To buy or wait? More housing questions... (house, bought)

[ML North]

I'd continue renting. If you have no debt and a huge surplus in your budget you can honestly say "I have more money than I know what to do with."

Seriously though, if you purchase, between interest, taxes, transaction costs, and maintenance you'll be spending close to the amount that you're currently spending on rent. If you want to invest your savings there are better vehicles than homeownership, including funds that can provide exposure to diversified real estate holdings.

[BrianTH]

Originally Posted by ML North

Seriously though, if you purchase, between interest, taxes, transaction costs, and maintenance you'll be spending close to the amount that you're currently spending on rent. If you want to invest your savings there are better vehicles than homeownership, including funds that can provide exposure to diversified real estate holdings.

I agree with all of that, but I also think buying could make sense if the OP wanted a bigger place (assuming normal price to rent ratios for Pittsburgh applied) that they would have more control over.

One could also note that home ownership gives you access to cheap, government-subsidized loans you can use to leverage your savings . . . but that's tricky business and it is probably best to stick with the basics.

[NoSwingForYou]

Originally Posted by ML North

I'd continue renting. If you have no debt and a huge surplus in your budget you can honestly say "I have more money than I know what to do with."

Seriously though, if you purchase, between interest, taxes, transaction costs, and maintenance you'll be spending close to the amount that you're currently spending on rent. If you want to invest your savings there are better vehicles than homeownership, including funds that can provide exposure to diversified real estate holdings.

I've went down that route in my mind before, and I wont lie, part of me likes the idea of keep renting, it IS nice to not feel tied down and I sometimes do wonder just how much more I'll save over the long term of buying vs renting. It is refreshing to not hear the same sentiment on this forum of "buy buy buy renting is such a waste etc etc..."

Really the only things keeping me on buying track are
1) I dont see myself moving in the foreseeable future,
2) Rent just keeps going up, and the rental companies are getting more and more annoying and
3) It would be nice to have my own place where I can do what I want (I mean you guys should see my new lease..I'm pretty sure I had to waive a trial by jury if it were to ever happen ) and
4) I have a lot of money saved up

[Q-tip motha]

Originally Posted by NoSwingForYou

I've went down that route in my mind before, and I wont lie, part of me likes the idea of keep renting, it IS nice to not feel tied down and I sometimes do wonder just how much more I'll save over the long term of buying vs renting. It is refreshing to not hear the same sentiment on this forum of "buy buy buy renting is such a waste etc etc..."

Really the only things keeping me on buying track are
1) I dont see myself moving in the foreseeable future,
2) Rent just keeps going up, and the rental companies are getting more and more annoying and
3) It would be nice to have my own place where I can do what I want (I mean you guys should see my new lease..I'm pretty sure I had to waive a trial by jury if it were to ever happen ) and
4) I have a lot of money saved up

I can't blame you. I've been fortunate before buying our current home that my two previous landlords were pretty hands off. Our last one was a good friend and allowed us to move out two months early.

Its great to be able to paint, decorate, or remodel my home as I see fit. To be able to turn up the music on my day off to do some cleaning and know that I'm not bothering anyone. To have our dog in our home without having to pay additional fees. Sure it sucks when something breaks as I have to pay to have it fixed or attempt to do it myself, but that's far better than waiting around for a landlord to fix it.

One of the places I rented in Morgantown with some friends while attending WVU was without a toilet for nearly 2 weeks, and then was only fixed with moderately successful results. My first place in Pittsburgh was without gas for 11 days. Nearly 2 weeks of cold showers and limited cooking. Knowing what I know now if I had it to do over I would get an attorney and make both landlord's lives miserable. Right now my wife and I have friends who own a building here in town where the AC for one of the tennants broke recently. Instead of fixing it they're discussing amongst themselves the potential for temporarily prorating his rent. Its going to be 89 today, 94 tomorrow, and they are well within their means to afford a technician right now. WHY?

I would never live in a place that was under the jurisdiction of a homeowners/condo owners association. Too many horror stories of friends locally being harassed by theirs, or people across the country having their homes sold out from underneath of them because someone lost a job and they couldn't afford the dues.

[EveKendall]

After renting for three years in Pittsburgh (and renting for the past 10+ years in cities around the country), I bought my first house last year. I can honestly say it was the right decision. I think Pittsburgh is a terrible place to rent and a good place to buy. As long as you plan to stay in the house for at least five years, it seems like you can at least break even. We were able to buy a nice updated 3 bed/1.5 bath in south Squirrel Hill at your budget point with a 15 year mortgage, and we pay only about $100 a month more than when we rented in Squirrel Hill (from a slumlord).
Best of luck to you.

[ML North]

Originally Posted by BrianTH

I agree with all of that, but I also think buying could make sense if the OP wanted a bigger place (assuming normal price to rent ratios for Pittsburgh applied) that they would have more control over.

One could also note that home ownership gives you access to cheap, government-subsidized loans you can use to leverage your savings . . . but that's tricky business and it is probably best to stick with the basics.

There are ways of justifying homeownership other than financial analysis and admttedly everyone has different divers. Perhaps after I burn out on renting , some of those soft-value perks will be more important.

Nice point about access to cheap money. I think that'd be an important consideration for savvy investors.

[ML North]

Originally Posted by NoSwingForYou

Really the only things keeping me on buying track are
1) I dont see myself moving in the foreseeable future,
2) Rent just keeps going up, and the rental companies are getting more and more annoying and
3) It would be nice to have my own place where I can do what I want (I mean you guys should see my new lease..I'm pretty sure I had to waive a trial by jury if it were to ever happen ) and
4) I have a lot of money saved up

All good reasons for buying, though I'd like to note that there are apartments that rent for far cheaper than $650 outside the East End. If staying in that area is important, however, buying may be advantageous.

[BrianTH]

Originally Posted by ML North

There are ways of justifying homeownership other than financial analysis and admttedly everyone has different divers. Perhaps after I burn out on renting , some of those soft-value perks will be more important.

It really just depends. Some people rent their whole lives, and it could be a smart decision for them.

Nice point about access to cheap money. I think that'd be an important consideration for savvy investors.

The tricky thing is it makes sense if you are already a very good saver, such that you don't have a lot of other debt (unless it is also locked at cheap rates) or other fixed financial obligations, and generally are secure financially. So it is sort of like a low-rate mortgage can be a good thing if you don't really need it, which is not exactly intuitive.

And then you still have to be smart with your investments. It actually isn't that hard to do better than investing a lot of capital in your own home, but there are lots of people out there trying to convince you to do dumb things with your money.

[MeinGlanzendMotorrad]

Originally Posted by ML North

All good reasons for buying, though I'd like to note that there are apartments that rent for far cheaper than $650 outside the East End. If staying in that area is important, however, buying may be advantageous.

I was renting one side of a duplex, including off-street parking, with a fenced and gated back yard of reasonable size, from a really nice guy who didn't care what we did as long as we didn't burn down the house, for $400 a month in a nice part of Overbrook.

[Magali27]

Originally Posted by raffy71

We were able to buy a nice updated 3 bed/1.5 bath in south Squirrel Hill at your budget point with a 15 year mortgage, and we pay only about $100 a month more than when we rented in Squirrel Hill (from a slumlord).
Best of luck to you.

...and 15 years after you bought it, it will be PAID OFF and all you will ever have to pay from then on is taxes, insurance and maintenance. It must be awesome to have your total housing cost drop by 65%-75% just 15 years after you bought, and to know you could keep on living that way--almost for free--for the rest of your life.