Rent vs. Buy a Home (real estate, renter, insurance)

[ness]

Just wondering who owns and who rents....and why???? I've never rented.....but I know some people that rent even though they can afford to buy. HMMMMM?????

[CityGirl72]

I told my husband this is the last house we buy (and it is actually our first)

We do the upkeep and remodels and what not - it's not the money we put into it, but the time

When we rented we had time to have day trips and take the kids places and DO things with each other. Now all we do are chores on the house and home depot runs - I'm sick of it.

[Tina Faust]

I often wonder the same thing. A renter is throwing money out the window. They are paying the landlord's mortgage payments while he/she builds equity in the property, the landlord is getting the tax benefits of owning - in essence the landlord builds wealth while the renter builds.... ???

I can understand renting when someone is new to an area and needs to find out where they would like to live before buying, or someone that doesn't intend to stay in a city/state for more than 2 years (there are usually tax implications to selling a home before 2 years).

[Tina Faust]

Originally Posted by CityGirl72

I told my husband this is the last house we buy (and it is actually our first)

We do the upkeep and remodels and what not - it's not the money we put into it, but the time

When we rented we had time to have day trips and take the kids places and DO things with each other. Now all we do are chores on the house and home depot runs - I'm sick of it.

With any luck this will get better with time... I felt the same way you did after buying my first home many years ago from renting. At this point I wouldn't go back to renting... and we have lots of time for exploring now that we've got things the way we want them.

[ness]

Sometimes the work around the house does get me down.....but when we finish a project I feel a tremendous sense of pride. Sometimes....in the thick of the fixing up I dream of a "done" house that I could just move into. But then I think: what would I do with my time??? I think I'd be bored. And I'd hate to pay for upgrades someone else did that I could have done better....and to my own taste. = ) I've always had dogs (2 90lb.ers) so renting has always been kinda out of the question b/c we need a yard for them. I have been into real estate from a very young age and grew up with my parents fixing and flipping and moving up...so I think it's just what I know. A lot of the bonding time I've had with my parents was working on various houses and watching This Old House. = )

[StealthRabbit]

I can't imagine ever buying a home with current prices. (tho I don't think they will get a whole lot cheaper in PNW).

If I had it to do over...(and what I recommend to my kids)...
I'd put the same $$ into commercial buildings in the path of progress and let my tenants pay my rent or house payments. At least it would cash flow, and in 15-20 yrs be paid off (and really cash flowing...) ... just imagine your $500k building being paid off and bringing you $10k/month ... good-bye job.... It just took me too many yrs to figure that out.

Commercial tenants are SO MUCH easier than residential. They need to keep current on the rents, or Bye-bye business, AND you can have them out in a flash if they mess up + you just rent them the shell. If they plug up the toilet it is their problem. AND getting triple net rents means that every time the sleazy assessor jacks your taxes, it just gets passed on to tenants, same with utilities and the insurance that goes sky high after such things as 9/11.

Do yourself a favor and 'think outside the box'. I don't know how anyone can make a $300k-$500k house cashflow when they get transferred and end up with two, or three of those things.... BTDT

IF you can get into an 'owner financed' one that is significantly undervalued and very marketable, AND you do the every two yr hopscotch; you may eventually get 'even' on a house. But generally they take a lot of dough, and working at a wage job for such a hungry beast is a bit defeating. Granted, renting is not a great way to manage your wealth, but.... a house or farm can really tie you down, and you might be missing an easier way to 'achieve-the-dream'. There are lots of ways to get there, that don't include paying 30-50% of your precious income for a dry night's sleep (with yourself responsible to keep that roof patched ) We limped through on a single income, and didn't go hungry too often. (nor get into a 'sub-prime-mire')

Do check out today's news from UK where a couple has rented a room at a local Motel for 22 yrs...that is a bit extreme
British couple's 22-year motel stop - Yahoo! News (broken link)

[cdelena]

Although I purchased my house because it gave me the property I wanted and the freedom to do with it as I wanted, I do not fool myself into thinking it is the cheapest way to get housing.

Rents vary locally depending upon supply and demand but in many markets you can rent for less overall than buying when full PITI, maintenance, and value of capital (down payment) is considered. Granted the renter does not participate in appreciation, but on an annualized basis it is only a large gain for a minority of homeowners.

I know a number of people that rent nice properties and with full analysis none of them think they are 'throwing money out the window'.

The best choice between buying and renting depends greatly with each situation, but be sure there is no overall best answer.

[Tony1790]

Too funny, asking a realtor if now is a good time to buy is like asking a dog if it's hungry, the answer is always the same.

Anyway, rent, get to know the area, know if it's where you want to spend your life's time and if you can handle whatever commute you have to deal with, besides in 18 months, you may be glad you did.

[Pittgal]

Originally Posted by cdelena

The best choice between buying and renting depends greatly with each situation, but be sure there is no overall best answer.

Agreed! We know we are only going to be here for 4-5 years so renting is the better option for us. The money we sock away will be so much more than if we had purchased a home out here for 4 years. The cost of the upkeep, closing, realtor etc...outways what we can save and invest in the meantime!

Do what you feel is best for your situation!

[cobolt]

Absolutely. Buying isnt for everyone. I don't think renters are throwing their money away if their circumstances dictate they rent. When a housing market is hot, yes you can flip houses and make money, but real estate is a long term investment and most realtors will tell you that if you are not going to be in an area for at least 5 years, then buying isn't really worth it.

Some people want flexibility and would rather rent than pay for upkeep (landscaping, repairs, taxes etc) that they don't really have to worry about.

Plus, alot of these newer houses they are slapping up aren't really worth the money. 300-400k so that you can stare into your next door neighbor's livingroom through your window? I don't think so.

Cobolt