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Old 06-05-2010, 01:13 PM
zox
 
344 posts, read 336,650 times
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Quote:
Originally Posted by shiphead View Post
I say if you want to buy, rent for two years in a specific area of Phoenix. If you like an area, but a home. Most of the apartment complexes out here are ....

a.)Expensive enough where it would make more sense to use that rent towards a mortgage
b.)Slummy enough that you are sick of it and want to move into your own place. To make sure things are done right.

Who the hell can afford 1500-3000 a month in rent? On 9.00 x 92 hrs i sure can't
You are not limited to apartments in the $1500-$3000 range because there are cheaper options. However, for the sake of argument, let's assume that is the case. Algia and Azriver have already discussed the additional costs of owning a home. Those costs are substantial. When owning a home, you are not just paying a lease. It's not a true apples to apples comparison. A $1500 mortgage is not the same as a $1500 rent payment. In addition to the aforementioned costs, you will also be required to place a down payment on a home which would likely be $10,000 or more. How are you going to put a down payment on a home if you can't even afford to rent an apartment? The apartments you alluded to are premium apartments that include many amenities and a nice location. If you are leasing a home for less than that, you are likely living in a smaller older home in a less desirable area.
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Old 06-05-2010, 01:18 PM
 
Location: Anchored in Phoenix
1,942 posts, read 3,676,286 times
Reputation: 1753
There are certainly beautiful upscale apartments and great community events at some apartments in the Valley. It would be hard for me to get used to living in a SFH neighborhood when I buy. I will have to think hard and decide if I will miss the carefree lifestyle of apartment living. Was a mortgage payer for awhile and I was bored with the neighborhood. Then I felt so much freedom with six month leases after I returned to being a renter.

This Fall my lease expires, and I'm thinking of going more upscale in apartments. I am thinking of moving back to Scottsdale!

Quote:
Originally Posted by azriverfan. View Post
In Europe and Asia, many people rent and it's perfectly acceptable. In this country, it's looked down upon to rent. There are a lot of benefits to renting which you named. You don't have to pay for appliances, maintenance, property taxes, HOA fees, home warranty and home insurance. If you remove the stigma of renting, it's actually a pretty good deal. Most apartments in Arizona are fairly upscale that offer swimming pools and little gyms. They come with appliances like a refrigerator and in many cases washer and dryers. If anything breaks down, the apartment services it. The apartment pays for the lawn and upkeep. The apartment will pay for security by providing a gate if they have one. Many apartments have their own concierge service and a free computer in their little conference room/business office for people to use. The only downside to renting is the lack of prestige but other things should take priority over prestige like not having to declare bankruptcy. People just don't think and in their small minds, the word Rent=inferior and Own=superior. They don't break it down and think of all the costs involved with owning a home
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Old 06-05-2010, 01:31 PM
 
10,720 posts, read 16,313,630 times
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Quote:
Originally Posted by shiphead View Post
Who the hell can afford 1500-3000 a month in rent? On 9.00 x 92 hrs i sure can't
Try again, this is Phoenix not NYC! Average rents here range from $500 to $1300. I have no idea where you got your information. Mark Taylor is probably the most luxurious apartment chain in the Valley, and their rents average between 800 for their smallest 1 bedroom to the 1300 for their largest 3 bedroom. And we are talking about a high end luxury apartment. There are plenty of average apartments that are a lot cheaper than that.
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Old 06-05-2010, 01:52 PM
 
Location: Casa Grande, AZ (May 08)
1,474 posts, read 3,218,762 times
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Zox,azriver and others -

Though you make valid points in many areas - I have seen alot of discussion about the additional COSTS of owning vs renting, but dont forget that at least some of those costs are often mitigated with the tax savings you get with a mortgage deduction. In my case almost all my "hidden costs" (hoa, maintenance, unexpected repairs etc) are more than covered by my annual tax deduction.

Also, there was talk about interest rates going up and that will lower values. Well, the REASON that interest rates would go up (and Im not disagreeing they will - although it sure seems a ways out there right now) is due to INFLATION, which will in turn make commodities used to build homes and other things MORE expensive, not less. As such, although without wage increases some people may not be able to afford a home that can now, those that can will very possibly pay MORE since builders will have higher materials and labor costs. Now, I grant you that inventory will take awhile to whittle down from current levels in SOME places (others its already getting slim), I dont think there can be much question that in the long run we are currently NOT building enough new housing to cover general population increases.

Finally, though the nice amenities and less "labor" in renting a nice apt are valid points for many, some like myself do not like having (in many cases) hundreds of nabors that I know nothing about that move in and out etc. Though not completely mitigated in a SFR neighborhood, in general they are more stable and have less "nuisance" activity. Ask any cop where they spend most of their time on calls for service and they will always point to the apartment complexes, even the nice ones.

In the end, for me and I think many, (and I have posted this on many occassions), home MONETARY value is only one aspect of my decision to choose ownership vs renting. The many intangibles, tax breaks, and the fact that EVENTUALLY it will be worth more than I owe (I dont see homes going to ZERO), and the costs are relatively comparable, and I can afford it (which I agree with you guys totally on), and its a place I want to LIVE, there can definetely be a case made to buy at almost ANY time. Many people want to establish roots for their family/children etc and dont want to take the chance they may be forced to move etc. Each person is different.

Not saying you guys are wrong for sure on the value side of things (though I dont think its quite as doom and gloom as some here suggest), but just want to point out there can another side to some of the points you make.
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Old 06-05-2010, 02:14 PM
 
123 posts, read 288,962 times
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Excellent post and valid points!
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Old 06-05-2010, 02:15 PM
 
123 posts, read 288,962 times
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.
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Old 06-05-2010, 02:22 PM
 
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Sometimes general articles and answers are just ridiculous. It's all about neighborhoods in Phoenix; you can't make generalizations. I know for a fact that areas of Scottsdale, N. Phoenix (85254, 85028, 85258, 85260, etc.)....it's almost certainly better to buy than rent...if you find the right place for the right amount (and that's not easy to do). There is a huge lack of rentals in this area and rental prices have really skyrocketed due to all of the people foreclosing and looking to rent (who have money). I know several people who have given up looking at rentals in the area because they go so quick. If you have the down payment, plan to stay for a good 5-10 years, you'd be a moron not to buy in nicer areas of the Phoenix/Scottsdale market (up to a price of say $750k..above that..prices are still falling). Thus, it's about areas...you can't make generalizations.
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Old 06-05-2010, 03:42 PM
zox
 
344 posts, read 336,650 times
Reputation: 175
Quote:
Originally Posted by sh9730 View Post
Zox,azriver and others -

Though you make valid points in many areas - I have seen alot of discussion about the additional COSTS of owning vs renting, but dont forget that at least some of those costs are often mitigated with the tax savings you get with a mortgage deduction. In my case almost all my "hidden costs" (hoa, maintenance, unexpected repairs etc) are more than covered by my annual tax deduction.
The cost of a down payment exceeds the savings from the deducted interest on a loan in the short term. The down payment alone on a new home can pay for an apartment lease for 2-3 years. How many people can honestly afford to put 40 thousand dollars on a home right now? Apartments also offer incentives on long term leases such as 2 months rent free on a two year lease. Owning is only a better option if the buyer has financial and job security and can afford the down payment.
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Old 06-05-2010, 03:50 PM
 
Location: Casa Grande, AZ (May 08)
1,474 posts, read 3,218,762 times
Reputation: 1149
Zox - cmon - there are still many loans available that offer low(er) down payments, especially on the lower end. Using an FHA loan and buying a 250K house (even in the nicer areas of gilbert/chandler etc that is doable right now) you need only come up with 3.5% plus closing (if you cant get the seller to contribute to those). That is only 8750.00+ closing (maybe a total of 15K max). And even some of those points and costs are deductible in the year they are used so that mitigates them.

But, the main point of my post was that while there are arguments to be made for some to rent instead of buy, that doesnt mean there are NO arguments to be made for others TO buy.

Anyway, off to d-backs game.
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Old 06-05-2010, 04:07 PM
 
123 posts, read 288,962 times
Reputation: 64
Quote:
Originally Posted by Skywayy2001 View Post
Sometimes general articles and answers are just ridiculous. It's all about neighborhoods in Phoenix; you can't make generalizations. I know for a fact that areas of Scottsdale, N. Phoenix (85254, 85028, 85258, 85260, etc.)....it's almost certainly better to buy than rent...if you find the right place for the right amount (and that's not easy to do). There is a huge lack of rentals in this area and rental prices have really skyrocketed due to all of the people foreclosing and looking to rent (who have money). I know several people who have given up looking at rentals in the area because they go so quick. If you have the down payment, plan to stay for a good 5-10 years, you'd be a moron not to buy in nicer areas of the Phoenix/Scottsdale market (up to a price of say $750k..above that..prices are still falling). Thus, it's about areas...you can't make generalizations.
True, real estate is very local and it really depends on the price range and location. The low end is pretty much bottomed out but the high end and luxury homes have a way to go overall before bottoming. I don't see prices under 250K going much lower. In fact, in Scottsdale and N. Phx prices in the low/starter range for SFH has risen in the past year.
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