck with individuals that I know and trust.

Sadly I am in an apartment complex. I just moved to TN and only had a week to find a place. I have not decided if I will rent or buy, but I will leave the apartment as soon as my lease is up. It is just too small for my family and for the same amount monthly I can rent or buy a house with 2x the space.

Buying a house can definitely be a good thing, but not something to take lightly. It is generally the biggest purchase of a person's life.

KANGOOJUMPS

yep, renting is like pissing it away, we own.

Fitnin6280

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?

Believe it or not, there are still programs out there for first time home buyers. These programs can help you get a loan with little or no down payment.

It really is a good time to buy right now. Interest rates are still low. The bank I work at is offering as low as 3.75% on the secondary market. It really is a buyers market right now. So in my opinion, I would buy. It is worth the investment, becuse eventially the housing market is going to go back up, and your home will go up in value, so if you want to sell, you will get more out of it than you put in. That is, if you are willing to stay in the same home for 8-10 years.

VryIrishGirl76

I just purchased this past year.
It's cheaper than rent....

bearwith

buy

devil_in_a_blue_dress

I've rented a lot and owned twice. I prefer renting.

If something breaks -- not my problem. Also, given what happened to the market a few years ago, the investment just isn't as sound as I would like. I know too many people who are completely underwater with their homes. I never want to feel stuck like that.

I've renovated 3 homes -- I hate it. I also hate diverting money into things like new roofs, new water heaters, new furnaces -- things I've previously spent A LOT of money on. I'd rather save for retirement or vacation.

I am really, really lucky because I own where I live now out right. So I don't have to worry about paying a mortgage on top of all the little things homes need .

Anyway, pros and cons to each.

OspreyVista

It depends on a lot of different aspects, as many have stated before. It depends on if your financially able to, and if your lifestyle suits it as well. Personally, I'd rather buy than rent because I want to do whatever I want to my house without having to worry about asking someone if I can do it or not. I want to paint my walls, by all means I can! I want to change from carpet to hard wood flooring, no problem! I want to update, I don't have to ask or anything for it, I can do what I want, and for me personally, that's the biggest advantage. My fiance and I were also VERY picky when it came to buying a house. We also got an amazing deal on ours. We bought our home which has a good size property, amazing views for $160,000 and it was appraised at over $200,000. Yes, we live 45 min from town, but it was this house, or a house with a tiny lot, neighbors right next to you, and a lot smaller house to deal with. We got a great deal for our house, and we've lived here for 3.5 years now and love it, and plan on being here for another 4-7 years. So it works out for us. It all depends on what you want and what the pros and cons are for you. I know a lot of people who like renting because they don't like the hassle of having to fix up their house themselves, or do anything with the house. Renting in the area I live in is also a LOT cheaper than a mortgage as well, so there is the pro of renting when it comes to that.

csuhar

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.

This is a biggie. I bought a house and, even with the proper insurance, I was out a few thousand dollars when a pipe went bad and flooded four rooms in two floors. Then the stove bought the farm and had to be replaced. Replacing the front door cost me $2300. Bringing the railings up to safety codes set me back about $3000. Now the dishwasher pump has failed so it has to be replaced. My garage door has started trying to jump its tracks. And the asphalt driveway is STILL in the badly cratered condition it was in when I bought the house in 2011, so I'm looking at the costs to get that fixed. There is a potentially large maintenance cost associated with owning a home.

Personally, I don't feel too bad about it because I do have the money and I see it as improving my home. But it does stink when a repair bill drops into my lap that I could have just handed over to the landlord if I was renting.

As others have mentioned, there's also the issue of if you may need to move away. I'm in the military and I will be transferring to a base in another state this summer. Over my career, I can only expect to spend 2 or 3 years in any given location. I fully expect to rent for most of my time in service, especially because I don't want to be stuck with a house I'm not living in. The ONLY reason I bought this house is that it's actually always had good bones (I'm largely just updating original items from when it was built in 1984) and it's in a location that, for many reasons, is the place where I want to retire when I'm done. So if I play my cards right, charging a fair rent while I'm stationed in other parts of the country means I'll only have a few years left on my mortgage.


But it is beneficial to the tenants, too. In exchange for "helping me pay off my mortgage", the tenants get a house that is:

1) not in a hurricane evacuation zone (a big deal in Florida),
2) in a good school district
3) in walking distance of bus lines, a grocery store, a post office, and restaurants, which means you're fine if you don't have a car or cannot drive.
4) larger than many homes in the neighborhood
5) equipped with a 2+ car garage in an area most people only have room for 1 car, if that.
6) repaired and maintained at my expense.

So most of the reasons why I want to keep this house, in my opinion, benefit and apply to the tenants. But there is also the factor that I'm not renting it out as an income property. It's not about making a profit. I'm renting it out because I don't want to lose a great house while the government moves me around. Given my druthers, I would not be leaving this house in the first place.

devil_in_a_blue_dress

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.

This is a biggie. I bought a house and, even with the proper insurance, I was out a few thousand dollars when a pipe went bad and flooded four rooms in two floors. Then the stove bought the farm and had to be replaced. Replacing the front door cost me $2300. Bringing the railings up to safety codes set me back about $3000. Now the dishwasher pump has failed so it has to be replaced. My garage door has started trying to jump its tracks. And the asphalt driveway is STILL in the badly cratered condition it was in when I bought the house in 2010, so I'm looking at the costs to get that fixed. There is a potentially large maintenance cost associated with owning a home.

Personally, I don't feel too bad about it because I do have the money and I see it as improving my home. But it does stink when a repair bill drops into my lap that I could have just handed over to the landlord if I was renting.

As others have mentioned, there's also the issue of if you may need to move away. I'm in the military and I will be transferring to a base in another state this summer. Over my career, I can only expect to spend 2 or 3 years in any given location. I fully expect to rent for most of my time in service, especially because I don't want to be stuck with a house I'm not living in. The ONLY reason I bought this house is that it's actually always had good bones (I'm largely just updating original items from when it was built in 1984) and it's in a location that, for many reasons, is the place where I want to retire when I'm done. So if I play my cards right, charging a fair rent while I'm stationed in other parts of the country means I'll only have a few years left on my mortgage.


But it is beneficial to the tenants, too. In exchange for "helping me pay off my mortgage", the tenants get a house that is:

1) not in a hurricane evacuation zone (a big deal in Florida),
2) in a good school district
3) in walking distance of bus lines, a grocery store, a post office, and restaurants, which means you're fine if you don't have a car or cannot drive.
4) larger than many homes in the neighborhood
5) equipped with a 2+ car garage in an area most people only have room for 1 car, if that.
6) repaired and maintained at my expense.

So most of the reasons why I want to keep this house, in my opinion, benefit and apply to the tenants.

Your reasons are why I will NEVER buy again. Seriously. :flowerforyou:

csuhar

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.

This is a biggie. I bought a house and, even with the proper insurance, I was out a few thousand dollars when a pipe went bad and flooded four rooms in two floors. Then the stove bought the farm and had to be replaced. Replacing the front door cost me $2300. Bringing the railings up to safety codes set me back about $3000. Now the dishwasher pump has failed so it has to be replaced. My garage door has started trying to jump its tracks. And the asphalt driveway is STILL in the badly cratered condition it was in when I bought the house in 2010, so I'm looking at the costs to get that fixed. There is a potentially large maintenance cost associated with owning a home.

Personally, I don't feel too bad about it because I do have the money and I see it as improving my home. But it does stink when a repair bill drops into my lap that I could have just handed over to the landlord if I was renting.

As others have mentioned, there's also the issue of if you may need to move away. I'm in the military and I will be transferring to a base in another state this summer. Over my career, I can only expect to spend 2 or 3 years in any given location. I fully expect to rent for most of my time in service, especially because I don't want to be stuck with a house I'm not living in. The ONLY reason I bought this house is that it's actually always had good bones (I'm largely just updating original items from when it was built in 1984) and it's in a location that, for many reasons, is the place where I want to retire when I'm done. So if I play my cards right, charging a fair rent while I'm stationed in other parts of the country means I'll only have a few years left on my mortgage.


But it is beneficial to the tenants, too. In exchange for "helping me pay off my mortgage", the tenants get a house that is:

1) not in a hurricane evacuation zone (a big deal in Florida),
2) in a good school district
3) in walking distance of bus lines, a grocery store, a post office, and restaurants, which means you're fine if you don't have a car or cannot drive.
4) larger than many homes in the neighborhood
5) equipped with a 2+ car garage in an area most people only have room for 1 car, if that.
6) repaired and maintained at my expense.

So most of the reasons why I want to keep this house, in my opinion, benefit and apply to the tenants.

Your reasons are why I will NEVER buy again. Seriously. :flowerforyou:

I don't blame you. If it wasn't for the fact it's this house is a part of my retirement plans and it was a steal of a deal when the market was already bottomed out, I wouldn't have bought, either. When I bought this one, I was living in a very nice rental house that more than met my needs.

I constantly shake my head when I watch my peers max out their housing allowances (given to those of us who cannot be housed on a base) and buy houses they're hoping they can sell in a couple years without taking a loss.

verdancyhime

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.

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.

"Equity" is just a fancy way of saying you expect to indebt yourself at a later date, isn't it?
And "debt" is placing a bet that you will be able to make the monthly payments or more every month til it's paid off.

Anything can change at any time.
You can buy a house, make three years of payments on it, and then end up with a medical condition that requires expensive treatments. Your house could burn down, or the property value could be lowered by circumstances involving the neighborhood or economy. You could lose your job.

And then your money is "dead," too, and you have no place to live and a mountain of debt.

Or you could put your money into an IRA, a fund, or any number of other investments, and still keep the flexibility to leave whenever you want, and not spend money before you have it.