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Old 08-04-2012, 09:32 AM
 
Location: Poshawa, Ontario
2,985 posts, read 3,576,457 times
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I am not sure where the mentality of renting > owning ever came from.

Regardless of current economic conditions, the ebb and tide of housing prices and the carrying costs of owning vs. the "flexibility" of renting, owning will always trump renting 10 times out of 10. Housing is one of the things you cannot go through life without. That being said, over the next 25 years would you rather pay off someone else's mortgage or your own? Rent money is gone the moment it is paid. Mortgage payments, on the other hand, build equity that you can cash in at a later date, and be in no way worse off than if you had rented your entire life, with the addition of a very large bank account.
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Old 08-04-2012, 09:43 AM
 
1,730 posts, read 1,821,892 times
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Quote:
Originally Posted by Annuvin View Post
Regardless of current economic conditions, the ebb and tide of housing prices and the carrying costs of owning vs. the "flexibility" of renting, owning will always trump renting 10 times out of 10.
Sometimes life throws nice career opportunities at you, but not nice enough to sell your home and move. Stack all such lost opportunities, and you'll get quite something. I'm not sure, though, if it's a risk worth taking.

And, of course, sooner or later you better get your own home.
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Old 08-04-2012, 09:47 AM
 
Location: Western North Carolina
5,418 posts, read 8,520,510 times
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Quote:
Originally Posted by Annuvin View Post
I am not sure where the mentality of renting > owning ever came from.

Regardless of current economic conditions, the ebb and tide of housing prices and the carrying costs of owning vs. the "flexibility" of renting, owning will always trump renting 10 times out of 10. Housing is one of the things you cannot go through life without. That being said, over the next 25 years would you rather pay off someone else's mortgage or your own? Rent money is gone the moment it is paid. Mortgage payments, on the other hand, build equity that you can cash in at a later date, and be in no way worse off than if you had rented your entire life, with the addition of a very large bank account.
Unless the neighborhood you're located in goes south. Unfortunately, neighborhood stability in these times is an uncertain thing, and can greatly affect your ability to sell your home, your home's value, your quality of life in that home, and your ability to become mobile if it ever became necessary.

Something I have experienced personally.
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Old 08-04-2012, 10:43 AM
 
19,337 posts, read 16,941,285 times
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Quote:
Originally Posted by russiaonline View Post
In Russia ownership sure beats rent fast (but not in 3 years - that's abnormal), thanks to inflation (6%+ a year, while rent and housing prices increase with inflation, at least). But there's a problem - at first you'll have to pay a lot more than rent. Many people simply can't cover the difference.

Things are not that different in America, I guess.
Real Estate is the cause of and solution to inflation.
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Old 08-04-2012, 10:46 AM
 
Location: The Triad (NC)
31,346 posts, read 69,561,491 times
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Quote:
Originally Posted by Annuvin View Post
I am not sure where the mentality of renting > owning ever came from.
Regardless of current economic conditions...
But you can't frame the most substantial economic transaction that most people will ever have
in a context that disregards economic conditions. There are at the root of it all.

In the US at the moment there is a LOT of employment uncertainty and disruption.
People are moving all the time in hopes of a better or even ANY job and because they lost
what they thought was a solid situation. It is all rather fluid.

The ECONOMIC decision to buy a home must make sense in and for this reality.
In the absence of that solid job security where you KNOW you'll be there for the next X years
AND have personal, social and family reasons to WANT to remain there it is hard to justify committing
to the mortgage or the responsibility of ownership. Not just hard... it's irresponsible to.

hth
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Old 08-04-2012, 01:32 PM
 
Location: Vallejo
16,261 posts, read 18,210,495 times
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Quote:
Originally Posted by Annuvin View Post
I am not sure where the mentality of renting > owning ever came from.

Regardless of current economic conditions, the ebb and tide of housing prices and the carrying costs of owning vs. the "flexibility" of renting, owning will always trump renting 10 times out of 10. Housing is one of the things you cannot go through life without. That being said, over the next 25 years would you rather pay off someone else's mortgage or your own? Rent money is gone the moment it is paid. Mortgage payments, on the other hand, build equity that you can cash in at a later date, and be in no way worse off than if you had rented your entire life, with the addition of a very large bank account.
Since graduating in 2008, I've lived in three different countries and two states... I don't know how buying fits into that picture.
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Old 08-04-2012, 03:54 PM
 
577 posts, read 933,888 times
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Quote:
Originally Posted by Annuvin View Post
I am not sure where the mentality of renting > owning ever came from.

Regardless of current economic conditions, the ebb and tide of housing prices and the carrying costs of owning vs. the "flexibility" of renting, owning will always trump renting 10 times out of 10. Housing is one of the things you cannot go through life without. That being said, over the next 25 years would you rather pay off someone else's mortgage or your own? Rent money is gone the moment it is paid. Mortgage payments, on the other hand, build equity that you can cash in at a later date, and be in no way worse off than if you had rented your entire life, with the addition of a very large bank account.
This is a gross oversimplification and it's just plain untrue that owning beats renting ten times out of ten. Your statement that rent money is gone the moment it is paid is just another way of saying renting is just throwing money away. Don't think of rent as just throwing money away. A lot of homeowners wish they weren't throwing money away on an asset that is depreciating in value. There can be financial advantages to paying rent, especially if rents in your area are cheaper than an equivalent home after including property taxes/insurance. A lot of homeowners that bought at the height of the bubble haven't built any equity in the last 5-7 years, they have lost significant amount of money and seen the equity evaporate. Where do they fit into the 10 out of 10 times? Note that I agree, for many people buying is better than renting.

Renting vs buying is a case by case calculation that should factor in local price to rent ratios, housing prices to median incomes, expected increase or decrease in rents, amount of distressed inventory in the market and withheld from the market, historic pricing, expected interest rate changes, opportunity cost of down payment, expected price appreciation/depreciation, time you are staying in the property and transaction costs, total housing costs including insurance, maintenance, pmi, taxes, etc. I'm sure I have left out a ton of factors, I just think it's a disservice to make blanket generalizations that buying is always better than renting, or renting is always better than buying. It's statements like these that caused people to massively overpay during the bubble, and that make people continue to buy when it doesn't make sense, like they will only be in a place for a couple years.
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Old 08-04-2012, 08:55 PM
 
85,503 posts, read 82,956,884 times
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Renting is no more throwing money away then spending 2 to 3x what the house cost on mortgage interest,taxes and insurance you dont get back.

You can rent ,invest the down payment,closing costs and in these parts the difference saved over the first 6 -7 years when renting is cheaper and long term come out further ahead renting.
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Old 08-04-2012, 09:21 PM
 
13,718 posts, read 16,747,624 times
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I'd love to have the mobility of renting and I get bored staying in one place. And I'd like to be able to upgrade to a nicer/newer place every couple of years. But the one thing I can say about buying now that my house is pretty much paid for is that it's mine. No one can take it away from me and I don't have to pay rent or make payments anymore. If I were renting, I'd have a housing payment for the rest of my life.

I definitely wish when we had bought a house we had bought the most house that we could afford, even if it seemed like a lot then. Over the years, when housing prices/rent goes up and your income increases, that payment that you could barely afford doesn't seem so bad. I wish we had bought a bigger, newer house with more bathrooms and a little bit of acreage or at least an estate lot. Because then I would feel content staying there the rest of my life.

The house I have now - well, I want a bigger, newer, nicer house on a bigger lot. But the fact that it's pretty much paid for makes me think I'd be better off putting money into making this house the house I want, than going into debt to buy the house I want when this one is paid off.

I definitely wouldn't be in as good a position if I had been renting all this time. But I would have liked being able to move every few years instead of being stuck in one place.
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Old 08-05-2012, 01:50 AM
 
Location: US Empire, Pac NW
5,008 posts, read 11,309,413 times
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I wonder how much of the Echo Boom generation and youngest of the Gen X generation have had to do with rising home prices. Basically, a collapse of the housing prices was a good thing. It both deflated irrational exuberance and too much credit, and it also provided more affordable housing to the newest workers in the largest demographic wave since the Boomers.

Anyway, 3 years is far too short for this market where I live. Principal is far too high, and if you live closer to the city core the more expensive it gets, and makes more sense to rent. Best case around here is more like 7-8 years based on tax benefits alone.
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