Quote:
Originally Posted by rfr69
You may be able to rent for lower than the cost of home ownership depending on situatin but your rent will be higher than a mortgage. It's common sense hwoever your renting from has a mortgage most likely so your going to pay their rent as well as their property taxes. People rent to make money not to lose money, for the most part that is not necessarily true in todays economy.
That said the place own for $860 per month rents for $1200 per month, my pmi and taxes are included in that $860.
Another thing and this is my biggest beef about renting. I like privacy and owning my place. I can do what I want to it when I want to without asking somebody.
I also like the privacy part. Many landlords these days want to do inspections every three months. It's understandable seeing as how some people treat rental properties but I dont like the idea that every three monthys landlord is going to come by to approve of how I'm livving and potentially come by more often for repairs or other things.
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depends on the deal and location as to which may be the better deal from a financial point. there are loads of non financial reasons for buying but financial reasons may or may not work out better.
there were properties we bought as investments that had as much as a 30% difference between renting and the costs of buying with renting being cheaper. in our area those are decent deals too as buying far eclipses the costs of renting for quite a while to come . real estate is a long term investment here in nyc . some of our properties especially those near central park really paid off eventually when we sold them but it took many years to become a profit center.
at 3% or so rent increases it took almost a decade until renting was more than owning.
i bought my first rental in 1987 2 weeks before the stock market crash. property values plunged in nyc and it took almost 10 years of rent increases until rents crossed that line.
in most decent areas its hard to break even from day one when comparing buying costs to rent.
even the building we are living in has renting the better deal. a 2 bedroom like ours is between 325-375k . just the income from that money we arent spending on buying earns more than our rent is .
even if we paid cash we would have to pay another 1k a month maintaince.
it would cost us about 12k a year more and at the typical rent increases thats a long time off before it would be cheaper to buy.
all the while the invested money is paying those rent increases and still growing more and more after covering the rent increases.
what a renter does with the down payment money and the extra each month that he is saving in the early years determines how he fares compared to buying.
when we sold our first co-op we bought back in the 1980's we bought as insiders . when we sold we had enough to pay cash for our house we bought.
the house was 169k in those days... we sold the house in the early 2,000's for 335k.
not a bad deal until you realize that the same amount of money invested in the simple mix of fidelity funds i have would have been worth 1.9 million.
subtracting out all those decades of rent i would have paid over that time frame left enough left over to buy 2 homes today...
renting can be a huge financial advantage sometimes over buying but each situation and location is different and can pan out with opposite results making buying cheaper...
if there is a rule about which financially is better it is there is no rule.each deal and location stands on its own . if your lucky and the deal works better from day 1 then thats great but if not then you have to look at your other options.
i always say buy if you want a home for all the things a home offers thats non financial.