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Ha, ha! Renting has been a great experience. My landlord takes all the risk. I just pay the rent and wait for prices to stabilize and start rising again. Meantime, home prices in my area are down, down, down and no sign of a bottom anytime soon. Maybe next year or 2012??
So, you've been renting for 2 years at $2k a month. You've already thrown away $48,000 in rent with no tax write-offs of ownership and you're willing to do this for another two years? That's $96,000 down the drain! Even if you bought something and took a loss on it, you would have interest rates to write off, taxes to write off, the benefit of home ownership to write off... but instead you will have spent $96k and have nothing to show for it, as more than likely, you wouldn't even consider buying one of the homes you're renting, and you would be in a more realistic price range for the area.
So, you've been renting for 2 years at $2k a month. You've already thrown away $48,000 in rent with no tax write-offs of ownership and you're willing to do this for another two years? That's $96,000 down the drain! Even if you bought something and took a loss on it, you would have interest rates to write off, taxes to write off, the benefit of home ownership to write off... but instead you will have spent $96k and have nothing to show for it, as more than likely, you wouldn't even consider buying one of the homes you're renting, and you would be in a more realistic price range for the area.
Not the smartest move in my book...
Spoken like a true Realtor! The NAR fuzzy math at it's best. Down the drain. heh
Tell that to the $800B in underwater mortgages and try to convince them of the "benefit of home ownership to write off".
The OP could have easily saved TWICE that 100k in lost value, maintenance, realtor commissions, etc. In fact they probably did.
I understand part of the OP's desire to rent instead of own in an area where prices for renting are far more favorable than they once were for ownership -- should prices continue to decline and rent remain an affordable option that really does make sense.
On the other hand if the money that would otherwise be commitment to ownership (which includes the additional amount that a mortage and taxes and upkeep) was the only thing that mattered about owning. Vs renting I suspect generations of Americans would not have the strong desire for ownership.
As a former landlord / investor in single family homes I know that when my needs change it impacted my tenants, I tired to be sensitive to minimize hiw ts effected people with kids and this with extended families. Owners have much mire stability. Ownership is good for economy in other ways too -- landlords sort of keep property in "holding pattern" by owners frequently take the effort to really move property uo a notch. Renters rarely get involved in community, owners tend to be much more civic minded.
Don't forget too that if the OP is spending the dough that he would otherwise be socking toward mortgage the impact of their "net worth" is not real good. Sure one could invest the dollars "unspent" on a mortgage, but right now most investments are not exactly blossoming either.
I do not want to see an deflationary spiral continue without end, and my gut says most of the problems we now see are caused by uncertainty that could be resolved by politicians being mire responsive to the mostly legitimate desires of constituents to stopping the BS / lies about taxes and large, expensive government.
WHEN that happens it could grey well trigger some steep / rapid price changes that might leave some folks feeling like some one changed the pace / rules of "musical chairs"...
I understand part of the OP's desire to rent instead of own in an area where prices for renting are far more favorable than they once were for ownership -- should prices continue to decline and rent remain an affordable option that really does make sense.
On the other hand if the money that would otherwise be commitment to ownership (which includes the additional amount that a mortage and taxes and upkeep) was the only thing that mattered about owning. Vs renting I suspect generations of Americans would not have the strong desire for ownership.
As a former landlord / investor in single family homes I know that when my needs change it impacted my tenants, I tired to be sensitive to minimize hiw ts effected people with kids and this with extended families. Owners have much mire stability. Ownership is good for economy in other ways too -- landlords sort of keep property in "holding pattern" by owners frequently take the effort to really move property uo a notch. Renters rarely get involved in community, owners tend to be much more civic minded.
Don't forget too that if the OP is spending the dough that he would otherwise be socking toward mortgage the impact of their "net worth" is not real good. Sure one could invest the dollars "unspent" on a mortgage, but right now most investments are not exactly blossoming either.
I do not want to see an deflationary spiral continue without end, and my gut says most of the problems we now see are caused by uncertainty that could be resolved by politicians being mire responsive to the mostly legitimate desires of constituents to stopping the BS / lies about taxes and large, expensive government.
WHEN that happens it could grey well trigger some steep / rapid price changes that might leave some folks feeling like some one changed the pace / rules of "musical chairs"...
The government has perpetuated the "pride of home ownership" and provided policy for a very long time geared to getting people into debt (er - I mean houses). There are no "rules" saying you have to own. Heck, if the govt pulls back the tax breaks for owning (as rumored) there would be ZERO financial drivers to own over renting. Not until renting comes in line with the full cost of ownership will any argument of owning vs. renting even come into play. The idea that renters aren't "civic minded" is ludicrous to me. I mean - wow... The "owners" you refer to are mostly only doing what they're doing to "protect their investment". It's completely broken.
BTW - None of the debt has gone away - in fact, it's grown by unimaginable factors exponentially... They're trying to inflate everything to offset it via fancy economics, but guess what - it ain't working. The "publicly known" US debt is rapidly approaching our GDP (which will be going down in no time soon)... They'll call it a double dip, but they only "ended" the previous recession by pumping more debt into the system. Deflation is coming - hard and so is more housing declines. Look around globally.
The idea that renters aren't "civic minded" is ludicrous to me. I mean - wow... The "owners" you refer to are mostly only doing what they're doing to "protect their investment".
I agree with Chet on this one. I, too, believe that owners are more interested in spending their time improving their community, as they expect to be living long term in their location, where renters are generally more transient (obviously there are exceptions). Whatever the reasons for owners putting more effort into improving a community, that is the way I see it too...that's how I have felt in my rent vs own experiences.
I agree with Chet on this one. I, too, believe that owners are more interested in spending their time improving their community, as they expect to be living long term in their location, where renters are generally more transient (obviously there are exceptions). Whatever the reasons for owners putting more effort into improving a community, that is the way I see it too...that's how I have felt in my rent vs own experiences.
Fair enough - it was popular opinion back in the day that "rentals ruin a community" (or something along those lines). But, when was the last time you rented? We're talking about today - the time of "strategic defaults" and short sales. Those "owners" are not interested in "improving the community" - they're cutting bait and walking with no regard to what they're doing to the community.
Fair enough - it was popular opinion back in the day that "rentals ruin a community" (or something along those lines). But, when was the last time you rented? We're talking about today - the time of "strategic defaults" and short sales. Those "owners" are not interested in "improving the community" - they're cutting bait and walking with no regard to what they're doing to the community.
Yes, I do agree that people have their own self interest in mind when making decisions, as they should. No matter how self-less someone appears, there is always an aspect of selfishness in their decisions. It is just in the self-interest of the person that will live a long time in a community to be more community minded.
We bought a house last year that a guy owned for three years. He lived in it for 1, then tried to sell. He didn't get his price so he rented it out for 2 years with zero maintenance. Obviously, the home lost appeal when he tried to sell again. The house needed lots of work. In the end it was the owner, not the renter, that was hurting the neighborhood.
Fair enough - it was popular opinion back in the day that "rentals ruin a community" (or something along those lines). But, when was the last time you rented? We're talking about today - the time of "strategic defaults" and short sales. Those "owners" are not interested in "improving the community" - they're cutting bait and walking with no regard to what they're doing to the community.
Normally one of the 1st signs of a subdivision in decline is "For Lease" signs. There are exceptions, but normally a renter will not give the home the TLC an owner will and it will show neglect on the outside. You get a lot of lease homes in an area and problems start to trickle into the schools, which can then struggle.
Once the neighborhood and schools start to struggle, problems can create new problems. One of the reasons many cities restrict the number of apartments built in their school districts.
So, you've been renting for 2 years at $2k a month. You've already thrown away $48,000 in rent with no tax write-offs of ownership and you're willing to do this for another two years? That's $96,000 down the drain! Even if you bought something and took a loss on it, you would have interest rates to write off, taxes to write off, the benefit of home ownership to write off... but instead you will have spent $96k and have nothing to show for it, as more than likely, you wouldn't even consider buying one of the homes you're renting, and you would be in a more realistic price range for the area.
Not the smartest move in my book...
You're discounting realtor fees, closing costs, home maintenance costs, insurance premiums, HOA fees, utilities etc.
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Mixed feelings...
