Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Again, this goes back to the issue of whether someone has a large lump sum of cash to INVEST vs. someone who is analyzing their budget for housing costs and where those costs net them the long term gain. If they can rent for less than they own and invest the rest, then they may very well come out ahead with renting. Howver, if they live someplace where comparable rentals are more expensive than owning, then ownership is the only option that builds any type of equity for them because they cannot invest money they do not have.
And so your personal analysis will be different than a couple with 2 or 3 kids who does in fact need to rent a 3 bedroom house rather than a 1 bedroom apartment. Just because their analysis is different based on different needs doesn't mean that the cost of renting a 3 bd house isn't what they need to compare against the cost of buying a COMPARABLE house.
Again, this goes back to the issue of whether someone has a large lump sum of cash to INVEST vs. someone who is analyzing their budget for housing costs and where those costs net them the long term gain. If they can rent for less than the cost to own and invest the rest, then they may very well come out ahead with renting. Howver, if they live someplace where comparable rentals are more expensive than owning, then ownership is the only option that builds any type of equity for them because they cannot invest money they do not have.
exactly what i am trying to convey . there are so many situations out there that are not i can rent for x or buy for the same amount .
the story's and situations are all over the place and no one way is going to be "the only way or best way "
More than 1/3 of all home sales are all cash deals so there certainly are a lot of buyers out there that have a choice of buy or rent and invest elsewhere.
Home ownership costs are always less if you buy new construction as opposed to an existing older home. Everything is new and will not have associated on going repair costs over the time you live there.
You pay a premium price for new construction. And if you stay in the home long term (20+ years), it will need repairs and upkeep
If renting were cheaper the landlord wouldnt rent it to you. Over a long enough time owning is always cheaper hence why landlords can profit off of renting out a house.
Short term, renting may be cheaper. But over a long term buying is always cheaper.
1. Rent goes up every year. Mortgage payment doesn't.
2. PMI eventually goes away even if it means refinancing.
3. Eventually, the house is paid off.
4. Equity is a safety net in case you need cash. Rent is getting evicted right after a missed payment.
My parents own over 70 rental properties. Upkeep on rentals is expensive. They don't only have to make repairs for the tenant but also for the insurance companies. Insurance companies have started inspecting properties EVERY SINGLE YEAR. If you don't make their required structural repairs, they will discontinue coverage. Insurance is getting more expensive for landlords in addition to property taxes. Profiting from rentals can be done but you have to make your money when you buy the house, not over time.
I disagree with this completely. We bought our current house brand new 7 years ago. We couldn't sell it right now for what we paid for it, partly because of the market in our area and partly because they are building new homes and people would rather have new. On top of that, we did a $50k backyard remodel that we'll assume for these purposes that we won't recoup a penny of. Plus upgrades, window treatments, routine maintenance and minor repairs, let's assume we've put $80k into this home since we bought it. Let's further assume that we could sell it tomorrow at a $100k loss after repairs (which is conservative based on comps) plus 6% to the realtors and some cash towards new carpet or whatever to get it sold.
Okay, so if I take that total loss... Meaning every single penny that we put into this house since the day we bought it (excluding utilities), but including property taxes and mortgage interest less the value of the tax savings on these two, after the sale... it has cost us less than $1,900 per month to live here. To rent our house (again, I looked up similar houses for rent in our neighborhood) it would cost about $2,000 per month. And almost all houses our size that are rentals require the renters to cover all landscape maintenance and routine repairs (but we're ignoring this for simplicity, even though I added them back above).
So even with taking a substantial loss on selling our house, we still are out of pocket less per month than it would have cost us to rent the house for the exact same period of time. Meanwhile we got to do whatever we wanted with the house. There were no restrictions on paint colors or pets or having an in-ground pool installed for great parties.
Yes, eventually we will need a new HVAC and a new roof and whatever other repairs, but our home value will also increase a little bit each year and rent prices will increase too. Plus as long as we don't have any other major issues, our monthly "rent" to ourselves should be more than enough to cover these system replacements by the time they are needed without changing the math to make it better financially for us to have rented instead. Plus, again, we get to enjoy our home our way on our terms.
So while I would never ever look at my home as an investment, it is a great place to live and raise my kids without being out of pocket any more than I would have been if I rented and had to live by someone else's rules.
You're trapped in your home unless you want to take a loss and sell it. If you would have rented a similar home, you would have the freedom to move on at any time. Renting provides mobility. Owning a home allows you to truly establish a "home" in my opinion because you can do whatever you want to do. I'm a renter and plan to keep renting until I settle down. I'm a realtor and I have seen so many young professionals get "stuck" in starter homes that they can't sell.
But that article compares HOUSE ownership versus APARTMENT rental, which is a ridiculous comparison.
I would like to read a well-reasoned article comparing owning the very same house versus renting it, and whether or not things such as water, gardening, appliances, etc. are included in the rental, which they often are.
Aside from young people, most others would much prefer to live in a HOUSE than an apartment.
I could never go back to an apartment.
The rents I am seeing for houses that I would like to rent start at $8.500 mo. and upwards (in the nicer parts of the SF Bay Area). It's awful, but buying the homes at the top of the market (or near it) cannot be justified financially.
I'm a Realtor. I rent a house/single family home. I considered purchasing this house last year and discovered it would cost me more to own it than to continue renting it. My rent is $730/month and INCLUDES bi-weekly lawn care and all maintenance repairs. My mortgage for this home would be $815/month + lawn care and any repairs. This home was built in 1950 so there would definitely be maintenance issues. One thing people NEVER include in these debates is the COST OF ACQUISITION and SELLING: inspections, down payment, closing costs, realtor commissions. I see home owners lose money every single day.
If you own, you don't have to worry about anything your landlord might do (sell, raise the rent, etc.) since you won't have a landlord. Also, there's no equity built up in renting. Our first house was paid for about eight years ago, it's now rented and is generating income. Our second house is now about two thirds equity and is also now rented and generating income. The third one is still a project in progress, but we're living in it. As far as most financial data sheets would calculate it, it's a pure liability and not a cash flow type of asset, but we have to live somewhere. It's being improved and at the moment there's about a twenty five percent equity but we just got it last October. Most of the work is being done by us so the improvement costs aren't that much. Cleaning, patching, paint, etc.
But, that's okay, if it's more expensive to own than to rent, well, we will always have renters for the properties.
Leases transfer with ownership of a property. So if you have a lease on a house and the landlord puts it up for a sell, the buyer must honor the lease.
good luck on that retirement . friday was 4 weeks for me as an un-employed bum and loving every minute .
Thanks, Mathj!! really appreciate your educational posts on here!! Sept 30 is my last day. Going to CR for a week and then Cooperstown and Niagra Falls Oct4-14 for my first "retired" vacation. then a move back to Sioux Falls to be near family, save about 20k a year ( no state income tax, rent is a third of what my CA rent is and I'm in a older condo ...and everything else is cheaper ...) and enjoy a very nice city...and I'm renting a brand new ...it's not even done yet ...very nice apartment with all the amenities including an indoor pool, fitness center, nice commons area, and heated underground parking and walkable to many nice stores, coffee shops, etc for $750a month.
I know ...I know.... But I have to be in cold weather....not really...I'll be traveling much of the winter with the additional 20k or so I can save .
If it doesn't work out, I can always move....there are other places I'd rather be and see than work so I'm done..who knows...maybe part time at some point to keep the mind busy...
You're trapped in your home unless you want to take a loss and sell it. If you would have rented a similar home, you would have the freedom to move on at any time. Renting provides mobility. Owning a home allows you to truly establish a "home" in my opinion because you can do whatever you want to do. I'm a renter and plan to keep renting until I settle down. I'm a realtor and I have seen so many young professionals get "stuck" in starter homes that they can't sell.
A realtor that rents? Kind of like a car sales person who rides a bicycle around isn't it? I think I would pass on using you.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
then a move back to Sioux Falls to be near family, save about 20k a year ( no state income tax, rent is a third of what my CA rent is and I'm in a older condo ...and everything else is cheaper ...) and enjoy a very nice city...and I'm renting a brand new ...it's not even done yet ...very nice apartment with all the amenities including an indoor pool, fitness center, nice commons area, and heated underground parking and walkable to many nice stores, coffee shops, etc for $750a month. 
