Rent vs. buy?? (New Orleans, Many: real estate, apartment, for rent)

[chad3]

Originally Posted by whatisthedealwith

All of this is true. But as a homeowner I can tell you that if taxes increase you also pay.

I actually looked at buying a condo in New Orleans because I am there a lot for work. I viewed several places and came away thinking it just wasn't the right time.

The OP sounds as though they aren't living in a slum lord situation. The location they describe is excellent. Really, that sounds sort of ideal. From what I saw when I looked, 400K was not going to buy you a lot of house, and it certainly wasn't going to buy you a SFH near when the OP lives unless it was a shell in need of complete renovation. If it were me, I would probably stay put. In fact, if you decide you want to buy and vacate, let me know.

As for the other comment about putting someone's kids through college, think about this: on a 400k house, the monthly payment is anywhere from $1500 to $2200 depending on the type of loan, interest, insurance, etc. And don't forget utilities-- you are paying for all of them now. Let's say you got a double in the most desirable part of the Marigny for this amount. Likely anything in that price range will need some work, so add that cost-- say another $30K to be conservative. Now you want to rent. You actually find a renter who will pay $1300/$1400 to live in your place (this could be difficult depending on your location). You are nowhere CLOSE to your payment. In fact, you might be paying THE SAME as if you were renting somewhere but now you have the hassle of dealing with a tenant. Believe me, good tenants don't grow on trees. They can damage your place, move out in the middle of the night, make noise, kill your grass, take your parking space, get the cops called, etc. I have been a landlord. Only the naieve would think this is a "get rich quick" scheme. My parents generation thought home ownership was the only way. Things have changed.

I in no way meant to imply, that the average person can get rich, by being a landlord.

But I know a successful lawyer who buys houses and fixes them up, and he turns them into apartments, and rents them out. He plans to retire when he is 50 years old and live off his apartments.

And I know this lady who put a trailer in her back yard, and rented it out. Then she made a apartment in the rear of her first story and rented it out. And she lives upstairs and her tenants pay 100% of her bills.


But you are 100% correct in what you said. To be honest when I was writing that post, I was kinda thinking he could rent out the house, if he ever wanted to move somewhere else. And then return to the house someday.

But if he did a little construction, and divided the house into 2 separate apartments, then he could make a little cash.

Sorry if I confused the subject,
Chad.

[chad3]

Originally Posted by rburnett

This is quite laughable. Nobody is going to college on my rental income. I hope that you're not anyone's financial advisor.

To anyone looking at renting vs. owning a home, please put it down on paper and do the math. A home is a place to live, not an investment. If you can prove to yourself that it is cheaper to own a home in your situation, then by all means. However, I gaurantee that a lot of you out there will find renting more beneficial.

See post #11 in this thread.

Have a good one (I guess),
Chad.

[chad3]

Originally Posted by rburnett

This is quite laughable. Nobody is going to college on my rental income. I hope that you're not anyone's financial advisor.

To anyone looking at renting vs. owning a home, please put it down on paper and do the math. A home is a place to live, not an investment. If you can prove to yourself that it is cheaper to own a home in your situation, then by all means. However, I gaurantee that a lot of you out there will find renting more beneficial.

You are 100% wrong.

When you rent a home, your money goes strait to your landlord, (its just like burning the money.)

But when you buy a house, and use the money you used to spend on rent, to pay off the house loan, you own the house.


When you rent (you own nothing.)
But when you buy a house (you own the house.)

Here's the question, whats better?
a. own nothing.
b. own a house.

[Neworleansisprettygood]

Originally Posted by chad3

You are 100% wrong.

When you rent a home, your money goes strait to your landlord, (its just like burning the money.)

But when you buy a house, and use the money you used to spend on rent, to pay off the house loan, you own the house.


When you rent (you own nothing.)
But when you buy a house (you own the house.)

Here's the question, whats better?
a. own nothing.
b. own a house.

It's just not that simple. When you buy property you're taking on the market risk. You can't just move out if the local economy tanks or the neighborhood goes sour. Any major repairs are up to you- most landlords with a decent amount of property have their own guys for repairs. I own my place and I know that you can feel a little "stuck" if something goes wrong. I still like having the pride of ownership and everything, but it's not for everyone.

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[whatisthedealwith]

Originally Posted by chad3

You are 100% wrong.

When you rent a home, your money goes strait to your landlord, (its just like burning the money.)

But when you buy a house, and use the money you used to spend on rent, to pay off the house loan, you own the house.


When you rent (you own nothing.)
But when you buy a house (you own the house.)

Here's the question, whats better?
a. own nothing.
b. own a house.

Uhhhh...yeah.

Lets think about this the OPPOSITE way. Let's say you own a house and there is a hurricane whaich floods it. Your insurance has an 11K deductible, (common) meaning that you owe the insurance company the first 11K of damage on your place. Let's say you need to repair your roof and your floors, replace some wiring, install a new porch. This damage comes to about 35K, of which you are on the hook for 24K up front. Now, let's say the insurance company drags its feet, hems, haws and claims that your damage is really only worth paying out 25K for. So you owe them 11K and now another 10K our of your pocket to repair your home.

Let's say you rented that house. Same damage, but guess what? You packed up your valuables and YOU OWE NOTHING.

Now what is better?

Seriously, have you ever owned a house? Do you understand the first thing about it? I mean, if its important to brag about owning a little piece of the world, okay. But its NOT always a cost effective equation.

[moiraesfate]

To the OP, your situation sounds almost ideal. I envy you.

Our current landlady... well there's alot of issues with her. We have seriously bad leakage from the floor whenever it rains because it's almost flush with the ground. The ceiling caved in once in one area and had been leaking for months. We repeatedly told the landlady of these troubles, and it took her a year and a half to fix the hole in the ceiling and it was still leaking when it rained. Now it's leaking somewhere else on the same roof and it looks like it will cave in there. There is wiring in there. We have problems with every single faucet in the house leaking. The drainage from the washer was leaking so bad that the washer and dryer nearly crashed through the floor. One of the toilets was slowly sinking through the floor. In fact, in one room... you know the tape builders use around the edge of a room so they are smooth and flush? It is peeling in two places, there are cracks in the wall near the ceiling that won't seal properly no matter how many times we fill it in, and it looks like dirt/mud coming in from these areas and on the floor that's bad enough it's climbing the wall. Trying to clean this mud does nothing since it won't come off.

Months and months of reporting these problems to her (sometimes years), and getting her to fix them has been like pulling teeth. We finally managed to get her to send over a guy to fix it all, and now she wants to raise our rent $150 every month for this year and another $350 every month for next year with the possibility of it increasing again after that.

Let me tell you, this house may be big, but it's in seriously seriously bad shape. They REALLY don't want an inspector coming in here. If you ask me, the amount of repairs this house needs means it should be totally torn down and restarted from scratch. I'm frankly surprised it hasn't burst into fire from the bad wiring. We are so sick to death of fighting with this woman to get any repairs done.

So we are looking at the same thing you're doing. Moving and renting or buying.

Frankly, I'm terrified of renting. Never have I had a landlord as bad as this one. I don't want a repeat of what's happened here. And I badly want to own my own place. So we need to decide between buying a condo or a house. Ideally, I want a new place with two bathrooms, in a safe location. Getting all three for a reasonable price seems next to impossible in this city.

Renting is only ideal if your landlord is a good one. Either way, flood insurance is expensive.

Have you thought about approaching your landlord and asking them if they would consider selling it to you? Sounds like you have gotten lucky.

[confusedasusual]

I have thought about asking if he would be willing to sell my place, but I am doing a little research first. Because we share part of a wall, it would be more of a condo situation than selling the structure outright, and that might get complicated. I would also want to do some renovation, but I don't know if I would be allowed to do what I would like to with the house on the National Register of Historic Places and the Vieux Carre' commission weighing in.

[Neworleansisprettygood]

Originally Posted by confusedasusual

I have thought about asking if he would be willing to sell my place, but I am doing a little research first. Because we share part of a wall, it would be more of a condo situation than selling the structure outright, and that might get complicated. I would also want to do some renovation, but I don't know if I would be allowed to do what I would like to with the house on the National Register of Historic Places and the Vieux Carre' commission weighing in.

You may be able to subdivide the lot and call it a townhouse.

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[debbiemh]

Btw. Flood insurance is really cheap if you have a semi raised house and it didn't flood during Katrina. VC, Marigny and the upper part of Bywater fall into that category. I own a house we rent out in the Marigny and we live in the Bywater, so I'm paying flood insurance on both and that is the least of my expenditures.

[chad3]

Originally Posted by Neworleansisprettygood

It's just not that simple. When you buy property you're taking on the market risk. You can't just move out if the local economy tanks or the neighborhood goes sour. Any major repairs are up to you- most landlords with a decent amount of property have their own guys for repairs. I own my place and I know that you can feel a little "stuck" if something goes wrong. I still like having the pride of ownership and everything, but it's not for everyone.

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I am 40 years old, and I have been a renter for 20 years.
My average monthly rent is aprox. $500 per month.

$500 x 12 = $6000. So I pay $6000 per year in rent.
I have paid rent for 20 years. $6000 x 20= $120,000.00

In my lifetime I have paid aprox. $120,000.00 in rent.
Its like I burned $120,000.00. I have nothing to show for that money (except old paper rent receipts)


Financially speaking it is (much) smarter to buy a house, than it is to rent.
And even if you buy a house and decide to move, you can just rent out the house. The rent fees will most likely pay 100% of loan payments, home insurance, ex.ex.

I am not telling anyone to rush out and buy a house. When a renter purchases a house, it must be a very well thought out thing.

All I know is I have spent around $120,000.00 in rent in my lifetime, and the only property this $120,000.00 has given me, is a shoe box full of old rent receipts.


Choice a. or b.

a. Own a shoe box full of paper rent receipts.
b. Own a nice house.


And I live cheap. If I would have rented $800.00 per month properties, I would have spent $192,000.00 in rent, with nothing to show for the money, except worthless old paper rent receipts.