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For us, buying for sure and in most situations I would think buying is best. Our mortgage on a decent size home is much less then rent would be. We also have not have many repairs/issues in the years we have owned. Plus, our house is worth about 20k more now then when we purchased 3 years ago.
Buying is much cheaper. Ten years of renting a $750 apartment will set you back $90,000 and you have nothing to show for it. 20 years $180,000 or higher with rent increases. 30 years $270,000 and you could have had the mortgage paid off by then and have property that you own and can sell worth of value rather than nothing.
Your rent could double or triple after the lease is up, your super or landlord can enter your unit when you are not there and snoop[ around and possibly steal things.
You can buy the same size condo is some places for $50K get a cheap 30 year loan and if you have a place that is well run with low HOA's you are set for life.
On average owning is way more expensive than renting, if the difference is invested. One may still want to own as a lifestyle choice, but financially it's not a winner...again, on average.
Then factor in the risks of home ownership and the constant maintenance costs and your valuable time...I've owned homes....and I may purchase again because of buying in a no tax state etc but owning is wayyyy overrated.
Oh good heavens...THIS debate again....but I'm game
The answer is it depends....on what you end up spending on the house. And the cost of renting. And are you buying COMPARABLE to what you'd be renting.
ANY cost -- ANY cost or spending you do or have because you bought counts in the bottom line which is cheaper equation. That goes for moving costs, furnishings costs, commissions, maintenance, commute, should be weighed against for example the tax break you may get. But keep in mind that tax break isn't dollar for dollar, so may NOT bring after-tax month to month costs down to or below renting. It depends on what your bought, how much you financed and your interest rate. If you look at the true cost of a home...the mortgage might be 100K, but over the course of 30 years, you've paid TWICE that in interest, which is NOT taken off your taxes dollar for dollar. And that doesn't include OTHER higher housing costs you get NO tax break for like possibly higher utilities, maintenance etc.
Is the house the same distance as your apt from work...if not add in the higher cost of a commute as part of you FINANCIAL equation as to whether buying or renting is 'more frugal." CAN you move into a house that's CLOSER to work sure you can, but what if you don't. CAN you move into a house and not spend a DIME on even curtains or hangars? Sure you CAN but most people don't.
So the answer is and always will be for the gazillionth thread on this issue: it depends. You can possibly rent for less -- and save/invest more money....or you can buy a house and month to month save less, but hopefully redirect that 'strategy' into equity you'll be paid for when you sell.
I rented a one BR aprt. in a luxury building. And COULD have bought a 1 or 2 BR condo. But I BOUGHT a 3 BR, 2 1/2 BA SFH. That I spent remodeling money on, that I bought furniture and tools for. NONE of which I would have needed in an apartment -- or perhaps even a purchased condo. Buying a home CAN be a strictly financial decision. BUT if you decide, you have to consider ALL costs which most people don't. I was very a happy in my 1 BR apt and only bought because for years the home values were sky rocketing, and the money I was saving/investing was NOT keeping up with home equity. I drove my friends crazy for MONTHS, should I buy or not? I bought because I thought in the long run it'd better financially -- but it may not be. I I have never even been underwater equity wise. And it STILL may not come out as the best move, because while the home as gone up in value...I don't know YET whether that's made up for dollar for dollar -- PENNY for PENNY, ALL my OWNERSHIP related costs....(longer commute, furniture, higher utilities, etc) in MY case...which is WHY...it depends.
If I had bought a 1 BR condo, obviously the numbers would be different. BUT I didn't want to BUY a place where I shared walls, and there were no affordable condos of the size I wanted in the location where I wanted to live.
Oh good heavens...THIS debate again....but I'm game
The answer is it depends....on what you end up spending on the house. And the cost of renting. And are you buying COMPARABLE to what you'd be renting.
ANY cost -- ANY cost or spending you do or have because you bought counts in the bottom line which is cheaper equation. That goes for moving costs, furnishings costs, commissions, maintenance, commute, should be weighed against for example the tax break you may get. But keep in mind that tax break isn't dollar for dollar, so may NOT bring after-tax month to month costs down to or below renting. It depends on what your bought, how much you financed and your interest rate. If you look at the true cost of a home...the mortgage might be 100K, but over the course of 30 years, you've paid TWICE that in interest, which is NOT taken off your taxes dollar for dollar. And that doesn't include OTHER higher housing costs you get NO tax break for like possibly higher utilities, maintenance etc.
Is the house the same distance as your apt from work...if not add in the higher cost of a commute as part of you FINANCIAL equation as to whether buying or renting is 'more frugal." CAN you move into a house that's CLOSER to work sure you can, but what if you don't. CAN you move into a house and not spend a DIME on even curtains or hangars? Sure you CAN but most people don't.
So the answer is and always will be for the gazillionth thread on this issue: it depends. You can possibly rent for less -- and save/invest more money....or you can buy a house and month to month save less, but hopefully redirect that 'strategy' into equity you'll be paid for when you sell.
I rented a one BR aprt. in a luxury building. And COULD have bought a 1 or 2 BR condo. But I BOUGHT a 3 BR, 2 1/2 BA SFH. That I spent remodeling money on, that I bought furniture and tools for. NONE of which I would have needed in an apartment -- or perhaps even a purchased condo. Buying a home CAN be a strictly financial decision. BUT if you decide, you have to consider ALL costs which most people don't. I was very a happy in my 1 BR apt and only bought because for years the home values were sky rocketing, and the money I was saving/investing was NOT keeping up with home equity. I drove my friends crazy for MONTHS, should I buy or not? I bought because I thought in the long run it'd better financially -- but it may not be. I I have never even been underwater equity wise. And it STILL may not come out as the best move, because while the home as gone up in value...I don't know YET whether that's made up for dollar for dollar -- PENNY for PENNY, ALL my OWNERSHIP related costs....(longer commute, furniture, higher utilities, etc) in MY case...which is WHY...it depends.
If I had bought a 1 BR condo, obviously the numbers would be different. BUT I didn't want to BUY a place where I shared walls, and there were no affordable condos of the size I wanted in the location where I wanted to live.
Exactly, it depends and also one must include subjective and individual value put on lifestyle considerations.
I live in new construction in Denver, so it's very easy to compare apples to apples. Comparable homes in my neighborhood rent for $500 more per month than my mortgage including insurance and HOA. And since it's new construction, my maintenance costs are minimal to nil at this point. Sure, that will change a bit over time, but I have plenty of time to save up for that because I can save and invest the difference between my mortgage and what I'd otherwise be paying in rent.
I live in new construction in Denver, so it's very easy to compare apples to apples. Comparable homes in my neighborhood rent for $500 more per month than my mortgage including insurance and HOA. And since it's new construction, my maintenance costs are minimal to nil at this point. Sure, that will change a bit over time, but I have plenty of time to save up for that because I can save and invest the difference between my mortgage and what I'd otherwise be paying in rent.
Sounds like a good deal! Every case is different and people's preferences and values are different. It's not necessarily just a monetary decision. Some folks hate house maintenance, yard work, etc and would rather spend the weekend traveling. If you get transferred in six months to Chicago or if one of a few thousand other low odds things happen , the whole situation will look different.
I live in new construction in Denver, so it's very easy to compare apples to apples. Comparable homes in my neighborhood rent for $500 more per month than my mortgage including insurance and HOA. And since it's new construction, my maintenance costs are minimal to nil at this point. Sure, that will change a bit over time, but I have plenty of time to save up for that because I can save and invest the difference between my mortgage and what I'd otherwise be paying in rent.
How much down payment are you assuming and what rate of return do you think you could get if you rented and invested it?
For us, buying for sure and in most situations I would think buying is best. Our mortgage on a decent size home is much less then rent would be. We also have not have many repairs/issues in the years we have owned. Plus, our house is worth about 20k more now then when we purchased 3 years ago.
We've been in our house just under 3 years and it's worth about $200K more than we paid for it. That is the only reason buying was better than renting from a financial perspective. A $20K gain wouldn't even cover the cost of selling it.
How much down payment are you assuming and what rate of return do you think you could get if you rented and invested it?
I put 20% down, and I can't guarantee any return if I invested it - my 401K still hasn't recovered from the past few years, so I am only too aware of that! What I can guarantee is that my home will be paid off in retirement, so even if there is no appreciation of value, I will still have a very low cost place to live. Taxes and maintenance will be no where near what it would cost to rent.
how could your 401k not have recovered unless you actually did the wrong thing and bailed or timed things ?
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A $20K gain wouldn't even cover the cost of selling it. 
