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Same goes for a condo. The main job is carrying recycling and compost stuff downstairs every so often, because my floor only has a garbage chute. Otherwise....nothing, ever.
1) Once you take property taxes and maintenance into account, it's cheaper. As far as that 'home is your biggest investment' shtick, yes and no. A home a great investment if you're willing to spend lots of time and energy on a house that you snag at below market value. Otherwise, the value of your home will appreciate at roughly the rate of inflation. Now that we're in our fifties, we just don't feel like doing that anymore. We have other things to do.
Even if it's cheaper in absolute terms, there is a hassle involved.
My last apartment rental had an inefficient HVAC system. Being on the second floor with westerly facing windows compounded the problem - even with blackout curtains, some heat from the hottest part of the day was bound to get in.
The heat pump struggled to keep the place even at 72 - it just ran continuously. Want it at 70 or below to sleep? Good luck. I called the landlord numerous times - they said it was working "normally." Granted, the heat pump was not much bigger than a large microwave, but the apartment was only 900 sq ft.
If I owned the unit, I could get a second contractor to look at it if I wanted another opinion, or simply get a replacement if the unit was not repairable. As a renter, I'm completely the mercy of the landlord.
I love how people consider renting "throwing your money away" yet they totally discount the additional costs (above renting) of home ownership. I live in HIGH PROPERTY TAX Texas where the taxes are anywhere from 2.5%- 4.5% of the total value of the house and they are due annually. So, a $400k house at a 3.5% tax rate costs you $14,000/ year in taxes. That is $140,000 in a ten year span just in non-refundable property taxes (assuming they don't value your house higher) and I haven't even included other non-equity costs (insurance, interest on your loan, maintenance fee if in a community, realtor costs, etc. etc. )
Renting keeps you very lean, allows you to live in more desirable locations for less money (less commute), gives you more flexibility, and allows you to invest the EXCESS money you save per month in HIGHER RETURN INVESTMENTS over that 10 year span.
each situation is different and you need to look long term. We rented for many years did nothing for our net worth. We've owned for a year and half and our net worth has climbed a pretty amazing amount just for living.
My parents bought their house for $75k 25 years ago. Today its worth around $300k and has been paid off for many years. To rent it would likely be about $2,200ish instead they only pay about $500 in taxes. I honestly have no idea how they'd be able to afford $2,200 in rent. I've actually looked at a hypothetical situation where they rented and invested the difference, but had to take into consideration that rents went up and eventually they could invest the savings of owning vs renting. The number ended up being pretty amazing like a difference of $1,000,000 with owning being a much better use of money over renting taking them to age 75.
Note.. my father and I are both very handy and know how to shop for deals. I can completely do over a bathroom for $500, my inlaws are not handy and will pay a plumber $500 to come in and change the faucets on 2 sinks. IF YOU'RE NOT HANDY YOU PROBABLY SHOULDN'T OWN A HOME.
I love how people consider renting "throwing your money away" yet they totally discount the additional costs (above renting) of home ownership. I live in HIGH PROPERTY TAX Texas where the taxes are anywhere from 2.5%- 4.5% of the total value of the house and they are due annually. So, a $400k house at a 3.5% tax rate costs you $14,000/ year in taxes. That is $140,000 in a ten year span just in non-refundable property taxes (assuming they don't value your house higher) and I haven't even included other non-equity costs (insurance, interest on your loan, maintenance fee if in a community, realtor costs, etc. etc. )
Most people aren't paying anywhere near 3.5% property tax on their home. I live in Houston and my effective property tax rate is just under 2%. Then to be accurate you have to figure out the net cost which would include the potential federal income tax liability reduction. There is a cost but you should be accurate with the situation
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Renting keeps you very lean, allows you to live in more desirable locations for less money (less commute), gives you more flexibility, and allows you to invest the EXCESS money you save per month in HIGHER RETURN INVESTMENTS over that 10 year span.
What you are describing is possibilities not facts for every rent/buy scenario
I love how people consider renting "throwing your money away" yet they totally discount the additional costs (above renting) of home ownership. I live in HIGH PROPERTY TAX Texas where the taxes are anywhere from 2.5%- 4.5% of the total value of the house and they are due annually. So, a $400k house at a 3.5% tax rate costs you $14,000/ year in taxes. That is $140,000 in a ten year span just in non-refundable property taxes (assuming they don't value your house higher) and I haven't even included other non-equity costs (insurance, interest on your loan, maintenance fee if in a community, realtor costs, etc. etc. )
Renting keeps you very lean, allows you to live in more desirable locations for less money (less commute), gives you more flexibility, and allows you to invest the EXCESS money you save per month in HIGHER RETURN INVESTMENTS over that 10 year span.
There are plenty of states with much lower property tax rates, and much lower home prices. In my county, it's about .5%-.7% of the total value of the house, and our home prices are much less on average.
I love how people consider renting "throwing your money away" yet they totally discount the additional costs (above renting) of home ownership. I live in HIGH PROPERTY TAX Texas where the taxes are anywhere from 2.5%- 4.5% of the total value of the house and they are due annually. So, a $400k house at a 3.5% tax rate costs you $14,000/ year in taxes. That is $140,000 in a ten year span just in non-refundable property taxes (assuming they don't value your house higher) and I haven't even included other non-equity costs (insurance, interest on your loan, maintenance fee if in a community, realtor costs, etc. etc. )
Renting keeps you very lean, allows you to live in more desirable locations for less money (less commute), gives you more flexibility, and allows you to invest the EXCESS money you save per month in HIGHER RETURN INVESTMENTS over that 10 year span.
are you serious?? That's like New Jersey. I thought Texas was supposed to be cheap. Well I guess the $400k house in Texas is way bigger and nicer.
I'm pretty neutral on home ownership, 8 years in. I never had to spend my weekends at Apartment Depot when I rented.
We upgraded the shower head and kitchen faucet in our rental. If and when we leave we can always put the old ones back in though I doubt we'll bother. Oh yeah had to install blinds too. Those are definitely staying. There's a certain amount of upkeep for rentals but nowhere near what it would be for a house.
Buying a house is better in the long run financially. You eventually pay off your home and rents never end. Really the best thing to do is buy a house in cash, if possible.
I personally am thinking about saving up to buy a cheap little house out in the country somewhere, instead of renting.
With renting, you have to deal with neighbors right around you. Less privacy. Then there are rules you have to follow. With a house, it's your own piece of property and you're free to do whatever you please with your house. That is, if you don't live in a deed restricted area.
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