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You shouldn't be renting if you're not financially stable either. I think it comes down to two simple factors: Does OP want to own a house and can OP afford it? Forget resale value. Forget how long OP will live there. Forget rent amounts vs. mortgage amounts. But don't buy making assumptions that:
A. My parents/friends will be proud of me
B. I'll save money in the long run
C. I'll sell it for a profit later
D. My future significant other will fall in love with me because I own a home instead of rent one. Etc. . .
If you buy the house, do so because you want it. Don't buy it for anyone else, including any future homeowners.
Ding ding ding. I won't make money on the place I bought, but IT IS MY HOME. i can paint the walls colors I choose. I can have pets--it is very hard to find rentals that allow pets. When something breaks or needs to be fixed, I can get it fixed right away. Landlords are naturally concerned with the bottom line and are going to try to wait out any repairs till you request help three or four times. The heat on the second floor of the house I rented went out in the winter. It took three weeks for the landlord to get around to getting it fixed, obviously hoping the temps would warm. They didn't. I had to buy space heaters. This is a veterinarian who owns two animal hospital and a number of rental properties, but cheap as hell. When my heat wasn't working here the winter after I bought, I called a local HVAC guy and they were here in 45 minutes.
My last landlord was a nice guy, but when it rained and I called to tell him I had four buckets in the kitchen and bathroom to catch the leaks, he laughed heartily and said, "guess one of these days I gotta replace that roof".
Homeownership is more responsibility, but you aren't waiting for someone else to step up who doesn't want to step up because they are clutching their pennies.
Even if my home was upside down in value it wouldn't matter to me because my mortgage is so low that it costs less than renting a one bedroom apartment.
Some people are still upside down because they bought at the height of the market and didn't do their homework, and got loans that they were not qualified for or spent money on upgrading the home instead of being happy with what you have, but even some of those have mortgage payments that are in line with what rental costs are in that area so they are not in that bad of a shape.
EXACTLY. When you hear people complaining that they took a huge loss on their house it usually boils down to a lack of market research prior to purchasing it. I get that home buying is very emotional and sometimes people are willing to pay any price to get that house, but there can be some big consequences that come along with a bad decision. It pays dividends (literally) to buy carefully and to buy smart.
If you are considering purchasing a home and through research you find that homes in the area you want to buy are 10-15% higher than last year and interest rates are at 5.25%, and there are no signs that the area is improving and the market will climb higher and stabilize there, it might be wise to continue to rent and give the market time to re-adjust before buying.
Yeah, but the costs that go into it are tax deductible.
And the revenue is taxable before the deductions are taken. Taxes do not turn a negative profit into a positive one. Nor, for that matter, do they turn a positive profit into a negative profit. It just does not work that way. When discussing whether there is a profit or loss, taxes are actually irrelevant - they can reduce the magnitude of a profit or loss, but they do not make a profit into a loss or a loss into a profit.
I guess I'll call my debt free landlord friend that owns 60 rental houses and 10 apartment complexes and ask him where he got the money to pay for his lake house, his motorcycles, his boats, wave runners, camper trailer RZR, his home in historic downtown, etc.....
Apparently he didn't get the memo that landlords don't always make a profit. He seems to be doing very well with it.
So if one person does well, that means everyone does well?
So if one person does well, that means everyone does well?
It means that the idea that landlords don't make a profit is a myth. Would you have a job that continuously drained you of any money you had with no return on the investment?
It means that the idea that landlords don't make a profit is a myth. Would you have a job that continuously drained you of any money you had with no return on the investment?
No one was ever arguing that no landlords ever made a profit. Rather, the argument is that not all landlords make a profit in all cases. Why is this so hard???
It means that the idea that landlords don't make a profit is a myth. Would you have a job that continuously drained you of any money you had with no return on the investment?
Exactly, if LLs didn't make a profit there would not be so many LL and there would be no rentals.
I rented a tiny 1 bedroom near the beach in the Fort Lauderdale area. The LL didn't know what she was doing, she had a friend help her who did some of the handyman work and was the super for free. I lived there for 3 years, I was the longest tenant in her 4 plex. The other lady who was there for a while was a crazy woman who the super let in because he father vouched for her, she was crazy and a drug addict which is why her father controlled her disability payments and paid her rent. She should have never been allowed to live there.
No one else stayed very long, in fact the lady allowed people to rent seasonally for just the winter months. She had 4 nice small units 2 studios and 2 small 1/1 each with a small backyard patio. She just didn't know how to get any good tenants. I was her best and longest tenant and she ruined it when I caught her snooping in my apartment while I was gone. She should not be a LL and her friend the super just does the minimum work and I think he is only doing it for free because he was the one who encouraged her to buy the property and she uses that against him so he feels guilty.
So if you are a LL and are not making a profit then you are the problem.
No one was ever arguing that no landlords ever made a profit. Rather, the argument is that not all landlords make a profit in all cases. Why is this so hard???
I dunno. Not sure what part you're struggling with.
No landlord is going to continue to be a landlord if they aren't making an overall profit.
And the revenue is taxable before the deductions are taken. Taxes do not turn a negative profit into a positive one. Nor, for that matter, do they turn a positive profit into a negative profit. It just does not work that way. When discussing whether there is a profit or loss, taxes are actually irrelevant - they can reduce the magnitude of a profit or loss, but they do not make a profit into a loss or a loss into a profit.
Lol you're probably right... Rental Property is a horrible investment. Why even bother..
Quote:
Originally Posted by LifeIsGood01
So if you are a LL and are not making a profit then you are the problem.
This!
I love these discussions lol.. Career renters try to argue that they're getting over because they don't have to pay property tax, while others try to convince you that owning rental property is bad lol. "B-b-b-but the revenue is taxable!"
So at the end of the day neither option is a universal truth for everyone. It depends on many factors and those are unique to each individual.
If you are a person that is on the fence about buying strictly because you are afraid that the cost is higher than rent I would urge you to do some market research and to educate yourself on the benefits/downfalls of owning a home and then make the decision.
Can you lose money? Sure.
Can you break even? Yes.
Can you make money? Absolutely.
There are many variables at play but everything starts with educating yourself (just as when you are considering entering the stock market) on how everything works. Only then can you make an informed decision.
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