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For total cost of home ownership, renting is cheaper.
No.
We've gone over this over and over again. If it was, then landlord's would go out of business. Instead, real estate is one of the best ways to become wealthy. Long-term, it is much better financially to own. The longer we are talking about, the better owning is.
If for no other reason than the mortgage stays the same and then stops, owning is better. Renting only goes up in cost and NEVER stops. Even if you don't take into account selling the home, you are better off owning.
It is very basic math. If the landlord is paying for EVERYTHING you would have to pay for to own and still coming out ahead, you are paying more than owning.
You can talk about repairs, maintenance, roof replacements, vacancy, real estate taxes, closing costs, and on and on all you want, but guess what, the landlord pays for all those AND STILL COMES OUT AHEAD.
Yes, there are specific exceptions, but the vast majority of people will be better off owning.
I can understand that, especially with not knowing where your kids will move to. I don't have any family that I am close to, so mobility is less of an issue.
My concern is, let's say I buy a nice 1-BR 1-BA condo in Boulder, and next year my eldest daughter wants to attend CU Boulder instead of UW in Laramie (my kids are 18, 16, 14, 13) ... I'll regret not having another BR. Or let's say I buy a 3 BR SFH, and never need BR's #2 and #3 ("too much house") ... too many unknowns at present, which should resolve/clarify in the next two years.
For total cost of home ownership, renting is cheaper.
Not for me. My mortgage costs less than what it would cost to rent a room in someone's house in this area. I could rent a room and come out $150 a month ahead on my mortgage. To rent a home like mine it would cost 2 and a half times what my mortgage is.
We've gone over this over and over again. If it was, then landlord's would go out of business. Instead, real estate is one of the best ways to become wealthy. Long-term, it is much better financially to own. The longer we are talking about, the better owning is.
If for no other reason than the mortgage stays the same and then stops, owning is better. Renting only goes up in cost and NEVER stops. Even if you don't take into account selling the home, you are better off owning.
It is very basic math. If the landlord is paying for EVERYTHING you would have to pay for to own and still coming out ahead, you are paying more than owning.
You can talk about repairs, maintenance, roof replacements, vacancy, real estate taxes, closing costs, and on and on all you want, but guess what, the landlord pays for all those AND STILL COMES OUT AHEAD.
Yes, there are specific exceptions, but the vast majority of people will be better off owning.
real estate is a long term investment . there are many many desirable areas where landlords have to pay their dues for quite a few years as a new investor before seeing positive cash flow . many times it is just the depreciation allowance that carries the property without going to much into the negative .
i think our kew gardens rental in queens took 5 or 6 years to turn positive back in the 1980's when we bought it ..
with mortgages at 8% our costs were 1250 a month ... the top rent was 850 at the time . the depreciation allowance carried us for years .
Are you okay with renting or do you get sad about it sometimes?
I feel a bit sad about it. Well, I will because I'm moving. When My husband and I rented a nice townhouse, the landlord decided to sell. Since we had to find a place in a hurry, we ended up in a different townhouse in the area which happened to be owned by an out-of-state slumlord. It took me two full days to scrape the crud out of the ancient refrigerator. After cleaning the hell out of the place for three months, I finally started to relax.
I don't like renting, but sometimes it's the only option.
Not for me. My mortgage costs less than what it would cost to rent a room in someone's house in this area. I could rent a room and come out $150 a month ahead on my mortgage. To rent a home like mine it would cost 2 and a half times what my mortgage is.
So if you say that as an absolute it's wrong.
Well, I don't think there are any absolutes... but when you're calculating the costs, are you also including property tax, HOA fees (if you have them), closing costs, and regular/annual maintenance? Because if I go JUST on the mortgage payments, that could be true here too. But if I add in all of those other factors, it gets way more expensive than renting!
Well, I don't think there are any absolutes... but when you're calculating the costs, are you also including property tax, HOA fees (if you have them), closing costs, and regular/annual maintenance? Because if I go JUST on the mortgage payments, that could be true here too. But if I add in all of those other factors, it gets way more expensive than renting!
I did add in property tax and homeowner's insurance that's part of my mortgage and it's still less than renting a bedroom in someone's house. But there are other costs and when I lived in the northeast if you rented an apartment it was standard to pay first month, security and last month so you pay three times rent just to get in. Also it's up to you to buy in a lower cost area if you can't afford the more expensive areas. that's what I had to do. I also bought in SW Florida and my property taxes only went up $15 this year, the only expensive thing here is the homeowner's insurance, but I got storm shutters for the windows and a wind mitigation report and it dropped 33%.
I have zero regrets about buying a house. I only regret renting for over 20 years.
Well, I don't think there are any absolutes... but when you're calculating the costs, are you also including property tax, HOA fees (if you have them), closing costs, and regular/annual maintenance? Because if I go JUST on the mortgage payments, that could be true here too. But if I add in all of those other factors, it gets way more expensive than renting!
Of course, I mean to imply all costs when I say "mortgage", including PMI insurance if needed. Financial experts say to expect to pay between 1% and 2% for home maintenance (on average). For a $ 150,000 SFH in my area (you can get a house for that but the lot would be very small), that would be less than a condo fee (not including any special assessments, either).
I am no real estate expert, I can only speak for my area, and it is cheaper to buy here than rent. The exception would be condos due to maintenance costs and assessments.
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