Why is it so cheap to buy and so expensive to rent? (college, office)

[MadeByMarzipan]

Thanks for the info guys. Yeah, I've seen quite a few houses where the landlord wants you to end up buying... they'll have like a $3000 "deposit" and then it's rent to own... which we do NOT want to do. Wish us luck in finding a place!

[Mckellyb]

Renting rolls the inherent home ownership costs into the monthly payment. As stated earlier, taxes are the killer.

While Texas property taxes are "high", they're not much worse than what my wife and I paid in Oregon back in '01-'05. Making matters worse there was a state income tax on top of said property tax. Capital gains, BTW, are income. That was a truly unpleasant check to write to the state, honestly, as they were piggybacking on my good fortune.

"But there's no sales tax!!!!" (this was Oregon)

Um, yeah, but I don't spend every single cent I make, yet am taxed on every cent I earn. How is this better?

House value here isn't dropping like it is elsewhere because it did not go stupidly nuts like it did in, say, Vegas. My wife and I have property there, and it's not worth what we paid for it back in '01. When the local plumber has four houses, none of which he's made payments on, and he has a new truck, you know the math ain't adding up.

New, cheesy, house prices in Vegas, at the height of the idiocy, was $250+ per square foot. We're talking 1600 foot cookie-cutter houses, on postage-stamp lots, with garages and driveways so small, if you owned anything larger than a true mid-sized car, think Camry/Accord in 2003, you'd be parking in the street.

These weren't close to any shopping/schools/entertainment, either. Your view was of nearly endless sand. Fascinating.

FWIW, the place we purchased in SW Fort Worth cost us an even $55/square foot, was built in 2006, is essentially new, well-constructed, and is 3K square feet with a significantly oversize garage.

Even so, putting 40% down, the payments were doubled by property taxes. Granted, we cannot claim the homestead exemption until next year, and the value will have another $20K plus shaved off it, but still, the taxes are going to drop only a couple of grand per year.

[Konekodesu]

Originally Posted by MadeByMarzipan

This was very informative. I had heard that property taxes were high, but didn't realize that Texas was a no income tax state. It looks like we'll need to take that into consideration, as well as the electric bills, which appear to be double what we typically pay now.

I appreciate all the help and advice I've been given on this site, you guys are great!

I'm 22 and I've lived in apartments here my entire life... ($690 a month for a 2-bedroom, 2-bath, 1 office, 1,080 sqft apartment. I thought that that was a good price. D: Maybe for here... ) I found out just a few months ago that other states have income taxes. I was shocked. I only thought income taxes were federal... XD I am so ashamed at my lack of knowledge~

[Mckellyb]

Konekodesu, just make sure you don't move somewhere with local income taxes...as in city.

[Konekodesu]

I really am shocked, and I realize I shouldn't be... I live off student loans and my family gets a tax refund... I just think of how when I finish school and move somewhere how shocking it's going to be to my system to suddenly be paying all these taxes and student loans back. And my own health insurance, car insurance, car payments, mortgage... fun stuff. I'm just... thinking about living in a hole. Or place so dirt cheap it would be considered a hole. I don't know how people do it.

[Rakin]

Living off student loans is digging you a deep hole. Can you not get a part time job to help cut the borrowing ?

[NE Tarrant Resident]

I was just talking about this the other day. I think the reason is that the people that are buying these homes when they are for sale are financing them, some with very little money down. So they are having to pay a mortguge at almost full cost. So in order to make money, they are having to charge above their payments.

The cheaper rentals are probably going to be from someone who actually had the money to buy the house outright thus don't have as big an overhead, just taxes, insurance, and money to pay for maintance.

[catman]

Just for information, my property taxes have gone from $1200 in 1990 to $3500 in 2010 on my house which is presently appraised at $140K.

[Konekodesu]

Originally Posted by Rakin

Living off student loans is digging you a deep hole. Can you not get a part time job to help cut the borrowing ?

Nope. Not with my ADHD as severe as it is, I really struggle getting everything turned in on time. It takes me several hours what takes most 1 or 2. Scheduling doesn't help either because I can set aside a certain time to finish things, but that doesn't mean my brain is going to cooperate if I'm restless. *sigh* I really want a job too. OH WELL. Debt is nothing though, once I graduate and get a job, I can survive on very very little compared to... almost everyone I've ever met.

I didn't take into account taxes though. /That's/ going to suck my income away. My debt's going to take longer to pay off than I thought... unless I stay where I'm at. No local tax, no state income tax... But I wanted to see the world while I'm still young~

[SouthernBelleInUtah]

You can get a 3-yr forebearance on paying back your loans, to allow you to get a job and start getting established and save.