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Old 02-22-2011, 07:35 AM
 
Location: New Orleans
2 posts, read 7,770 times
Reputation: 11

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I need some help... I'm living in New Orleans right now, but planning on moving out of state in about 5 years. We don't know if we should rent or buy during our time here. We're married, no kids, 3 dogs (so that would make it hard to rent elsewhere). Housing prices are crazy here... (750sqft house going for $150,000, or rent for $825) I just feel by renting we're basically throwing our money away. I don't know... Suggestions?q
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Old 02-22-2011, 08:03 AM
 
Location: Mostly in my head
19,856 posts, read 63,096,067 times
Reputation: 19333
According to all the RE agents I've ever heard on the subject, 5 yrs is the minimum break-even point of appreciation vs. fees to sell in a "normal" economy. Are we in one? Who knows? City-Data has a Real Estate forum, you can pose your question there.
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Old 02-22-2011, 08:04 AM
 
41 posts, read 118,565 times
Reputation: 16
We are having a similar issue. We currently live in TX, but may be moving to New Orleans for three years, then back to TX. So we're wondering if we should buy or rent in New Orleans. And you're right about the prices! It's shocking how expensive houses are in New Orleans.

I guess this didn't help. Sorry. We're considering buying for "investment" purposes. But who's to say it will sell for more than we paid for it? It's just all so confusing!
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Old 02-22-2011, 09:59 AM
 
Location: Metairie, LA
1,097 posts, read 2,192,197 times
Reputation: 1477
Renting is not throwing away money. Do the math and some research. There are various rent/buy calculators out there to show you how you would fare in each situation. How much intrest could you make on that down payment money elsewhere? Your house will, on a long term average, will simply keep up with inflation. That 5 year "break even" period is very deceiving. Over those 5 years, how much have you spent on maintinence and renovations? What about the intrest which is something like 75% of your note? That money is what's being thrown away. Buying makes more sense over a 15+ year period.

Also keep in mind that housing values have fallen ~5-10% in most areas in and around new orleans over the past 3 years. As a pure financial decision, in this area, I would definately say rent for 5 years. Take that downpayment, buy some Apple and rent.
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Old 02-22-2011, 11:29 AM
 
Location: New Orleans
2 posts, read 7,770 times
Reputation: 11
Quote:
Originally Posted by rburnett View Post
Renting is not throwing away money. Do the math and some research. There are various rent/buy calculators out there to show you how you would fare in each situation. How much intrest could you make on that down payment money elsewhere? Your house will, on a long term average, will simply keep up with inflation. That 5 year "break even" period is very deceiving. Over those 5 years, how much have you spent on maintinence and renovations? What about the intrest which is something like 75% of your note? That money is what's being thrown away. Buying makes more sense over a 15+ year period.

Also keep in mind that housing values have fallen ~5-10% in most areas in and around new orleans over the past 3 years. As a pure financial decision, in this area, I would definately say rent for 5 years. Take that downpayment, buy some Apple and rent.
I guess I never really thought about renovations and everything involved with that. Renting does sound better, and cheaper in the long run. Thanks for all your replies!
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Old 02-22-2011, 12:00 PM
 
4,822 posts, read 7,112,062 times
Reputation: 6332
The headaches of buying and then selling a house and closing costs and upkeep and taxes and.....Rent.
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Old 02-22-2011, 03:32 PM
 
411 posts, read 802,942 times
Reputation: 314
Like you, I've always viewed renting as a waste of money. I was able to buy houses and turn around sell them fairly quickly if my job situation changed.

But when I moved to Columbia, SC two years ago, I bought a 850 sq ft house in an up-and-coming neighborhood. It's been a disaster. Beyond being victims of the criminal activity in the area, my husband was never able to find work so he moved back to our home town. I started looking for work elsewhere. We put the house up for sale, and were barely going to break even (if we were lucky). We didn't get one showing because most locals are afraid of the neighborhood and/or the house is so small.

We eventually rented it out to save money and I moved in with a co-worker. Still looking for a job. If our tenants decide not to renew, we're going to try to put it back up for sale again and see what happens. Part of me wants to pursue another tenant and see if things will continue to improve with the housing market; the other part of me just wants to get rid of thing.

It's been a hard lesson learned. So make sure you think long and hard about your decision...even if you do plan to buy in a good area. Needless to say, if we move to NOLA, we'll be renting for the duration.
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Old 02-23-2011, 11:41 AM
 
41 posts, read 118,565 times
Reputation: 16
THANK YOU ALL!!!! You have just eased my mind about what we should do. RENT!
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