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Old 03-16-2008, 08:14 PM
 
403 posts, read 38,522 times
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Quote:
Originally Posted by House Lady View Post
you need to look at actual facts.
Masters programs often give salaries to students because they teach lower level courses and/or participate in research. Those salaries are low, so any tax savings is significant.
I realize that you were using the rent and home price given by movingstudent, but the two were not comparable. Comparable properties, as I pointed out, will end up being a wash between buying and renting. I have "run the numbers" for many, many clients on this exact scenario, some of those were students. Most sell coming out about even. The students and parents buy knowing this. They just want to have the freedom and privacy that being a homeowner gives. It also sets up a very nice FICO score for them if they make their payments on time, which most do with automatic withdrawals.
A house in that price range is almost always going to have three bedrooms, thus three rommates are quite possible. The maintenance, as I said, for townhomes would be the exterior. You would hardly expect to find graduate students spray painting the outside or or doing any damage, and in fact, that is true. Even undergraduates (and he is going to have the luxury of approving these roommates) rarely damage property. I have rented to students since 1994 and they have been better tenants by far than some of the "families". I could tell you some stories
You are so right that he needs to look at many factors, but they need to be the real deal and include all considerations.


House Lady.........I agree with you completely. However, my experience has been that anti-buyer people will just pick whatever numbers work to prove their argument, rather than actual real numbers like you and I have much experience with. It's a losing battle with some.

I would agree however, that without knowing the area, the OP should rent for 6 months, prior to buying in order to find the perfect townhome.

Townhome = home ownership - most repair concerns that one may have with a single family home (which are very much over blown by anti-buyers) and - any yard work.
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Old 03-16-2008, 08:49 PM
 
403 posts, read 38,522 times
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Quote:
Originally Posted by saturnfan View Post
Your lifestyle governs your choice of residence option.

I for one like to relax in the pool (which I don't clean) after a workout in the gym (provided) and watch the maintenance team care for the community.
Well saturnfan, almost all townhome communities have a pool and many have a gym that their residents can use and they don't have to clean them or take care of them...............LOL

The only difference is that an owner gains equity and can do what they want inside their townhome, whereas a renter just pays the man and has to ask his permission for everything.
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Old 03-16-2008, 09:06 PM
 
Location: Cary, NC
1,036 posts, read 2,825,748 times
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Quote:
Originally Posted by SP2SCV View Post
I would agree however, that without knowing the area, the OP should rent for 6 months, prior to buying in order to find the perfect townhome.

Townhome = home ownership - most repair concerns that one may have with a single family home (which are very much over blown by anti-buyers) and - any yard work.

I agree, even though I am in the mortgage business. From my own experience... I moved to NC to attend NCSU for a PhD. My first year I rented in North Raleigh to get to know the area. I don't think I would have liked starting a degree, making friends, learning the area AND owning a home.

After I was settled in for a year I looked at my options and decided to buy a townhouse in Cary. I knew I would be in the area 3-4 years and to me the benefits of homeownership, financial and personal, were far better than the downsides. I chose a townhouse for the easier maintenance as I was still busy with school.

Not everyone would agree, its a personal choice and a free country. Some would rather rent for 100 years regardless of what the financial analysis say because they do not want the work that comes from owning. No problem, plenty of apartments out there for a reason.


In my case, I have owned for 7 years and now I have ~$30,000 in appreciation, ~$12,000 in principle paid off AND my mortgage payment has only gone up ~$40 a month since I bought (taxes and insurance). The tax benefits save me $500-1000 a year.

If I had rented, I would have $0 equity instead of $42,000 and I doubt my landlord would have kept my rent the same for 7 years. Last I heard the rent there was ~$100/month more than it was when I moved out.

So I got a hedge against inflation, an appreciating asset, tax deductions and freedom to do what I want with my home. I guess some people can lay in their apartment pools and thank their landlords, but their landlords are sitting back thanking the renters for padding their pockets year after year

The OP should take their time and not rush. Decide if the area is a good fit for you, settle into school, work on a budget and decide which path works for you.
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Old 03-16-2008, 09:25 PM
 
1,955 posts, read 3,354,893 times
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Quote:
Originally Posted by rcarrillo View Post

If I had rented, I would have $0 equity instead of $42,000 and I doubt my landlord would have kept my rent the same for 7 years. Last I heard the rent there was ~$100/month more than it was when I moved out.

So I got a hedge against inflation, an appreciating asset, tax deductions and freedom to do what I want with my home. I guess some people can lay in their apartment pools and thank their landlords, but their landlords are sitting back thanking the renters for padding their pockets year after year
If you had rented, you would have $0 in equity, but if you had disciplined yourself into investing the extra costs of homeownership (taxes, insurance, maintenance) into other places (well-diversified securities, for example), your portfolio would likely be higher than the $42,000 you have in appreciation and equity. And the brokerage fees or commissions you would have to pay to get at that money pale in comparison to the time, expense (realtors fees and buyers' closing costs - in bad markets) and hassle of selling the property. But all this assumes you would have been disciplined enough to invest those extra costs.

Do you have true freedom to do what you want with your home? Do you live in an HOA? Can you store excess furniture on your lawn, or keep broken-down cars on your property? Can you paint your house a deep purple color? Can you put a fence up by the sidewalk? Can you build an outhouse in front of the house?

As for the landlords "sitting back", I don't really buy that either. Most landlords are actually pretty hard-working people who aren't that rich when it comes down to it. A few are rich, but the majority are not. And they put in a lot of time and effort into their properties, mostly to keep people from going to the competition. It's a business just like any other. There are slumlords, to be sure, just like there are slum-owners.
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Old 03-16-2008, 09:31 PM
 
403 posts, read 38,522 times
Reputation: 89
Quote:
Originally Posted by StoneOne View Post
If you had rented, you would have $0 in equity, but if you had disciplined yourself into investing the extra costs of homeownership (taxes, insurance, maintenance) into other places (well-diversified securities, for example), your portfolio would likely be higher than the $42,000 you have in appreciation and equity. And the brokerage fees or commissions you would have to pay to get at that money pale in comparison to the time, expense (realtors fees and buyers' closing costs - in bad markets) and hassle of selling the property. But all this assumes you would have been disciplined enough to invest those extra costs.

Your argument is invalid, as it has been proven time and time again that it is cheaper to own than to rent LIKE KIND properties.
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Old 03-16-2008, 09:33 PM
 
403 posts, read 38,522 times
Reputation: 89
Quote:
Originally Posted by rcarrillo View Post
I agree, even though I am in the mortgage business. From my own experience... I moved to NC to attend NCSU for a PhD. My first year I rented in North Raleigh to get to know the area. I don't think I would have liked starting a degree, making friends, learning the area AND owning a home.

After I was settled in for a year I looked at my options and decided to buy a townhouse in Cary. I knew I would be in the area 3-4 years and to me the benefits of homeownership, financial and personal, were far better than the downsides. I chose a townhouse for the easier maintenance as I was still busy with school.

Not everyone would agree, its a personal choice and a free country. Some would rather rent for 100 years regardless of what the financial analysis say because they do not want the work that comes from owning. No problem, plenty of apartments out there for a reason.


In my case, I have owned for 7 years and now I have ~$30,000 in appreciation, ~$12,000 in principle paid off AND my mortgage payment has only gone up ~$40 a month since I bought (taxes and insurance). The tax benefits save me $500-1000 a year.

If I had rented, I would have $0 equity instead of $42,000 and I doubt my landlord would have kept my rent the same for 7 years. Last I heard the rent there was ~$100/month more than it was when I moved out.

So I got a hedge against inflation, an appreciating asset, tax deductions and freedom to do what I want with my home. I guess some people can lay in their apartment pools and thank their landlords, but their landlords are sitting back thanking the renters for padding their pockets year after year

The OP should take their time and not rush. Decide if the area is a good fit for you, settle into school, work on a budget and decide which path works for you.

BINGO!!!!

You hit the nail on the head.

Positive feedback coming at you now.
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Old 03-16-2008, 09:34 PM
 
3,021 posts, read 7,635,487 times
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Quote:
Originally Posted by StoneOne View Post
Do you have true freedom to do what you want with your home? Do you live in an HOA? Can you store excess furniture on your lawn, or keep broken-down cars on your property? Can you paint your house a deep purple color? Can you put a fence up by the sidewalk? Can you build an outhouse in front of the house?
I've rented numerous apartments & houses before. I was not able to do any of these things on my landlord's property, either. So what's the point?


You can argue back and forth on this forever. The thing is that for some people it is a better decision to buy. For some other people, it is better to rent. The OP needs to consider his finances and his future to determine which will work best for him at this point in his life.
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Old 03-16-2008, 09:46 PM
 
Location: Cary, NC
2,575 posts, read 4,449,523 times
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I saw a great little house outside of Chapel hill with lots of land if you are interested. I was interested in buy it, but decided on renting b/c my job would be too far away. PM me if you're interested. And no I'm not a realtor.
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Old 03-16-2008, 09:47 PM
 
1,955 posts, read 3,354,893 times
Reputation: 1045
Quote:
Originally Posted by MrsSteel View Post
I've rented numerous apartments & houses before. I was not able to do any of these things on my landlord's property, either. So what's the point?


You can argue back and forth on this forever. The thing is that for some people it is a better decision to buy. For some other people, it is better to rent. The OP needs to consider his finances and his future to determine which will work best for him at this point in his life.
My point is that the argument about being able to do WHATEVER you want with your home is a phony one unless you live on a lot of land, outside a municipality and outside an HOA. Zoning laws and HOAs infringe on private property rights just as much as landlords (except in the latter case, it's the landlord's property!).

I agree that for some renting is better and for some buying is better. What I don't agree with are the arguments that people favoring homeownership tend to use. The above is one of them. Another is the assumption that the equity built, appreciation and tax benefits enjoyed by the homeowner actually provide some huge advantage. Finally, and this is generally a more subtle cultural thing, the attitude that homeowners generally have about renters being 2nd class citizens is one I find troubling.
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Old 03-16-2008, 09:52 PM
 
1,955 posts, read 3,354,893 times
Reputation: 1045
Quote:
Originally Posted by SP2SCV View Post
Your argument is invalid, as it has been proven time and time again that it is cheaper to own than to rent LIKE KIND properties.
In some markets, yes, it probably is cheaper to own. And I too would argue that it would be cheaper and a better decision to own if a person planned on spending a long time in one property and wasn't disciplined enough to invest the extra costs of homeownership properly. I've got a very good article from The Economist if you're interested. I'll send it to you if you want (the moderators won't let me post it and the hyperlink requires a password).

It's very tricky talking about renting vs. buying LIKE KIND properties, as there's very little overlap in the market for the simple reason that large single family homes are simply not as efficient to rent out as apartments are. From a landlord's perspective, would you rather rent out apartments concentrated in one area or houses spread out everywhere? For the few landlords who do decide to rent out houses, the scarcity of product will naturally drive the prices higher.
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