Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
My rent increases 0% to 1% a year and the math works out that if I buy a place for $300k and stay in it for 30 years, I'll break even. Given that the current going rate for a studio in my neighborhood at the lowest is around $500k, I'm likely to be renting for a looooong time haha. If Rent Stabilization dies though that'll change things, but at the moment I pay less than people pay to split an apartment not even a block away.
LOL Seattle metro isn't quite that bad... but close. Average 1 BR rent is $1600+... 2BR $1900+... median home price $550k.
I'm in the suburbs where the 1BRs are $1300+... so it was cheaper for me to get a 3BR with 2 roommates. In 2013 when I moved in this 3BR was $1520... 2014 $1600... 2015 $1680 and just increased to $1780. My 2 roommates pay me $900 each and I just pay utilities. They save on the costs of a 1BR... and so do I. It works out great for all parties being we all work different schedules and nobody is ever home at the same time.
I refuse to be bent over by rent prices. I work in Seattle... and have to live close to work. The problem is... homes anywhere near work are unaffordable on my $50k income. So I will continue to rent... cheaply I might add. Paying upwards of 40% of my income for housing isn't gonna happen as long as I can help it.
From a financial perspective, it depends on the situation who is better off. Where I used to live, I thought it took a low-grade moron to rent over owning (unless living there for the short term), because rents were so high relative to house payments. Where I am now, while rentals are hard to find, I can kind of see the logic because house prices are high, inventory is low, and there's a more than reasonable possibility of a real estate downturn. If we get such a downturn, that would make ownership a great bargain, which right now I'd say it is not.
However, don't be deluded on one thing: property taxes and insurance. You are still paying them. You just get no choice in which insurance company is hired. Landlords calculate the rent they will require after factoring in all their costs, and most of them are pretty good at knowing what those costs are. Rest assured, you're paying for everything you get. You are spared from sudden spiking expenses such as this year's new roof or whatever, in terms of all-at-onceness, but you still pay them in a spread-out way. For example, if your place had a new roof five years ago, perhaps your rent is still reflecting the need to recoup that cost.
Plus, unless you pick a dumb type of mortgage, your house payment can't go up. Your rent can and will. I saw it the last time I was renting, when a sudden flush of demand raised our rent from about $850 to $1100 in one year, after two years of only nominal increases. Don't like it? Hit the bricks. That's exactly why we bought a house. Best thing that could have happened to us.
So no, there's no shame in it, and if you are happy renting, you ought to rent. Just let's please don't try to spin it as though you're 100% getting the best of those pitiable homeowning fools who can't do math, which is the way you come across to me. The reality is more complicated, and I'm not sure you understand everything that foes into that reality.
as a landlord I wish I could just pass on my expenses to the tenants . the market does not care if I have a mortgage and the rental next door does not or I replaced a roof or furnace .
I can only charge what the going rate is . I wish I could ask whatever I liked .
Last edited by mathjak107; 06-01-2016 at 11:59 AM..
In areas where property tends to appreciate (and I'm thinking Connecticut is one of those) they will prevail in the long term if they hang onto their houses.
It depends where in Connecticut. In Fairfield County and along Long Island Sound, sure. Hartford is a completely different local economy from the NYC tri-state region and a completely different real estate market. The Insurance Industry is the dominant employer and between consolidation, automation, and offshoring, they've lost a lot of jobs. State government is the other big employer and the state has some major budget issues. A lot of towns aren't coming close to tracking the inflation rate so buying a house isn't a particularly good investment. I have a real estate developer friend who is sitting on a bunch of land he has subdivided "one town too far from Hartford". Things never came back after the Great Recession. There is a short list of desirable towns with very good school systems in the Hartford metro area that are likely to track inflation. Simsbury, Glastonbury, and Farmington. Anything more middle class/working class than that is likely to go backwards.
Knowing what I know about that local housing market, I think renting in Hartford is the smart financial move for a single person. You'd buy if you had children and wanted to buy your way into those three towns with the really good public school systems. If you're single, it's not worth paying the staggeringly high property taxes on the more expensive housing in a snooze of a suburb. Single, I'd probably be apartment/condo rental hunting in West Hartford and the west end of Hartford if West Hartford was beyond my price point.
im happy as a home owner!! MUCH more freedom! Even when things break. The water heater just broke...i didnt have to call the landlord at 3am and ask when he was going to come fix it. Wait on him to come. Then watch him fiddle around. I just walked in Home Depot and bought one and installed it. (my dad helped too because apparently hubby cant solder).
as a landlord I wish I could just pass on my expenses to the tenants . the market does not care if I have a mortgage and the rental next door does not or I replaced a roof or furnace .
I can only charge what the going rate is . I wish I could ask whatever I liked .
And the going rate is based upon what those things cost.
I have come to the realization that I will never reasonably afford a decent home, unless circumstances change in my life (i.e. marriage, pay raises, decreased home values, inheritance, etc.). I am now 32 years old, single and earn an annual salary of $70K here in the Hartford, CT area. Around here, $70K is just average.
I just refuse to purchase something that's going to make me house poor, with high monthly payments, high maintenance costs, etc. It's just too much for a single person to bear, here in Connecticut. But I want to stay in Connecticut because I like it here and my family is here and I'm native to CT.
I am realizing all the benefits of renting. I can live a debt free lifestyle with a big amount of liquid cash in the bank (although not enough to make a down payment on a home around here). I don't have to worry about any maintenance hassle or costs. And I can leave on vacation without worrying about anything. I also have been moving a lot in my life, and have never lived in one apartment for more than 2 years.
Also, in many cases, renting allows me to have a wider choice of neighborhoods to live in, often desirable neighborhoods where real estate would simply be too expensive. And I don't have to pay any property taxes. I know technically the taxes are included in the rent, but hell, I'd rather pay $1,010 a month in rent (with heat included) than $1,400+ in a mortgage plus property taxes. Here in CT, typical property taxes are $5,000 per year for an average home. That's $417 a month!
I just feel like renting is more suitable for a single person with no children who works full time, moves very often and likes to travel often. To me, traveling the country/world is more important than owning a property, since I believe life is more about experiences than material.
From a financial perspective, honestly, I don't see how owning is really any better than renting. The first 10-15 years of a 30-year mortgage is mostly interest expense, which is throwing money out the window! That, in addition to very high CT property taxes and insurance. Again...all throwing money out the window anyway. And it gets even worse when you have thousands of dollars a year in repairs, maintenance and upgrades!
I am so happy as a renter now and I have no shame in doing it well into adulthood. Does anyone else feel the same way?
I'm older than you, single with no kids and I feel the same way. As long as your housing costs are kept to a reasonable percentage of your income, (ideally 20% or less of gross, although even 25% is probably ok), and you save and invest the difference, then I don't see any issues. The trouble renters have is they tend to have a short term mindset not just with their housing situation, but with everything...so they don't save/invest a decent percentage of their income (15% or more)....so eventually they end up being evicted. As one poster, Mathjak, has said, divorce, disability, and unemployment often prove to be the undoing of even the best tenants...so make sure you're saving/investing a solid percentage of your salary...ideally 20% or more, although 15% may be ok if you get at least a 3% 401k match.
Also, the trouble with high rent/high cost areas is you really have to watch out for those rent increases. Here in Silicon Valley, the rents have skyrocketed because they simply don't build enough housing to meet demand. I wouldn't be surprised if I am eventually forced out of here. Fortunately, I have enough of a nest egg that I could move to a lower cost area and be ok on the next egg + a part time job. But at age 32, you're probably there yet...but try to set yourself up so that you can be in another decade.
Last edited by mysticaltyger; 06-01-2016 at 09:13 PM..
Anyway, yes, of course I will continue saving up money. You never know, if in the future, I may be interested or in a financial position to purchase a home. But I am sick and tired of society and family and friends pressuring me into buying a home and the stigma that I'm "not making it in life" by renting all these years.
Honestly, you need to learn to stop caring about what other people think. Maybe it's just the people I hang with are different, but I just don't experience what you're saying. I tend to think that if you are confident and happy with your own life choices, people sense that and will leave you alone (at least part of the time, maybe not always). Otherwise, tell those people to mind their own business.
Come to think about it, I have a friend who used to sort of tell me how crazy I was to rent, and I guess I never felt it as pressure. All of the advantages to owning a home that he cited were just not important to me. So I'd say to him "I really don't care about that". Which was true. I really didn't. I never experienced it as "pressure". He never says anything about it any more.
Last edited by mysticaltyger; 06-01-2016 at 09:14 PM..
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
