Is it me, or is buying a whole lot cheaper than renting.

[housingcrashsurvivor]

Originally Posted by 58robbo

i think this number is a little optimistic. with all the vacant inventory about, sooner or later this will end up on the rental market. as that market becomes more competitive for ever decreasing quality tenants, i think rents will drop a little.

i do agree with you that i can't think of a better investment.

I think what you say can be true in some areas, not in all. As I noted, by the price I got, that number is not even close to optimistic--unless the entire economy collapses and then it is anyone's guess--as I bought at a p/r ratio of about 7:1. Optimistic? Heck, if I wasn't so scared about what I'm doing I'd be ecstatic. Even after fixing the place up (not to mine but to good rentable standards), were I to remain in my south Florida home, I'd get about 9% from rents on these after expenses based upon their price.

And even if rents were to tank by another 20% after they have already fallen in step with the crash, then I'd still have bought at a factor of 8.9:1. The selling prices today (not necessarily the asking prices) are that good. Plus I purposely bought into an area with a consistant pool of renters (the university) having this in mind as part of my criteria in relocating because I am so uncertain as to the future of this economy.

So even while I agree that rents might come down in the short term (though it seems to me that they've already done that) and, as I've been watching foreclosures carefully, I've noticed a decline in them in both my area of south Florida (a steady 15% decline of foreclosed inventory per realtytrac just in the last three months) and I've never noticed them in my new area much at all--but for the apartment complexes which don't concern me as much--where there are very few distressed single family houses.

As well, I think the inflation we are likely to witness within five to ten years as a result of all the stimulus spending will pull those rents up much farther than they've fallen and more than making up for any decreases to rents now.

For me that could play out well; for someone leveraged with a fixed mortgage it could play out very well. I suspect, this might be why it is so difficult to get financing today, because maybe the banks "suspect" the same?

[algia]

One more thing...I think some people feel almost forced to buy because of;
1. Rent increases, which is not justified at all because the guy's mortgage doesn't change every year and even if it does it only either goes down due to refinance or shoots up thanks to interest rates in which case they may foreclose...in either case that is NOT the renter's business/problem and the renter should NOT be subject to such unjustified raises.

And
2. Because of all this "status fuss"....people should be able to do what is right financially for them and not be forced to choose to buy because "it is better" somehow....while is better for some it can be really bad for others....

AK, I say this, get a financial advisor, evaulate your employment very very WELL, ALWAYS have plan B ready to go and ONLY THEN decide which is cheaper for YOU not the Jones next door. Because those Jonses are just as open to loose everything at some point and no one will want to keep up with THAT!!!

Rent first, spend some time exploring our area, see if this is a place where you can see yourself in 10/15/20 years from now....see if your job can last that long....see what's available in your fiels should this job go to hell...Then you will have a much better idea where you stand and what is cheaper for YOU! Being house poor is no fun....

[Keeper]

While I always bought a house with the idea that at least I could claim the interest and taxes off of my taxes, I also figured if I had to sell it for what I owed, I had lost nothing since I would have nothing if I had rented. My payments were always cheaper than rent if you consider the size of apts vs houses.

I agree with Algia that you need to make sure you like the area and the weather. I see so many folks on here who hate this or that about where they live, I wonder why they don't leave, but I have also seen those same folks leave and come back to FL realizing FL wasn't so bad after all..

Rent for at least 6 mos at least to be sure that the job is secure and give you time to find that perfect spot for you and your family.

[Maggi07]

Originally Posted by AlaskaKash

Before you start... yes, I know buying is cheaper than renting in the long run. But looking at home prices in the Tampa area, figuring in property taxes and insurance it looks like it is a heck of a lot cheaper per month out of pocket to buy right now than it is to rent. When I owned a home in Austin it was sort of the opposite. Renting was less expensive at the time than buying but you knew eventually the rent would go up while your payment stayed the same and you developed equity (didn't work so well here in Florida...the equity part). So let me ask you guys..... or is it just me.... does it look like you can save HUNDREDS per month by buying?

For us, yes, buying would be MUCH cheaper. But we need significantly bigger house than the one we are renting and we are not willing to go through the whole buying and owning thing again until it is the house we plan to stay in forever. Also, we still own a house up north and I'm not even sure we *could* buy a house, based on that.

I can't wait to buy again. I am not liking the renting thing at ALL.

[FloridaKash]

Originally Posted by algia

AK, I say this, get a financial advisor, evaulate your employment very very WELL, ALWAYS have plan B ready to go and ONLY THEN decide which is cheaper for YOU not the Jones next door.

Rent first, spend some time exploring our area, see if this is a place where you can see yourself in 10/15/20 years from now....see if your job can last that long....see what's available in your fiels should this job go to hell...Then you will have a much better idea where you stand and what is cheaper for YOU! Being house poor is no fun....

My employment is fine. I have been working for the same company for the last 7 (or is it 8.... ah geeze) years. Being in Alaska I am currently working remotely for them, so being in Florida is pretty much the same but a lost less expensive for me to visit my main office located in Austin. Looking online it appears there is a fair amount of jobs for my field in the Tampa area. I work in Insurance and Financial Services as a Business Analyst. I am willing to rent a 3 bedroom but would not buy anything else than a 4... since my kids will be getting bigger and should not have to share a room.

Originally Posted by Keeper

I agree with Algia that you need to make sure you like the area and the weather. I see so many folks on here who hate this or that about where they live, I wonder why they don't leave, but I have also seen those same folks leave and come back to FL realizing FL wasn't so bad after all..

Rent for at least 6 mos at least to be sure that the job is secure and give you time to find that perfect spot for you and your family.

Yes, DW and I have been speaking about settling down in an area. We do plan on living there for 6 months - 1 year before buying a house if we decide to go that route. I don't see why we wouldn't like it... but you never know. Thanks for the direction.

Originally Posted by magijasakymaro

For us, yes, buying would be MUCH cheaper. But we need significantly bigger house than the one we are renting and we are not willing to go through the whole buying and owning thing again until it is the house we plan to stay in forever. Also, we still own a house up north and I'm not even sure we *could* buy a house, based on that.

I can't wait to buy again. I am not liking the renting thing at ALL.

[Pragmaticus]

Originally Posted by AlaskaKash

. I am willing to rent a 3 bedroom but would not buy anything else than a 4... since my kids will be getting bigger and should not have to share a room.

See, this is what I always observe people do.

When you rent a smaller size but plan on buying bigger, the comparison between buying and renting is apple to orange. Becareful making decision on that.

Good luck which every way you take.

[Viv9]

In the real estate market here in Florida you can find some "good deals" right now in Short Sales. It is the time to buy but not sell. I am a realtor here in Tampa Bay area and many of my buyers have been able to find really good values. Short Sales can take a longer time to close as there is a third party involved (the lender) in the negotiation and closing process. Let me know if I can help.

[nucat78]

Originally Posted by housingcrashsurvivor

--unless the entire economy collapses...

Should that happen, then this whole debate becomes moot. At least I can eat my dog when the food supply chain shuts down...

(I'm only half joking... )