Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hi everyone, I have a question for all of you. We have the opportunity to buy the house we have been renting for the last couple of years - it's 2-story, 5 bdrm, 3 bath (we have a...big family, lol)...built early 1900's, price is pretty decent (less than $100,000). It would be on a land contract (our credit is lousy, long story)- the house is alright, nothing to write home about- lots of possibility, etc.- we've had no major problems with anything. Ok, after laying all of that groundwork, here are my questions and concerns:
1. We are in Omaha, where my husband's work is, and the unemployment rate is great compared to so much of the country-my entire family (grown kids) have moved here, but...it's still a big town (something like 450,000). The concern is that we would prefer outside of town, simply because we would like to grow our own veggies, etc.- frugality, all of that. We worry about the SHTF, and what being in a large town as opposed to outside of town somewhere if that were to happen would imply.
2. I'm "so-so" on Omaha, I don't brutally hate it, but I can't say I really like it, either. However...because of the unem. rate and the fact that there are jobs, common sense tells me "stay put".
3. Owning a house truly scares me, always has. I think the reason for that is because I know that things can happen (loss of job, etc., although DH has a stable job...but in this economy, well..you just never know), that and the fact that I know we will be responsible for anything that needs to be replaced...the furnace is a biggie in my mind, although there is nothing wrong with it. I just know replacing it would be really difficult.
The one reason that I would actually consider buying, is because we have paid the owners almost $20,000 in rent the last two years. And I have to say, it makes me ill when I think about it...all that money to have somewhere to sleep at night, going to pay someone else's mortgage payments, you know?
So...is it wise to buy at this time, given the way things are? We aren't looking to "buy up" at any time in the future, or sell for a profit, etc.- we want a place that is ours, and this would be the only goal. Any advice?
I think its ultimately going to have to be your decision. I'll just use myself as an example though. We rent too. But in our area rent is about 50%+ less than the cost of buying. So for us it makes sense financially.
The advantages to us in renting are as follows:
1: The rent costs less than buying ( probably not in your case)
2: We can pack up and move at anytime- which is likely given we want to move out of state at some point to a more affordable area.
3: Any repairs made has to be done by the landlord
4: No property taxes
Anyway, we're sort of in the same situation. We don't love where we live but we have good jobs thus we stay- at least until we save enough to get out of here. If we buy a house, its going to be somewhere we actually like and want to stay long-term.
I think its ultimately going to have to be your decision. I'll just use myself as an example though. We rent too. But in our area rent is about 50%+ less than the cost of buying. So for us it makes sense financially.
The advantages to us in renting are as follows:
1: The rent costs less than buying ( probably not in your case)
2: We can pack up and move at anytime- which is likely given we want to move out of state at some point to a more affordable area.
3: Any repairs made has to be done by the landlord
4: No property taxes
Anyway, we're sort of in the same situation. We don't love where we live but we have good jobs thus we stay- at least until we save enough to get out of here. If we buy a house, its going to be somewhere we actually like and want to stay long-term.
Not sure if that helps.
Good luck with your choice!
You pay property taxes, you just pay them for your landlord. I don't deny renting is best in your situation probably California I would imagine?
Anyhow a landlord isn't in business to lose money so he's going to get all his expenses covered by the tenant nad that includes property taxes. You do get to skip out on the maintenance part as no one can anticipate what will happen and thats on him to repair.
You pay property taxes, you just pay them for your landlord. I don't deny renting is best in your situation probably California I would imagine?
Anyhow a landlord isn't in business to lose money so he's going to get all his expenses covered by the tenant nad that includes property taxes. You do get to skip out on the maintenance part as no one can anticipate what will happen and thats on him to repair.
Yes. We're in California. I personally don't buy the "throwing money away on rent" argument. There are advantages and disadvantages to owning and renting. Renting means you'll never get appreciation ( which personally I don't care about since my financial future isn't tied to the appreciation of my house anyway) But renting means you can pick up and move instantly. That's important given today's job market and the increasing likelihood of either having to transfer, lose a job, or have to find work in another state.
In any regard, what we rent costs a lot less than buying and if we bought we wouldn't be able to afford the house we rent because its pretty nice.
On the other hand if houses were 100k versus the 500-600k they cost in Cali, I'd probably buy. Then again that's with my income. Its all a matter of everyone's personal finance.
im not a big fan of owning my house. its a lot of money to be sitting in such a non-liquid asset. it doesnt make much sense now, but if it ever made sense to sell my home to rent it from someone, id do it.
We would like to buy a house someday. But I've heard horror stories from friends and relatives where they needed a new roof, foundation work, or some other thing that cost 10's of thousands of dollars. That sort of frightens me. To me about the only advantage I'd see for buying ( keep in mind this is just my own opinion) is if we can just buy it outright for cash. Then that expense would be gone and whatever was made would be stuck into retirement accounts. Hence why we're probably moving to a cheaper state where houses are more like $150,000 or so. That's a big swath of the country- sans the coastal areas.
I bought a townhouse two years ago and it's $10K less in value now. The market is good for someone who wants to buy and stay put for 10 years, we are at the bottom now and some areas have already starting to move upward, CA is one of these states. If you can hold on to your property and keep it in good shape for 5-10 years, this is the time to buy. I am thinking of buying another house and rent my townhouse.
Yes. We're in California. I personally don't buy the "throwing money away on rent" argument. There are advantages and disadvantages to owning and renting. Renting means you'll never get appreciation ( which personally I don't care about since my financial future isn't tied to the appreciation of my house anyway) But renting means you can pick up and move instantly. That's important given today's job market and the increasing likelihood of either having to transfer, lose a job, or have to find work in another state.
In any regard, what we rent costs a lot less than buying and if we bought we wouldn't be able to afford the house we rent because its pretty nice.
On the other hand if houses were 100k versus the 500-600k they cost in Cali, I'd probably buy. Then again that's with my income. Its all a matter of everyone's personal finance.
You make a good point anyone who says renting is throwing money away always is wrong and anyone who says owning is bad all the time is wrong. Totally depends on market. If I were in Cali I woudl rent as well. I think you probably get more for your money, keep your options open, etc.
In my area however my mortgage is a good $400 cheaper than renting my place would be. Sure I got maintenance, I'm tied down in a sense but it makes sense for me.
As for people who say you money is teid up in a non liquid asset. I bought FHA so I only have 3.5% down on a 84k place so not much teid up ther. Any equity I have tied up is money that would have been spent no rent anyway so its not like I'd be putting it away otherwise.
Plus I'm on the younger sid so young enough to still have a roomat eor roomates. Currently have a roomate paying half my mortgage.
As for the person who commented on new roofs, etc. Townhouse may be an option for you. They take care of all exterior maintenance in terms of roof, siding, landscaping, snow, etc. I decided to buy a duplex with no HOA figured why should I pay $200 a month to shovel my one car driveway and mow my patch of 20x20' grass however the exterior maintenance is where that comes ni handy. Kinda wishing I would have gone HOA
As for the person who commented on new roofs, etc. Townhouse may be an option for you. They take care of all exterior maintenance in terms of roof, siding, landscaping, snow, etc.
Not so fast. I live in a townhome community and though there is an HOA, each owner is responsible for their home's exterior maintenance. So as not to mislead the other readers/posters to this thread, you cannot categorically say that townhome (or any other style community) HOA covers individual home outside maintenance.
Some random thoughts from someone who has owned rather than rented since 1995 - and where I live now (SE Michigan) it is cheaper to buy than to rent, for the most part.
Have a real estate attorney look over the land contract. Make sure there are no present liens on the property and it's owned by whoever you make the contract with. I have heard stories, like someone who bought on a "handshake" LC, made improvements to the property, made all their payments...and then found out that the person they had the contract with was not the legal owner and they lost the house.
Or - true story - some people I know had a LC, but they had defaulted on property taxes and water bills on a previous house. The LC house was in the same city, and the city attached the back taxes and water/sewage bill to the LC house. Of course the people they had the contract with them became liable for the bills and were in danger of losing their house! They had to pay all the back taxes and bills in order to keep their house, and the folks I know who were living there of course got evicted.
On the other hand I have a friend who did do a "handshake" contract on a house she was renting, paid for something like five years, and now owns her house free and clear.
But it's a good idea to have all your ducks in a row...
You guys are in a much better position if you can do maintenance and repairs yourselves whenever possible; so the cost of a furnace going out in January or a plumbing emergency doesn't put you in the poor house for a month. By the way, some utility companies have fairly inexpensive insurance you pay with your utility bill that will pay for repair and replacement of things like appliances, furnaces and hot water heaters.
I think a lot depends on the local market and what kind of deal (and for how long) you make with the owners. Like, who will be responsible for taxes and insurance, get a home inspection done before you sign anything, etc.
I own one house with no mortgage and rent it out...it is a crappy house but a wonderful feeling! The one I'm in now will be paid off within five years...I bought it with a large down, it's a fixer-upper like the other one so it was cheap, and where I live now home prices can't get much lower, ha. Even if prices here remain flat for the next decade I figure I'll have enough "sweat equity" plus I will have been living for really cheap, so if I sell both house for what they are currently worth in, say, seven years I'll have a nice little chunk of change.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
