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Did someone just argue that renting is smarter than buying...oh boy...
rent if you cant afford or if you plan on only being there a year or 2..Other than that, I don't see any long term benefits.
"smarter than buying" Sometimes it is, sometimes it is not...
There was no argument. We have bought about 5 homes and rented maybe 10 times...
Not sure what that meant at all, but besides the examples that I gave, it's not smarter..Ever...If it is, tell me how please? You aren't putting equity towards anything..And for the most part, renting is just as much as a house payment. But with a house payment, you're actually acquiring something of value that's yours.
Last edited by Poncho_NM; 02-06-2015 at 12:22 PM..
Not sure what that meant at all, but besides the examples that I gave, it's not smarter..Ever...If it is, tell me how please? You aren't putting equity towards anything..And for the most part, renting is just as much as a house payment. But with a house payment, you're actually acquiring something of value that's yours.
That is a very simplistic view. There are many cases when its smarter to rent. Especially when you plan to stay somewhere under 5 years.
The equity you are building up in the short term often won't cover closing costs/commissions, etc that come in to play when buying.
Not sure what that meant at all, but besides the examples that I gave, it's not smarter..Ever...If it is, tell me how please? You aren't putting equity towards anything..And for the most part, renting is just as much as a house payment. But with a house payment, you're actually acquiring something of value that's yours.
Tell that to all the people who bought in 2004, 2005...
I sold the last house I owned in 2005. I have rented since then. I put money to work in the stock market in early 2009, money that I took out of my last house, along with all of my other savings. I was able to retire in my mid 50s a year ago, something I thought (in 2005) that I would not be able to do until my mid 60s...
In most of the country, it has been far 'smarter' to rent for the last 9+/- years, especially if you took the money you had in a house if you were fortunate enough to have sold pre-crash, or if you had taken the cash you planned to put towards a house and invested it elsewhere. Are there exceptions? Sure, for hot pockets like NYC or SF, but for the vast majority of housing markets, renting has trumped home ownership for almost a decade, and for ABQ, this trend looks to be continuing indefinitely.
As for your statement that "renting is as much as a house payment," which is frankly incorrect for most markets even if the discussion ended there, you are missing the point that the cost of ownership is far more than a house payment. The cost to buy and sell a house, the cost to insure, the cost to maintain and repair a house, and the cost of property taxes, all factor into home ownership. In a declining or even flat market where houses don't even keep up with nominal inflation, the cost to own a house exceeds the cost of renting, and the opportunity cost of having cash and equity tied up in such a home is detrimental to your overall financial well being.
Last edited by Westbound and Down; 08-01-2014 at 07:34 AM..
Exactly my thoughts Westbound and Down. My wife and I have been renting since the spring of 2010 and may never (I know...never is a long time) buy a house again. Ever.
I bought a house in 2009 for $155k (severely dilapidated)in Old Town. Remodeled it entirely. Everything is new except for the walls. Expanded it from 1100 sq ft to nearly 2500 sq ft. Remodel costs were $104k. Total in, $259k. It is worth $348k today.
So, no it is not ALWAYS better to rent in Alb current market.
I bought a house in 2009 for $155k (severely dilapidated)in Old Town. Remodeled it entirely. Everything is new except for the walls. Expanded it from 1100 sq ft to nearly 2500 sq ft. Remodel costs were $104k. Total in, $259k. It is worth $348k today.
So, no it is not ALWAYS better to rent.
First, nicely done. However...
I never said "always." There are ALWAYS exceptions.
Since early 2009, my net worth has more than doubled due to the risks I took with my money in the stock market. Timing is everything, be it in real estate or in other investments.
And there are plenty of people who bought houses in ABQ in 2009 who have found they can't sell it for little more and maybe not anymore today than they paid for it and put into it. For example: i looked at a house to buy a few months ago located in highly desirable Spruce Park.Approx 50 years old, completely renovated in 2004 with a very nicely done master suite put in the top floor attic space. The guy who bought it in 2004 paid $425k for it, and I estimate he spent an additional $100k. He tried to sell it from 2007 onward with an asking price of $595k, finally sold it in late 2009 to someone for $350k, and I am pretty sure that buyer thought they had "stolen" it. That buyer put in a forced air a/c system for $20k, plus had other ongoing maintenance expenses but did not do a great job of maintaining the house, so say total amount in improvements of $370k. The house in April of 2014 was listed for $425k, where it had been on the market for the same price since last August. i told my buyer agent that while I liked the house, it wasn't worth more than $380k to $390k (I had all the sales comps and did an "appraisal" for my own use), and to me it wasn't worth more than around $360k because of deferred maintenance (needed paint exterior, lots of rotten wood, a new front entry landing, and needed replacement of the ancient boiler system for the baseboard heat), and I passed because I didn't want to get into a protracted back and forth and felt it unlikely I would get my price. I see that it sold in June for $385k...I was right on the button for "market value," but do some math and you will concur that the first owner lost a lot of money over a 5 year holding period (yes, the market crashed in his holding period), and the most recent seller also "lost" money after closing costs, again a 5 year holding period.
And you have to admit that what you did is pretty darned atypical; most people don't buy a dilapidated house and more than double it in size, etc. You took a risk, and the market has rewarded you for your risk. Chances are if you had bought the house in the same condition in 2005, the price would have been significantly higher - I am curious, what was the sales and offering history of the house? Was it an estate sale? Or had it been offered at a higher price in prior years? Was it a distress sale?
What do you base the "worth $348k today" on? Assessment? Have you had it appraised? Did someone make you an offer? Just curious...the appraiser in me wants to know.
And you have to admit that what you did is pretty darned atypical; most people don't buy a dilapidated house and more than double it in size, etc. You took a risk, and the market has rewarded you for your risk. Chances are if you had bought the house in the same condition in 2005, the price would have been significantly higher - I am curious, what was the sales and offering history of the house? Was it an estate sale? Or had it been offered at a higher price in prior years? Was it a distress sale?
What do you base the "worth $348k today" on? Assessment? Have you had it appraised? Did someone make you an offer? Just curious...the appraiser in me wants to know.
It was a house that was vacant for several years. It was part of a probate fight and after probate was finally over the family was trying to get it sold before the city issued an order to demolish. I bought it for the land mostly. Using the house as a remodel also saved me on impact fees from building new. Yes, I have had it appraised. I'm in the construction business and have all the tools afforded to know the value of my house. There have been several homes in our immediate area sold in the last few months that support the appraised value.
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