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Old 05-25-2011, 07:55 PM
 
Location: Columbia, SC
10,908 posts, read 21,876,670 times
Reputation: 10544

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Quote:
Originally Posted by bigfatturkey View Post
just the property tax on my current rental is already over $8,500/yr.
I don't know about your area but here owner occupants get a tax break on the property taxes. What would be taxed at about $4000 a year is about $1600-1800/yr with the discount. You should check on the tax break in your area to see if it's applicable.
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Old 05-26-2011, 09:44 PM
 
3,128 posts, read 6,505,560 times
Reputation: 1599
Its b/c the banks and media and Greenspan shoved "the American dream" down peoples throats. There is a sense if you don't own, you are a failure and "have no skin in the game".

It used to be a house was a HOME, something to move in, grow in and pass on. Houses then became investments and something to "flip".
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Old 05-28-2011, 08:31 PM
 
92 posts, read 269,935 times
Reputation: 98
If you're renting you're paying someone else's mortgage.

Who's in a better position? You or the person you're paying?
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Old 05-29-2011, 12:15 AM
 
2,879 posts, read 7,756,857 times
Reputation: 1183
loseconomicos.com - Anuncios Clasificados Hermosillo, Sonora
I wonder if they listened to Greenspan in Hermosillo. Translation "Attention Investors".
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Old 05-29-2011, 04:29 PM
 
Location: Austin Texas
13 posts, read 18,158 times
Reputation: 27
The math is pretty simple. Unless your house is dropping in price so fast and you bought at the height of the market so that you are severly underwater and there is no sign that it will ever reach those highs again, owning will more likely be better than renting. Unless your pmt is 2-3x over comparable rent, then I don't see how owning would be financially worse than renting. If you payment is 2-3x over renting, then I would say you overbought for your financial situation. Next time try staying within a more reasonable budget.

Rent
Good = no cost for major/minor repairs (unless you caused the damage) or maintenance.
Goot = little more freedom/flexibilty to change locations.
Bad = paying some or all of someone else's mortgage. Once you leave, you get nothing but a deposit (and you may not even get all that back).
Bad = rent in many cases is near equal the cost of a mortgage pmt. and in some cases more
Bad = owners can sell property out from under you. Happened to me twice.

Own
Good = Your payments continue to drive down the loan. Even if house price is stagnant, you continue to build equity as the loan amount drops.
Good = you can put nails in the wall and hang pictures without feeling guilty. Decorate as you see fit.
Good = Stability. Great if you have small kids. Pretty hard on a child that to continually uproot them from their friends.
Bad = Major repairs can be expensive. (doubtful it would be equal to a years rent as others have suggested but still damn expensive)

I was paying $1800 a month rent for a 3 bedroom house and it was continually increasing every coulple of years. I bought a 4 bedroom house and my payment + taxes were $1700. My tax returns are now larger because of deductions.

I thought I read a few pages back someone said that with the interest, maintenance, etc. you are paying a lot more being a home owner. While that might be true, renting you are still paying out those funds and you have 0 chance of ever recovering any of it. With owning, even it a tough market, you can recapture some of that back when you sell.

Overall, owning is better than renting.
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Old 05-31-2011, 06:09 AM
 
5,458 posts, read 6,697,921 times
Reputation: 1814
Quote:
Originally Posted by Cre8tive Apps View Post
The math is pretty simple. Unless your house is dropping in price so fast and you bought at the height of the market so that you are severly underwater and there is no sign that it will ever reach those highs again, owning will more likely be better than renting. Unless your pmt is 2-3x over comparable rent, then I don't see how owning would be financially worse than renting.
Then take a look at someone who has done the math for you : Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com
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Old 05-31-2011, 06:20 AM
 
22,768 posts, read 30,631,031 times
Reputation: 14737
Quote:
Originally Posted by Cre8tive Apps View Post
The math is pretty simple.
The math is not simple. You left out a few things, particularly the transaction costs. Or the fact that renting is cheaper in many places, and the fact that rent has been deflating more rapidly than home prices in some areas. You also downplay the role of mobility, and the risk of having to bring money to the table if you need to sell.

Last edited by le roi; 05-31-2011 at 06:29 AM..
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Old 05-31-2011, 09:39 AM
 
4,536 posts, read 10,591,995 times
Reputation: 4068
The part about paying someone else's mortgage is irrelevant and ought not play any part whatsoever in one's decision as to whether or not to rent or buy.

Its a stupid, emotion based argument perpetuated by people looking to self justify their decision to purchase in a bizarre backdoor attempt at schadenfreude where none actually exists.
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Old 05-31-2011, 12:00 PM
 
Location: Western North Carolina
143 posts, read 367,864 times
Reputation: 110
Quote:
Originally Posted by KCfromNC View Post
Then take a look at someone who has done the math for you : Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com
Excellent article KC... thanks for sharing!
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Old 05-31-2011, 12:45 PM
 
Location: Downtown Harrisburg
1,434 posts, read 3,910,795 times
Reputation: 1017
I don't know if this has already been mentioned, and I'm not digging through 120+ posts to find out. If it was, it bears repeating anyway.

I choose to rent because of the lifestyle it affords.

Five feet of snow dumped on the city overnight? Not my problem.

Dishwasher wears out and is in need of replacement? Not my problem.

Torrential downpour and the building takes on a few inches of water in the basement? Not my problem.

Drain line clogged? Not my problem.

Water main fails? At worst, an inconvenience.

I have a central location with incredible views from my top-floor apartment. We have no hirise condos here in Harrisburg, so my views aren't available for purchase at any price. I have dozens of dining, shopping, and entertainment options within walking distance, as well as a five-mile riverfront park with bike and jogging trails. I'm three blocks from the train station, four blocks from the beltway, and the bus stops at my front door. There are a handful of rowhomes for sale in the same general area, but none of them are as great as my apartment. Believe me, I've looked.

Our city is currently teetering on the verge of financial meltdown. Water & sewer rates may soar, police and fire protection will likely be slashed, taxes will probably skyrocket, road repairs may slow to a trickle, and property values will continue their decline. As has happened so many times to so many cities in the past, a number of local employers will probably seek greener pastures. This will drive up unemployment, which will drive down property values even further, which will erode the tax base, which will cause taxes to climb again, and the chain reaction will continue until we get our act together.

But you know what? If things get that bad, I can just leave. I don't have a mortgage, so I'm not tied to this area.

For that matter, if I find my dream job in Chicago or Philly or New York, my worst possible outcome is that I forfeit my security deposit. That's it. No selling the house at a loss (if at all), no becoming an accidental landlord, no worrying about being upside-down on a mortgage. Just a 60-day notice to my landlord. Done.

The potential equity I might lose by renting is not that big of a deal. If fiscal value was the only thing that mattered, we'd all be driving whatever the cheapest car out there is. While I could very easily afford to go buy a sensible house in the suburbs tomorrow, I wouldn't be happy, and it therefore wouldn't be a sound decision in any aspect that mattered.
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