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Hands down owning is cheaper for us. First of all our relocation package paid for the real estate fees. Secondly, had this relocation package for a full year when the housing market hit rock bottom (2012)... it afforded us the luxury of both timing the market and saving for 11 months for substantial down payment. We put in an offer at week 50 Within 6 months our home values shot up $50k. Now in 2015 and identical unit to ours went pending after 48 hours on the market. It's listed at $130k more than what we paid. Meanwhile rents have sky rocketed. While we paid $1850 in 2012, the same apartment will cost $2300... $300 more than our mortgage/HOA.
But as others have mentioned, too many variables to make blanket statements. The reverse was true for us when we lived in a different region of the country. We also just lucked out with the timing of everything.
in MOST CASES (not all markets.... Some have too many rental properties and it's cheaper than buying... This equalizes in time) you ARE paying for all these expenses.... It's just in one big check every month called "rent" (+ profit to the homeowner)
Otherwise there would be no landlords!
This is a point I always try to make to people who are like well I don't pay for maintenance, property taxes, etc. Granted by renting you maybe don't have to go buy a lawnmower and hoses and what not but if you were actually getting ahead by renting like you said nobody would own property.
I rent my place out for $1200 a month, though honestly I could probably get $1300 or even $1400 but I have a good tenant who pays rent on time and is long term so I'm happy with it. My mortgage is $740 and includes insurance and property taxes. I'm getting all my expenses paid plus making a couple hundred every month so I feel I have it better than my renters.
Depends. Some people are not inclined to make the commitment to do what is necessary to maintain the value of their property. It also depends on the likelihood that you will remain in the same place most of your life.
My sister bought a mobile home about 20 years ago, when her kids were grown and that was all she needed. She is paying more for the lot to park it on, than I pay for rent on an apartment. Plus all the maintenance and upkeep. And the market value of the mobile has now declined to zero. If she ever moves, all she can do is walk away from it, and somebody will sue her for the cost of hauling it away. She can't even sell it for a dollar to a homeless family, because they wouldn't be able to afford the lot rental and would probably be declined by the park management anyway.
Depends. Some people are not inclined to make the commitment to do what is necessary to maintain the value of their property. It also depends on the likelihood that you will remain in the same place most of your life.
My sister bought a mobile home about 20 years ago, when her kids were grown and that was all she needed. She is paying more for the lot to park it on, than I pay for rent on an apartment. Plus all the maintenance and upkeep. And the market value of the mobile has now declined to zero. If she ever moves, all she can do is walk away from it, and somebody will sue her for the cost of hauling it away. She can't even sell it for a dollar to a homeless family, because they wouldn't be able to afford the lot rental and would probably be declined by the park management anyway.
She decided to do the worst of both worlds.
If she had bought LAND and parked her "item of movable property" (which is what it is) on it.... The land atleast would be salable.
Depends. Some people are not inclined to make the commitment to do what is necessary to maintain the value of their property. It also depends on the likelihood that you will remain in the same place most of your life.
My sister bought a mobile home about 20 years ago, when her kids were grown and that was all she needed. She is paying more for the lot to park it on, than I pay for rent on an apartment. Plus all the maintenance and upkeep. And the market value of the mobile has now declined to zero. If she ever moves, all she can do is walk away from it, and somebody will sue her for the cost of hauling it away. She can't even sell it for a dollar to a homeless family, because they wouldn't be able to afford the lot rental and would probably be declined by the park management anyway.
Buying a home on a rented lot is renting not buying. You are not buying land you are buying a vehicle that can't be moved because it will become worthless and not park will take the eyesore.
All you can advise her to do is get all her neighbors to put in bad reviews to warn others, Eventually when tenants die and they can't sell the old properties because the lot rents are too high they will have to so something about it.
When house prices were collapsing, renting was more frugal. Otherwise it depends on the rent/buy ratio and how long you can stay there.
However now, even with rents shooting up I have my suspicions that it's still more frugal to rent when a basic fixer upper of a starter home is pushing $600K.
When house prices were collapsing, renting was more frugal. Otherwise it depends on the rent/buy ratio and how long you can stay there.
However now, even with rents shooting up I have my suspicions that it's still more frugal to rent when a basic fixer upper of a starter home is pushing $600K.
Yes it depends what part of the country you are in. IF it's too expensive to buy you have no choice but to rent.
My father bought a home in the mid 70s for what a car costs now. His mortgage of around $300 was tough to meet back then, but 30 years later and about $350 due to insurance going up it was nothing. Unfortunately it's a fair neighborhood so it's only worth about 4 times what he paid for it. But it definitely cheaper for someone to buy his house than to rent a 3 bedroom 1 bath home in his area.
I think for many seniors, it's more frugal to rent, especially low-income seniors who can get into low-rent senior subsidized housing.
For instance I know a senior who makes about the same income I do, and she really wants to buy a mobile home in a park (discussed above). She'll use up her savings, have to pay for her own maintenance, and will have park fees she can't rely on staying the same, etc.
In subsidized senior housing, her rent would probably just stay the same percentage of her income.
There are trade-offs either way. But, as far as one costing less than the other, renting an apartment would be less costly. IMO.
I agree with Lacerta about how to decide when to rent or buy, for someone who is not a senior - buying a home is normally a long-term investment, and buyers need to be realistic about the real total costs.
I think for many seniors, it's more frugal to rent, especially low-income seniors who can get into low-rent senior subsidized housing.
For instance I know a senior who makes about the same income I do, and she really wants to buy a mobile home in a park (discussed above). She'll use up her savings, have to pay for her own maintenance, and will have park fees she can't rely on staying the same, etc.
In subsidized senior housing, her rent would probably just stay the same percentage of her income.
There are trade-offs either way. But, as far as one costing less than the other, renting an apartment would be less costly. IMO.
I agree with Lacerta about how to decide when to rent or buy, for someone who is not a senior - buying a home is normally a long-term investment, and buyers need to be realistic about the real total costs.
I wouldn't say owning vs renting where someone else covers the majority of the rent is a direct correlation (although an option for some through use of taxpayer monies.)
In my case owning was much cheaper in the long run, small house, paid off in under 10 years and not made a mortgage payment for another 10, low heat and electric bills. This has allowed us to live on much less than we make and save the rest.
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Within 6 months our home values shot up $50k. Now in 2015 and identical unit to ours went pending after 48 hours on the market. It's listed at $130k more than what we paid. Meanwhile rents have sky rocketed. While we paid $1850 in 2012, the same apartment will cost $2300... $300 more than our mortgage/HOA. 
