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Some guy who rents for 40 years is probably not saving. My family rented to the same family for 23 years and it was kinda sad. They never saved a dime and spent everything they made, living from paycheck to paycheck.
They moved out in 2001 and the wife became a realtor, no kidding. I am sure they are still struggling. We have another 2 families that scrape by every month and pay the rent (never more than 10 days late) and never have saved a dime, one due to medical expenses for his wife and the other because the husband has trouble keeping a steady job while the wife waitresses.
Owners as a whole will be better savers than renters. I know there are exceptions as some of you have sold at the peak and are looking to get back in near the bottom, for which you can count your lucky stars.
Regardless of my take on long-time renters, NOW IS NOT THE TIME TO BUY. Waiting 12-24 months, depending on your market will may your purchase a much better buy. And, I do believe Dallas and NC will have slight declines with increased foreclosures as well, though nothing like much of what the rest of the country is experiencing.
I know someone who has rented the very same home for 40 years.. (no joke).. What does a renter have to show for alll of those years of renting?
I agree with you here. I know a lot of people prefer to rent and in today's market, people are being urged to rent. But honestly for me, unless I had no choice, renting would not be an option. First of all, it is so stressful enough moving a whole family. Then you are moving your family to something that might be temporary until you can find/afford a home. Then the next move happens. Your children will need to be uprooted again. More new schools, new friends. Very stressfull for all. In the meantime, you are paying someone else's mortgage, building up someone else's equity. You never feel sense of ownership or pride. You can't do all of things you may want to do to the house. I can see where people may be saving money which is never a bad thing, but as the years pass, where is the place you call home that really is YOUR home? Everyone has to do what is right for them, but even in today's market, if the price is one you can live with (and some of the prices are great right now), and you have found a place you really like, I would take the plunge. As long as you are not using it as a short term investment, you will take pleasure in knowing you and your family are in your own home. Life is too short to keep waiting for who knows what in the future.
Some guy who rents for 40 years is probably not saving. My family rented to the same family for 23 years and it was kinda sad. They never saved a dime and spent everything they made, living from paycheck to paycheck.
Quote:
Owners as a whole will be better savers than renters. I know there are exceptions as some of you have sold at the peak and are looking to get back in near the bottom, for which you can count your lucky stars.
Maybe so, but which is cause and which is effect? Would your average non-saver life-long-renter really do any better if you put him in a house for 0% down and mortgage payments equal to his rent? Would he build up equity, keep current on taxes, maintain and update the house? Or would he HELOC out the equity and spend it as fast as it built up?
I don't know, really. Does home ownership make someone responsible, or do already responsible people opt for home ownership?
Maybe so, but which is cause and which is effect? Would your average non-saver life-long-renter really do any better if you put him in a house for 0% down and mortgage payments equal to his rent? Would he build up equity, keep current on taxes, maintain and update the house? Or would he HELOC out the equity and spend it as fast as it built up?
I don't know, really. Does home ownership make someone responsible, or do already responsible people opt for home ownership?
Good question! I think from recent activities that we've found out that it's been the later... people who are responsible are responsible, and those that aren't are not... regardless of home ownership. Home ownership doesn't make one responsible.
Now with the increasingly stringent loan requirements, I think more financially responsible people are getting into homes. Therefore, if homes are still being bought now... then that means already responsible people opt for home ownership versus none home ownership.
Personally I think we've only seen the tip of the iceberg in regards to the HELOC phenomenon referenced above. Sadly I'm afraid many homeowners (especially in the boom areas) have not been building equity at all... they've been using their home as an extra wage earner via HELOC.
I agree with chuck22b, financially responsible folks will be so whether they are renting or buying and the same goes for financially irresponsible folks.
There are so many variables when deciding whether to rent or buy I have a hard time making a blanket statement one way or the other.
That said, in my market where selling price gains averaged around 7% a year pre-boom, but jumped as high as 26% in one year during the heyday... well, even with some prices currently 20% or so less than they were at the very top, I certainly think it's still a gamble to buy here right now.
Last edited by Axiom; 04-16-2008 at 03:20 PM..
Reason: thinking faster than I can type ;)
Depends on how much he was able to save renting versus paying the mortgage, taxes, insurance, HOA fees, upkeep and repairs. Could be a lot, could be a little, could be break even.
All things paid to the OWNER of said property by the RENTER in their monthly RENT. At the end of the day when the owner has paid off the house he is still going to collect the same amount in rent and RAISE the rent accordingly over time. There is not a owner of rental property out there that does not include ALL expenses of owning a rental property in the rent charged.
All things paid to the OWNER of said property by the RENTER in their monthly RENT. At the end of the day when the owner has paid off the house he is still going to collect the same amount in rent and RAISE the rent accordingly over time. There is not a owner of rental property out there that does not include ALL expenses of owning a rental property in the rent charged.
I'll concede that there's not an owner of rental property out there who wouldn't like to include all expenses of owning rental property in the rent charged.
But I guarantee there are some who are NOT able to do so right now in my area.
Of course many of them are frustrated owners who bought at the wrong time and are now unable to sell for a "fair price"
(translation: fair having much more to do with what they'd like to get than what current market conditions dictate)
So they've jumped on the rental bandwagon and are holding on waiting for the market to turn around.
(translation: spiral out of control again so as to rescue them from debt)
Oh, I know plenty of owners out there who are not including all expenses to the renter, my landlord does not make money on the deal we have. He just cannot sell right now for some reason or another.
So don't make generalizations, momof2...
People have different opinions and different ways of life...some of us PREFER to rent and NO we are not stupid for doing so!!
I work in the financial field and have been doing so for the last 13 years...I should know what is best for MY family.
Renting is many times better than buying especially in this day and age
Oh, I know plenty of owners out there who are not including all expenses to the renter, my landlord does not make money on the deal we have. He just cannot sell right now for some reason or another.
So don't make generalizations, momof2...
People have different opinions and different ways of life...some of us PREFER to rent and NO we are not stupid for doing so!!
I work in the financial field and have been doing so for the last 13 years...I should know what is best for MY family.
Renting is many times better than buying especially in this day and age
Maybe for YOU personally renting is better but not for everyone. I've been a landlord myself. Have many a good friend that own rental properties. Some have owned them long enough that they are paid for and most of the money coming in from rent is free and clear profit. Your landlord happened to buy a rental home in an area that was and is still overbuilt and homes for sale are a dime a dozen. Many renters in your area have been kicked out of their rentals because the "owner" was foreclosed on. Something that very well could happen to you IF the owner decides to skip out on the mortgage. Or when the market in your area turns he could then put it up for sale and the buyer want it as their personal property. All this moving can and does add up. We personally do not like to move and are very happy w/ our home and location. No need to sell but it wouldn't matter anyway as I'm not in an overbuilt area w/ houses flooding the market.
Renting for ME and MY family is NOT the better option. If your a financial expert then you might realize for many of us that buying and owning our homes is the BETTER financial decision to make and not renting. Even in this "day and age" there are plenty of people out there in the same boat as we are where owning/buying IS the best option over renting.
Maybe so, but which is cause and which is effect? Would your average non-saver life-long-renter really do any better if you put him in a house for 0% down and mortgage payments equal to his rent? Would he build up equity, keep current on taxes, maintain and update the house? Or would he HELOC out the equity and spend it as fast as it built up?
I don't know, really. Does home ownership make someone responsible, or do already responsible people opt for home ownership?
Well if he only paid his monthly 30 year fixed he'd have lived the last 10 years with no mortgage and have at the very worst a fixer upper that he could sell to cash out.
So...10 years w/o any payment plus whatever the home was now worth, which even in the worst markets is much more than was paid 40 years ago.
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