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I'm not sure about the rest of the country, but where I live I'd never be able to afford to live in as nice a place as I do if I were to buy. If I buy, I can afford a shack in an average neighborhood. If I rent, I can afford a really nice place in a great neighborhood.
Times change... I've met a few reluctant (as in not looking to own) homeowners... they were long time renters and the owner passed so the family asked them if they wanted to buy... they ran the numbers and it worked out for them
Renting almost always allows a person to be in a better school district/neighborhood for less upfront than buying.
The downside is you miss out on leveraged appreciation when and if it occurs again.
Last edited by Ultrarunner; 11-30-2010 at 03:23 PM..
We are renters... and no, I do not want to rent forever.
It feels unstable to me... the LL could decide to sell, or he could die (god forbid), or he could simply decide to change policy/raise rent. I know things can happen when you own that could cause instability, such as lossing a job. But with something like that, at least you have some ability to remedy the situation. With a LL, it's out of your hands, completely.
Not just that though... I want to be able to make my house my *own*. I'm so so sick of white walls. I'm sick of cheap, tacky repairs when something happens. I'm sick of someone telling me I can only have just one car in the driveway or just one dog (though I'm lucky to be able to have any pets). I'm sick of the cracked tile and the rickety fence and the simple fact that I have to ask permission if I want to replace the old, ugly, broken towel racks in the bathroom. Yes, I can spend the money to fix things up. And I have, to a degree. But when you don't know if or when you may have to move out of the place (due to the reasons I noted above) there's only so much money you want to put into a place that's not yours.
Our LL has offered to sell us our current rental. We are giving it serious thought. It's no palace... but it's no worse than other houses in our price range would be. Our monthy cost would go up slightly, but not horribly. Yes, we would no longer have the LL failsafe in the event of an emergency, but even still it's beyond tempting.
Times change... I've met a few reluctant (as in not looking to owne) homeowners... they were long time renters and the owner passed so the family asked them if they wanted to buy... they ran the numbers and it worked out for them
Renting almost always allows a person to be in a better school district/neighborhood for less upfront than buying.
The downside is you miss out on leveraged appreciation when and if it occurs again.
I've been giving this a lot of thought. Maybe the answer is to do both. I own but I want to upgrade to a better neighborhood. However, I can't afford to buy, but I may be able to rent. I can rent out my home, rent in a better neighborhood and keep my money in the bank.
I guess renting forever is a viable option if you have the means to build wealth other ways.
I've been giving this a lot of thought. Maybe the answer is to do both. I own but I want to upgrade to a better neighborhood. However, I can't afford to buy, but I may be able to rent. I can rent out my home, rent in a better neighborhood and keep my money in the bank.
I guess renting forever is a viable option if you have the means to build wealth other ways.
Owning a rental is one way into the world of business... many are successful and recently... many would be Landlords have walked away.
Two high school friends of mine married right out of high school and a year later had their first child... they were both going to college, working part time and hated renting... loud and drunken neighbors.
They bought the most run-down home in East Oakland because it was what they could afford... parents on both sides were aghast... you could see the stars at night from the kids bedroom because the roof had rotted away from years of neglect.
Not to go into a long story... they, at 20 years old with a child and being full time students bought a home and they repeated the process 5 times... they now live high in the Oakland Hills in one of the best zip codes... they are both public middle school teachers... it can be done.
Owning a rental is one way into the world of business... many are successful and recently... many would be Landlords have walked away.
Two high school friends of mine married right out of high school and a year later had their first child... they were both going to college, working part time and hated renting... loud and drunken neighbors.
They bought the most run-down home in East Oakland because it was what they could afford... parents on both sides were aghast... you could see the stars at night from the kids bedroom because the roof had rotted away from years of neglect.
Not to go into a long story... they, at 20 years old with a child and being full time students bought a home and they repeated the process 5 times... they now live high in the Oakland Hills in one of the best zip codes... they are both public middle school teachers... it can be done.
I love your stories. I like the thought of having my own business even if the profit is marginal.
My situation: I have a husband, a kid, a dog, and two cats. I'm putting 5% of my income into a 401(k), I pay into a pension (not sure how much of my income there), and we put 1-5% more of our income into savings each month (depending on unforseen expenses like car repairs).
I've run the numbers on a few of those "rent or own" sites, and they always tell me it would take 25-30 years for owning to be better for us financially than renting (housing is expensive, both where we live and where we're moving). We're always going places on the weekend, neither of us have any talent for home repair/improvement, we don't care what color the walls are, and while I would like another dog, it isn't a dealbreaker for me. We've never had much trouble finding a rental home that allows pets, and we can afford a nicer place via renting than we could through owning. Honestly, I have yet to encounter circumstances that would make me want to own a home.
OTOH, I could see how someone else in different circumstances would prefer to own. That's just not me or my circumstances.
So, I guess I'm saying that I think the question should be answered on a case-by-case basis.
So many people seem to believe that owning a house is one of the most important things a person can do.
But if you don’t want a family and are just happy with a partner and a pet, what’s the difference?
I don’t know if I want to spend the next 30 years of my life paying off a house that I am going be too old to appreciate by the time it’s finally paid off.
I don't think you need to make a decision now about whether you want to rent forever. The question you need to answer is whether renting NOW is the right housing solution for you. The rest of your life does not need to be scripted now. If you decide that you want to buy (or not) in 2, 5, 10 or 20 years you will be able to make that decision.
I've been giving this a lot of thought. Maybe the answer is to do both. I own but I want to upgrade to a better neighborhood. However, I can't afford to buy, but I may be able to rent. I can rent out my home, rent in a better neighborhood and keep my money in the bank.
I guess renting forever is a viable option if you have the means to build wealth other ways.
The numbers don't work. For me, it is better to buy a second property down the line.
Owning a rental is one way into the world of business... many are successful and recently... many would be Landlords have walked away.
Two high school friends of mine married right out of high school and a year later had their first child... they were both going to college, working part time and hated renting... loud and drunken neighbors.
They bought the most run-down home in East Oakland because it was what they could afford... parents on both sides were aghast... you could see the stars at night from the kids bedroom because the roof had rotted away from years of neglect.
Not to go into a long story... they, at 20 years old with a child and being full time students bought a home and they repeated the process 5 times... they now live high in the Oakland Hills in one of the best zip codes... they are both public middle school teachers... it can be done.
This can't work anymore, at least not in oakland. The reason they got rich is because the houses they bought are now worth, conservatively, thirty times what they paid. that will not be repeated in the next 20 years. so to would-be landlords, you have to make the numbers work, meaning your rent has to cover your expenses and then some.
This can't work anymore, at least not in oakland. The reason they got rich is because the houses they bought are now worth, conservatively, thirty times what they paid. that will not be repeated in the next 20 years. so to would-be landlords, you have to make the numbers work, meaning your rent has to cover your expenses and then some.
Not true at all... at least in my City of Oakland California
Homes in some areas are selling at 1990 prices.
I know one home that sold for 80k in 1991 and sold again for 510k in 2007. An investor picked it up for 80k cash in 2009. His tenants pay $1,750 a month and receive Section 8 assistance.
80K in the bank at 2%... about 10 times the average rate, is $1600 interest in one year.
Property Tax on 80K is under $2,000 with all the added assessments.
I've never seen anyone that bought a home in the last 25 years realize a thirty fold return... conservative or not.
There are a few that bought City Owned Homes in the mid 1970's for $1 with the provision they live in the home for 5 years and make a few thousand dollars of improvements to get title... that was more than 35 years ago and those dollar homes are still standing.
There are currently well over a hundred homes in Oakland priced less than a 100k and the investor market is very active with cash buyers.
My second home was facing condemnation when I bought it for $11,500 in 1982... I lived in it and made it nice... the home today is worth about 150k
Last edited by Ultrarunner; 11-19-2010 at 06:01 PM..
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