Renting vs. Buying Home - What makes more financial sense?

[selltheburgh]

Originally Posted by GeneW

So one factor that no one has mentioned is inflation. If you buy a house, you've locked in the monthly payments for thirty years while rent will keep going up. If I'd kept my house on S. Graham in Friendship that I'd bought in 1990, the monthly payments would still be close to the $500 that we were paying back then. There's no way that you could rent a house in Friendship for less than twice that price now. Of course insurance and taxes go up but nothing near the rate that rent goes up.

We've been in our house for six years and plan to retire here but we've already seen Northside rents skyrocket in that half a decade. Who knows what they'll be in 2037.

This is kind of what I posted above. This is why I bought a duplex 8 years ago as my first home. It helped to offset my monthly payment and I knew that if I ever needed or wanted a single family, I would keep the duplex and rent it out. That's exactly what I did, but I refinanced into a rate below 4% from my 6.75% rate from 2005 a year before buying my new house. Now I'm setup with some supplemental income as well as a retirement plan.

Also rates are still below 5%. now is the time to buy something you'll stay in long term because rates are already creeping up, but are still historically low.

[Hopes]

I have always been impressed with how affordable roofs are to replace considering how big they are. Of course, the smaller the house, the less expensive the roof because it requires less materials. My husband and I have replaced two roofs ourselves, and we hired someone to replace the roof on our house simply because we were busy and didn't want to bother. It's not very technical work and the materials are reasonably priced. Plumbing is another thing that doesn't require rocket science. Although the price of water heaters has increased, they're still not a huge expense to replace.

The biggest expense is a furnace or boiler. This is the one item you can't live without until you have money to replace it. If a roof leaks, you can repair it temporarily until you have money to replace the whole roof. Often furnaces and boilers simply need to be repaired. Those costs aren't very much. Our repair costs have ranged from $300 to $800. When I needed to replace the boiler, it was around $5,000. If you don't have money sitting in a savings account, you better have good credit. As someone said, furnaces and boilers only die in the winter because we only use them in the winter.

Oh, wait. Add the sewer line to the list of things that are expensive and need to be fixed immediately. My husband and the neighbors dug up ours. If you're hiring someone to do it, the farther your house is away from the street, the more expensive it is to replace a sewer line. I've heard horror stories of it costing a fortune to replace sewer lines. I know someone whose sewer line cost over 10k. If you're worried about money, definitely buy a house that is close to the street. It's preferable to not have a house in a huge hill from the street because sewer lines can be 10 feet down if the yard is a huge hill. Our yard isn't very high from the street and our sewer line was 7 feet deep.

[Stijl Council]

Originally Posted by SteelCityRising

Now comes the "maintenance/renovations" aspect. It seems like everyone on here lives in a piece of garbage house because they say they spend "thousands every year on repairs" as they tell me I'm not ready to be a homeowner. In my example I'm going to presume I'll start by spending ~$10,000/yr. on renovations/repairs/maintenance, but as the more critical and expensive replacements and repairs are finished that number SHOULD decrease over time---not stay constant. A new roof on a small house may run a few thousand dollars. Ka-ching. No big deal, though, because a new roof SHOULD last for 30 years (or longer). I used to work at Lowe's, and I know it doesn't cost "thousands" for a new hot water heater, especially if you install it yourself. That should run well under $1,000 for the item itself and accessories/parts. A new furnace (and installation) will be a few thousand dollars, also, but, just like the roof, a new furnace should last at least 20 years---if not longer. So even if I buy a $50,000 home needing work let's presume the first year I replace the roof. Then the next year the water heater and furnace simultaneously go. Then the next year I find out I have foundation issues and need to water-seal the basement. After that I decide to replace the sidewalks and driveway (if applicable). The following year I put in newer energy-efficient windows. Yes, it DOES cost thousands of dollars to repair/renovate/maintain a home, but once you do any of these things you shouldn't have to do them again for a VERY long time unless you're incompetent and screw up the installation and void warranties in the process.

That sounds about right. We spent about $6000 replacing our roof, and our house has a very small footprint. New furnace was $5000 after the old one died, but we knew it was on the older side (and at least in that case the newer one was much more energy efficient so we're slowly making that back).

We had two major basement repairs and a replacement of our concrete porch that were both over $5000 (the first one failed about two months outside of the period for which the contractor guaranteed it; we went with another contractor and had a completely different repair done and have had no problems since.) We replaced our insulation for energy benefits; I forget how much that was, but it was at least $1000.

In the time we've lived here we have replaced all of the (really old) appliances; we got good sales or went to scratch-and-dent for all of them for a total of around $3500 for a fridge, dishwasher, oven, washer, and dryer. Everything else we've spent on the house has been cosmetic, relatively minor plumbing and electrical, and some optional electrical upgrades and network drops. Still, over eight years that's a total of over $25000, or over $3000 a year. For someone like the OP who wants to keep total costs under $7000 including utilities, that will make things very tight.

The things I anticipate coming up in the near-ish future are replacing the a/c, replacing the water heater (should be only a few hundred), and repointing the bricks. I do anticipate that our repair costs will be lower for the next 10 years or so.

[Tinare]

Originally Posted by Hopes

I have always been impressed with how affordable roofs are to replace considering how big they are. Of course, the smaller the house, the less expensive the roof because it requires less materials.

Just one thing in general to keep in mind with roofs is that ones with multiple pitches or gables will be more expensive to replace because they are more labor-intensive. I had a bit of sticker shock on mine because my little 1200sf cottage cost more than I expected because it isn't a simple roof. Not that it was so horribly expensive, just that my expectation was that because my house is small, the roof would be cheaper than average. It took the crew three days to complete and I think they even thought it would only take two. Also, get a lot of estimates. The high for mine was double the low.

[greg42]

Are you happy with what you get at $600/month renting? If so, I'm not sure I'd buy into anything else.

Even if you buy a super cheap house, if you can find one in a neighborhood you're happy with (a la resident expert PreservationPioneer), there's still the maintenance costs. If it's not one thing it's another. There's almost always something. And if you buy a house at exactly the wrong time, there could be a whole chain of somethings. Hehe.

Maintenance things on a house are just annoying. Unlike renovations these don't really increase the value of your house just preserve it.

The most expensive thing I did or will ever do to the house most likely is the drainage work I had done outside. There's very little to see and it only helps so much. But without it I think stuff could have gotten a lot worse and lowered the value accordingly. The roof should cost much less than that, haven't done yet but really need to do it next year rather than risk problems. (I'm at 30 years already, original roof.) This is a ton of stuff I ended up having to put into the house now that I think about it. Choose wisely if you buy. The value may still end up ahead for me but it's close with all the stuff I've done.

[trackstar13]

One of the things I have not seen mentioned in this thread about replacing a roof is that many of the prices being quoted seem to be for basic shingle roofs on smaller houses with no unusual situations or issues. If you have a complicated roof line, your chimney needs tuckpointed and re-flashed, you need new gutters, sheathing needs replaced, you have a low slope roof on a detached garage or a porch, you want/need ice guard, etc. these things and more can all add to the cost. Many people don't consider the complexity of a roof when they buy a house, they just think of the size. A friend of mine in Pittsburgh with a roughly 1,100 square foot house just recently (right before winter) spent over $12,500 replacing his roof and gutters. This included a rubber membrane for the low slope roof on the large (25 x 20) porch attached to the back of the house with an interior addition that is also (25 x20), a rubber membrane on his single car garage with attached shed, shingle roof on the house with ice guard, and new gutters on everything except the garage because the gutters were all sagging and there was also some fascia work done in addition to the drip edge because of former storm damage. They also had to remove two leaky skylights from the attic and just put sheathing where they used to be and almost all the sheathing on the porch and garage had to be replaced because the previous owners had used so many layers of rolled roofing that the wood was pretty rotten under there. One of the workers actually fell through into the garage during tear down. I am glad I have never had to deal with a complex roofing situation like this before, but my friend's situation has definitely made me aware of issues and costs associated with low slope roofs and if I ever look at a house with a large area that has a low slope roof, I will definitely consider this issue when making an offer, because rubber roofs can be very expensive and I think my friend said that the roofs for his addition and garage ended up being more than the roof for the main house.