Housing: why own when you can rent?

[Interrobang!?]

I've lived in an apartment for the last ten years. My wife and I have been working on cleaning up our finances, and we're thinking about buying a home. (Unfortunately, since we want to stay in the city of Seattle, it's not going to be cheap.)

We've certainly gotten plenty of mail from various "interested parties" urging us to buy our own place and stop paying our landlord's mortgage.

In fact, it seems like most of the information dealing with the "rent or own" question is slanted in favor of ownership. I'd find that more persuasive if most of that information weren't being presented by banks, mortgage companies and other institutions who would like you to buy a home so they can earn your interest.

I can see what's attractive about owning your own place: you build equity and cut your tax burden. You don't have to worry about your upstairs neighbor being a noisy putz. You can play your stereo louder. You gain a "stronger sense of community," in the warm and fuzzy words of several brochures. And supposedly home ownership is the American dream, although I've never dreamed about it.

But I don't really look forward to bigger monthly housing payments (and right now, there's no way a house would be cheaper per month than our apartment). Or maintaining the house. Or the yard. Or moving to the suburbs because nothing in the neighborhoods we like is affordable -- at least, nothing that's not a lean-to.

I want to hear what other apartment-dwelling dopers think. I'm not looking for advice for me -- we're going to be in the apartment until debts are drastically reduced -- but I'm curious.

Why won't you buy a house? Why is renting the superior chioce for you? What are the holes in the house-buying lobby's arguments?

[Peach]

Owning a house (or condo) is an investment and you get back what you put in.
I highly recommend this site ---> www.seattlelistings.com

[greck]

The only way living in an apartment is cost effective is if you're going to move in the next few years.

I currently live in a co-op townhome, pay about half what rent would be (in co-op fees), and am building up some equity (had to buy in to the co-op, which we will get back when we sell our unit)

I don't know if seattle has that, but I'd guess it does, I really recommend it as a way to get ahead and prepared to buy a house.

[Doomtrain]

I'd like to buy a house one day, but our rent is much cheaper and we don't have the cash for a down payment at the moment.

That said, I like renting. If my toilet breaks, I call maitenance. If the grass needs cutting, someone else does it. If there's a squirrel in my wall, I hassle the people in the complex.

[Ego_Mk2]

Originally posted by Interrobang!?


I can see what's attractive about owning your own place: you build equity and cut your tax burden. You don't have to worry about your upstairs neighbor being a noisy putz. You can play your stereo louder.

Plus, you don't have to worry about the super/maintence greaseball screwing you by not fixing anything in a competent, timely manner and coming in and out all hours of the day and night (unannounced) due to "maintenance" issues.

But I don't really look forward to bigger monthly housing payments (and right now, there's no way a house would be cheaper per month than our apartment). Or maintaining the house. Or the yard. Or moving to the suburbs because nothing in the neighborhoods we like is affordable -- at least, nothing that's not a lean-to.

My house + insurance + utilities + monthly maintenance costs me LESS than what I was paying for an apartment, and it's 3x as big. I fully agree that such a situation is not possible in all parts of the country.

Why won't you buy a house? Why is renting the superior chioce for you? What are the holes in the house-buying lobby's arguments?

If you tend to move a lot, don't buy.

If your job entails lots of travel or just no home life, don't buy.

If you don't think you can learn how to fix household stuff yourself (you're wrong, BTW) don't buy.

If you hate the sound of lawnmowers on the weekends, don't buy.

[Khadaji]

At the age of 40 I bought my first house. I have always rented because I can afford to and hated the idea of having to do my own repairs, grass mowing, snow clearing, etc.

Now that I own, I still hate all of the above things and wouldn't mind renting if I could have found a house to suit close to work.

But I do like the new hot tub that I installed and am glad that I can now do such things.

[gwendee]

Where I am a mortgage payment for a 3 bedroom (fixer upper)house on a reasonable lot would be lower than what I'm paying for a 2 bedroom apartment. However, in my apartment when water starts pouring into my bedroom from upstairs I call the landlord and it's his headache. I never have to decide what color to paint the walls because I'm not allowed to paint the walls. I don't have to decide where to hang a picture because I'm not allowed to make a hole in the wall. Hey the oven doesn't work. Call the landlord. New oven rolls in 2 days later without me having to choose it or pick it up or pay for it.

Of course I understand the argument that I'm not getting anything tangible for my money. I"m thinking though that when I'm ready I'll go into a co-op/condo. Let someone else prune the trees.

[CrazyCatLady]

Well, for us it wasn't a matter of money (over three years it comes out to about the same), but the lack of affordable, nice rental housing where we could have both cats and a 45 pound dog. Doing the repairs (most are terribly simple, a step or two up from changing a lightbulb) and keeping up the yard is a pain in the shorts, especially when it never stops raining.

However, we can make any modifications we choose to our house, because it's ours. If we want to paint the walls black with pink and purple stripes, then by God, we can. If we want to drill holes in the wall to hang our new quilt rack securely, we can do that without getting permission. We can rip out the brck walls around our patio and replace them with something we like better. If we adopt another dog, we don't have to pay more for the privelege of still living here.

It's a trade-off, no matter what you do. The autonomy to do whatever you want with a place, or the convenience of having someone else do it for you, which is better? It all depends on your life and your priorities.

[X~Slayer(ALE)]

Lessee ...hmmmm

I own a 3 bedroom house. Mtg payment is about 2000 bucks a month (includes mtg interest, insurance and property taxes). To rent same size house is about 1200 bucks in our neighborhood. Good enuf schools for my kids, nice neighborhood, very low crime, nice people.

At the end of the year, I get back about 2500 to 3000 bucks back from the IRS that i would never get if I rented.

At the end of 15 years, I own the house free and clear to which I can borrow against it to buy more stuff or a second home. Had I rented, I would have didley squat after any length of time.

Yeah I pay extra for maintenance, repairs and add-ons but anything I do to improve or maintain the house adds to the value of the house which translates into more bucks for me in the long run.

Applying for credit? Theyll ask you do you live in (and own) a house. A "yes" gets you a smile and an approval. A "no" gets you a smirk and a "hmmmm...."

Big finish. I originally bought the house for 200,000. Just by living in it, its now worth 240,000. Try getting that kind of value in an apartment.

[Beadalin]

If I'm going to throw $1800 a month at something, it better damn well be something that I own. Especially considering what assholes landlords usually are, not to mention unresponsive and irresponsible, in my experience. Yes, $1800 is a larger monthly payment than our rent used to be, but we have triple the space, I LOVE having a yard, we can have dogs, and can remodel and paint to our hearts' content.

Moreover, as others have pointed out, houses accrue value while your payment remains flat. Rent just goes up. The previous owners of our house made more than $100K on it in 5 years. While we may not do that well, we're certainly going to do better than being down by $14,400 at the end of the year.

[handy]

Real Estate for investment? In order to buy a house, someone must sell it to you. So you think the price is going to rise, so you buy, yet the person who is selling thinks the price may drop, so they are selling...

Some people like to own though cause you can do what you want with the place. At our local college, teachers can buy condos that the college owns. One person bought four of them for $420,000 as a set. Then tore out walls between each one in the middle & presto, an 8 bedrooms & 8 bath house.

[tanookie]

My principle, interest, taxes and insurance is 1425 a month.

There is no way I would be able to have an apartment with enough room for two kids 4 cats a dog (76 pounds) and hubby and I for that price. Heck there isn't an apartment listed in the paper ever that allows pets. When we rented we needed special dispensation for one flipping cat!

I have my own yard and can do anything I want to the house. Yeah I have to fix stuff when it breaks but that's life. I know it is fixed right and to the way I want it ... not just what was cheap and convenient for my landlord.

Our first house was a two family and I rented out an apartment and was the landlord. We sold that house and bought this one in the area we wanted but couldn't afford when we first looked at houses ... after 4 years the value of that house went up 80,000!

I'm hoping this house will be paid off in time to get the equity loan to put the kids through college :)

[Tamex]

Have you considered buying a townhouse? They tend to be less expensive (except around here, since they also tend to be brand new--though much cheaper than a brand new house), and for many of them, you pay an association fee and the association takes care of all the pesky outdoor maintainance. You also have to follow their rules about when your cars can be outside, paint colors, etc. etc, but you do that for an apartment, too. Plus, you still get all the financial benefits of ownership!

Frankly, I don't mind fixing my own stuff. I like the freedom of either putting up with a problem if it's no big deal or rushing to get it fixed right away if it is. I hated not knowing when or if maintainance would ever show up. We lived in our apartment four years, and the outsides of the windows were never washed once! :eek: Some people think that's no big deal, but I do, and now I am free to wash my windows whenever I want to let the spring sunlight in! I could even hire someone, if I didn't want to do it. I can plant flowers. I can paint rooms when I feel like it. Or, not. The guy who lived here before us didn't do much at all, especially outdoors. You can do the bare minimum if you want, or you can go nuts. (No one says you have to paint or hang pictures if you don't want to, gwendee.)

As far as the neighborhood goes, remember that your first house is not supposed to be your dream house. But, I guess that if you have to live in a certain neighborhood, and you can only afford to rent there, that would be an argument for renting. But, that money is just making your landlord rich, whereas the money you put into your house is still your money, for the most part. Also, rent increases while mortgage payment doesn't.

This would be a good time to rent, though, around here. Whe we were renting, the vacancy rate was <1%, so landlords treated you like crap. If you left, they could always find someone else and jack up the rent to boot. So, of course we moved as soon as we could possibly afford it! Looks like a lot of people had the same thought we did, too--since the interest rates went down, vacancy rates have skyrocketed, and now landlords are offering move-in specials and all kinds of incentives. So, your landlord really wants you to stay, and might be making rental less of a PITA. Remember, though, once vacancy rates go down again, you're back to being chopped liver.

[X~Slayer(ALE)]

Originally posted by handy
Real Estate for investment? In order to buy a house, someone must sell it to you. So you think the price is going to rise, so you buy, yet the person who is selling thinks the price may drop, so they are selling...

These are houses not stocks. The person usually sells not because he thinks the prices will drop. They usually sell because theyre trying to move into an even bigger house. They use the equity of their old dinky house to buy a brand new spacious home. Try that with apartment rents. woops you cant.

Real estate is one of the best form of investment. As Lex Luthor in that superman movie said, "Industry may come and go, stocks may rise or fall, people are no damn good but theres always one thing that they will buy and that is land." If you dont believe that real estate is a great investment, ask the landlord who collects your money every month while he still OWNS the building.

[Smashed Ice Cream]

I bought my first house at age 21. (Yes, it was a cheap house.) I sold it, made a profit, bought a loft, sold it, made more profit, then bought another house last year. (I'm 30 now.)

I've rented several apartments in between as well. There's definitely advantages to either situation, but owning just works better in a lot of ways. I've made a decent amount of money through buying and selling, especially in the city where I am, my home's value has risen about 40,000 in just over a year. I own a good sized lot, and property is something they're not going to figure out how to make more of, so it's rarely something you can lose money on. I get nice tax refunds. My current mortgage is $200 less than my rent was, for equal "niceness".

Regardless of the fact that I have scars from smacking myself with a hammer while making repairs, that 2am seems to be the toilet's favorite time to start leaking, and my grass grows much faster than I feel like mowing, I don't want to trade it back in for renting and the more carefree living that goes along with it. Looking at the gardens I planted, walls I painted the color *I* wanted them to be painted, and knowing that in the long run I'm only paying myself the mortgage makes it much more worthwhile.

[SmackFu]

I understand the appeal of a house. Your own space, a yard, neighbors are more than a wall away, etc. But why get a condo, which may be no better than an apartment? Or it may even be worse, and it's a lot harder to move in that case. Plus unpredictable condo association fees.

I just don't get it.

[tanookie]

The thing I always fear with condos is the association! We had a bunch of condos in the town I grew up in where the association had to approve everything you did in your own home including what colors you could paint the walls inside! Forget doing any renovations like kitchen remodeling. They even had to approve of whomever you sold the place to before you could escape their little dictatorship. All curtains had to show white to the outside world. If you were blessed with a little patch of grass you needed approval to plant any flowers there.

[doreen]

Why do I own a house? Lots of reasons. I don't plan to move. I don't have to share living space with the people in the next apartment, or those upstairs. I have a backyard. I can decorate however I want to. Those reasons could also be true if I rented a house. But - if I rented a house I wouldn't build up any equity or benefit from a rise in real estate prices. I wouldn't ever reach a day when it's paid off- when my mortgage is paid off, I will only have to pay the real estate tax and insurance, which is currently less than $3000 per year. And I even pay less right now than I would to rent a similar apartment- I live in NYC, and even in Queens, a three bedroom apartment in a decent neighborhood goes for about $1500/month. My house, including taxes, insurance and maintenance is under $1000/month. When I bought the house 15 years ago, renting an apartment would have been less expensive than paying the mortgage,taxes and insurance. But as real estate values have gone up, so have rents. My mortgage hasn't gone up, the taxes have gone up about $600/year and the insurance has not gone up.

[jjimm]

The money goes into your pocket.

Houses usually appreciate in value.

Mortgages eventually finish.

[missbunny]

Originally posted by SmackFu
I understand the appeal of a house. Your own space, a yard, neighbors are more than a wall away, etc. But why get a condo, which may be no better than an apartment? Or it may even be worse, and it's a lot harder to move in that case. Plus unpredictable condo association fees.

I just don't get it.

There are condos that do have yards and are not butted up right next to someone - my own, for instance. And the fees are written into the condo association documents and can't be arbitrarily raised. The owners vote on any improvements that might necessitate a special assessment; and the SA might not ever be necessary if the association has a healthy reserve. But yes, some condos are the same or worse than an apartment, at least with respect to living in close quarters with your neighbors.

But anyway, the main reason people buy condos is because they are generally cheaper than single-family houses. In my area, a 2-BR starter home (and I do mean starter - think your extremely basic 2BR, 1 bath ranch, tiny yard) house is about $400,000.

[handy]

" Real estate is one of the best form of investment."

Naw, it's not very liquid. Plus in my area, prices fell about 35-40% from 2000 to 2003. Even in Carmel, California, in one year, prices fell nearly 50%. BTW, before you mention those are just average prices, some of these houses are the exact same house bought & resold...

(I worked for a local real estate company for 6 years :-)

California Pines, on the other hand, is a very interesting real estate investment project. You can buy almost an acre for $10,000 & with a house about $50,000 (?) more (Prices might be up a bit). You can see Erik Estrada talking about it on infomercials.

[Lute Skywatcher]

Owning = no landlord to kick you out on a whim. :wally

[Dogface]

Renting: Every year the rent goes up. After 15 or 30 years, you still pay rent--rent that has gone up every year.

Buying: Every year the mortgage payment is constant (although insurance and taxes can go up). After 15 or 30 years, the mortgage payment disappears.

[Barbarian]

I currently live in an area where I would NEVER buy a house or a condo. For one, the prices are insanely high for anything within a half-hour commute to the downtown core. Especially when you consider that damn near everything built in the past two decades leaks!

Unfortunately, I'm entirely serious. Just about every high-rise, condo, or low-rise built in the past twenty years in Vancouver leaks, and there is no accountability. This is because Vancouver has a unique thing going on called pre-sales; people buy homes on spec, before they're even built, and the numbered company that builds the place dissolves after the warranties expire (so if a problem comes up in 6 years, there's no one to sue).

Now some people have been saying that houses always accrue in value, which is patently false because they're ignoring the math.

When you buy a house you have to take into account your mortgage interest rate. How many people were paying through the nose during the 80s and 90s? If you bought in a 'high' period, you'll almost certainly lose money if you move during a buyer's market.

House repairs? Maintenance? That new roof? Taxes?

There are a lot of hidden costs in a house that many people refuse to accept as part and parcel of the deal.

[Seldon]

I rent right now, but I look forward to the day I can own my own home, for all the reasons listed above.

The reason I haven't gone ahead with it now are important, though. I'm still a student, and live paycheck to paychck. Until I can have a few grand tucked away in a rainy day fund (not to mention a good-sized down payment), I won't buy.

I'm also waiting until the kids are old enough to mow the lawn :)

[Reckless Humor]

First off, I agree with all of the previous posts singing the praises of home ownership. There are disadvantages, but frankly once you own your property, doing repairs and yard work becomes a matter of pride more than inconvenience.

Having said that, I must warn ANYONE away from purchasing a condo, especially one that was built in the last 10-15 years. They are built like apartments (read: cheaply) and sold like homes. On average, condos do not accrue value like single-family homes do, and although your association dues may be set by contract, special assessments are not. I used to be a construction lawyer, so from experience I can tell you that the way those things are built, you are almost guaranteed to have a special assessment related to major repairs to the common areas. The size of those assessments may not be the problem, the unpredictability of them is. They always come up when you can't afford them, and you never know when it will happen.

In short ... buy property, but make sure it's a house.

Another thing to consider is that the best way to accumulate real wealth is by owning property, and lots of it. If you own a house in the right range (3 bedroom, 2 bath, relatively middle class), don't sell it. Rent it to someone and keep leapfrogging from house to house. Within ten years, you could have five rental properties and a nice supplemental income that is (relatively) tax free.

[X~Slayer(ALE)]

just to add to Reckless Humor's sage advice, the only thing worse than owning a condo is owning a timeshare.

If you must live in apartment like conditions, buy a duplex or buy an apartment building. Live rent-free in one unit, have the other units pay for most, if not all, of your mortgage payments.

[Lute Skywatcher]

Originally posted by Reckless Humor
Having said that, I must warn ANYONE away from purchasing a condo, especially one that was built in the last 10-15 years. They are built like apartments (read: cheaply) and sold like homes. On average, condos do not accrue value like single-family homes do, and although your association dues may be set by contract, special assessments are not. I used to be a construction lawyer, so from experience I can tell you that the way those things are built, you are almost guaranteed to have a special assessment related to major repairs to the common areas. The size of those assessments may not be the problem, the unpredictability of them is. They always come up when you can't afford them, and you never know when it will happen.Depends on the complex and the location. The condo complex we live in was built in 1965 as apartments, then converted in the '80s. The going rate for our 2BR 1½BA has nearly doubled since I secured a mortgage three years ago.

[Lute Skywatcher]

BTW: houses around here start in the low $200s and chances are anything in that range is at least fifty years old.

[Doomtrain]

I'd love to just buy an apartment building. How does someone with no money go about doing so?

[handy]

In my area you can get a 1 bedroom for about $750-900. Now, if you bought a one bedroom, your payment would be around $1,800 -$2,400 a month.

Some people buy a two bedroom for $800,000, spend maybe $75,000 to remodel it (which with the permit process here can take three years & no water available for expansion) & get a 2 bedroom house for $875,000. For that much, the monthly payment would be around $6,500......

They are supposed to put in affordable homes too. But the latest project they are creating in Seaside has homes starting at $505,000 each.

[tanookie]

Good lord! Remind me never to move where handy lives!

[X~Slayer(ALE)]

Originally posted by GMRyujin
I'd love to just buy an apartment building. How does someone with no money go about doing so?

leverage and good credit. defer the first payment of the loan until you collect the rents. You borrow a second mtg based on the apartment building to pay for any negative difference between the 2 mortgages and the rent collected, tax benefits pay for most if not all of the negatives at the end of the year. Raise the rent the next year to match what you pay in mortgages and maintenance. Survive that for a few years and you'll be a succesfull landlord and you can repeat as many times as you like.

[lorinada]

I looked into buying about six months ago when my building was sold to a new owner who wanted a no-pets building. I currently live in a 2-2. The BEST I was going to be able to do was double my monthly payments to go into a 1-1. And that didn't even include the fact that repairs would now come out of my pocket. And that would be for a large condo complex - another step down in my opion for all the reasons already mentioned above. At least right now I live in a fourplex.

Thankfully, since I was a long-term tenant prior to the new owner, with no late rent or problems reported by the selling owner, they grandfathered my cats and I'm still here.

[Phouchg]

First off, my credit sucks big red monkey ass - there is no way I would even be able to qualify my dollar in the vending machine at work, let alone buy real estate.

Down the road when my credit is better, I still don't see the advantage to buying a house. I am 35 years old and I live in a great apartment with all appliances in a new, safe, secure, well-landscaped complex with a payment well within my budget. I enjoy living here, and not having to worry about maintenance, lawn care etc is a big plus.

*shrug* to each his own. For me, it just doesn't make sense.

[Early Out]

Originally posted by Phouchg
*shrug* to each his own. For me, it just doesn't make sense.
If you're paying income taxes in the U.S., I'd like to thank you, heartily, for subsidizing my housing costs! (The U.S. tax system heavily favors people who are making mortgage payments.)

[StGermain]

I bought my house 10 years ago. My house cost $57K It's small, only 1000sq ft, but it has three bedrooms and I'm single - I don't need much room. My yard is just under an acre. My house payment is less than $400. A two bedroom apartment in this area is between $6-800. Homes the size of mine in my neighborhood are now selling for $90K.

Add to the financial benefits that I also own three large dogs and two cats (and a horse, but I board him at a stable). I would never be able to afford the lifestyle I have as a single person without home ownership. I don't mind the yardwork. I like most of my neighbors - we're generally a neighborly bunch. Last year when my neighbor was laid up with back surgery, I mowed his yard for half the year. My other neighbors trimmed my trees for me and helped me when my mower needed repairs. Owning my home gives me lots of different kinds of pleasure.

StG

[TVGuy]

NO!!, The "bad credit" thing with a house is mostly MYTH.

At least I found out it was in my case.

Lemme tell you my little story - the Reader's Digest version, anyway.

I rented for years and years and years. I loved it, honestly, for a long time. It was great to have no ties, no real responsibilities, etc with regard to repairs, maintenance and so on. I just wrote a check once a month and all was right with the world. Somebody else took care of pretty much everything.

I also had AWFUL credit. In fact, I've spent the last ten years working my way out of a series of very bad situations that befell my credit due to job loss, etc. in the mid eighties. I figured that owning a home wasn't going to be even THINKABLE with the credit I had - after all, I couldn't get a car loan, I couldn't even get a credit card that wasn't secured by $2500 in the bank!

So, when I went shopping for a mortgage, I did it almost more on a "curiosity whim" than anything. I knew I there was no way any bank or mortgage company would have me.

Boy, was I wrong. What I discovered was that lenders understand that most people will pretty much allow themselves to STARVE rather than risk the roof over their heads. People can do without a car, they can get by with cash when they have no credit cards, and so forth. But most people, once in a home, will do pretty much anything they have to do to make sure that mortgage gets paid on time. The lenders know this.

My mortgage was the EASIEST credit I ever got! To drive the point home, after I bought my house, my credit was still in recovery, and even though I was a homeowner, I still had a hugely hard time getting a credit card, car loan, etc. for a couple of years.

I will NEVER go back to renting ever again. I have a nice house that I own and can do with anything I wish. I've never had so much fun painting walls and hanging pictures. I've discovered that I actually like yard work (although I do hire someone to come cut the grass and do similar chores.) Jeez, I BUILT A GARAGE!! Most of all, I'm not beholden to some slimey landlord or management company that keeps upping the rent every year. My mortgage payment is the same today (excepting the property taxes) as it was five years ago and it'll actaully be LOWER before the end of the summer as I complete refinancing at a lower interest rate.

Here's the way I look at it in the end. By renting, I was paying my landlord for the privelage of living under his roof. The rent would go up every year, the rent would have never ended and I had no equity in the property - an imporant thing when you want to have a little extra cash to travel to England on short notice, for instance. I had no tax relief, etc. etc. etc.

By owning, I live by my rules, I have a stable housing cost that, over time, actually becomes a much SMALLER percentange of my monthly expenses and I get a nice little write-off every April 15th on tax day - for BOTH the mortgage interest AND the property taxes! Eventually, there will be no more mortgage and my annual expenses for a house will be property taxes and maintenance only.

I was a staunch "rent-til-you-die" dude before. Now I no longer see any value in renting at all, unless, like others have said, you move frequently. If that's the case, then you really are better off renting - but that's about the only case that I can see where it makes much sense.

[handy]

"I bought my house 10 years ago. My house cost $57K It's small, only 1000sq ft, but it has three bedrooms and I'm single"

I think these days you can get a 4 bedroom, 2 bath house in Gary Indiana for $50,000.... but who would want to stay there? It depends on the location.

One local long time real estate agent (No longer a Realtor, just an agent) works for the senior citizen agency here. I can only imagine how many cards he gives out to them to get them to let him buy their homes cheap.

[smaft]

Originally posted by handy
I think these days you can get a 4 bedroom, 2 bath house in Gary Indiana for $50,000...

Man. The house I was living in until recently was a 4br 2ba- 2900sqft w/view, 2-car garage on a double lot. Market value is probably $480K.

Oh, we were renting- $1400 a month, raised all of once in the 9 years I was there.

Best. Deal. Evar. There's no way you could buy anything remotely comparable in Seattle for that, tax advantages or no. It's simply not possible.

[Manda JO]

It definitly depends on the market. Here. I am paying $840/month for a 1000 square foot two bedroom apartment. In two weeks we close on a three bedroom, 1700 square foot home. With 10% down, my house payments are going to be $620/month. Add PMI (ugh), property taxes, and homeowner's insurance (both very high in Texas), and it goes up to about $1000/month. Considering that my rent is going up to $875 in the fall, it just make sense to move. Not to mention that my new house has trees, and roses, and a patio, and wisteria, and trumpet vines and bamboo and honeysuckle and pickly pears that are taller than I.

Can you tell I bought the yard, not the house?

On the other hand, I'm sitting here on a Saturday morning shopping for a new fridge, which are not cheap. On the other hand, I get to decide what kind of fridge I want in my life, which is nice.

[Motorgirl]

Why don't we buy?

1. What we can afford* where we want to live we wouldn't want to own.
2. Where we can afford something we would want to own we don't want to live.
3. We like the convenience of calling someone when something breaks and they come fix it or call the appropriate person to fix it - at no additional cost to us.
4. We've lived in the same apartment for 7 years, and the landlord really likes us, so we're paying well below market value. Rental increases have been few and far between, even though the average annual rental increases for this area have been 20-30%, and even though the landlord had our apartment assessed 3 years ago and found out he could get more than twice what we were paying for it . (the apartment below us rents for $800 more than ours and is significantly smaller). We don't want the additional cost of mortgage payments, even though we could technically afford to pay more than double what we're paying now.

*Our recent research into the mortgage situation indicates that we could easily be approved for a mortgage more than double what we want to borrow, putting us in the range needed to buy something in our neighborhood. The problem is we don't feel comfortable buying in this market, and would rather wait. We're in no hurry.

[Necromancer]

I bought my home 7 years ago and payed it off in 5 years. It was recently valued at 3 times as much as what I payed for it. The main reason I bought it was because I was sick and tired of renting and putting my hard earned money into someone else's pocket. It was appealing to have something of my own which had a decent sized yard for my pets. I also wanted to create a nice garden, somewhere I could relax and chill out whenever I wanted and to make renovations whenever I wanted (or could afford). I intend to buy another house some time this year, closer to where I'm about to start a business, so ultimately, buying this house was a good financial investment for me and I'm glad I did it.

[Elza B]

Originally posted by SmackFu
I understand the appeal of a house. Your own space, a yard, neighbors are more than a wall away, etc. But why get a condo, which may be no better than an apartment? Or it may even be worse, and it's a lot harder to move in that case. Plus unpredictable condo association fees.

I just don't get it.

SO and I are talking about buying a condo just because we don't particularly *want* a yard to upkeep. Neither of us is fond of yard work, but we do want to own at some point in the future to get the equity. When we have kids, we'll probably get a house with a yard, but a condo for the early years of our marriage is looking better and better.

Ava

[handy]

"SO and I are talking about buying a condo just because we don't particularly *want* a yard to upkeep."

Yeah, but if the condo has a yard then you have to pay them to maintain it & the rates I have seen are a lot for yard work.

Also, you own the condo for 100 years, not forever, sometimes, right?

[bordelond]

I have a question -- how the heck do you save up a down payment for a house? And what do you do if you have abysmal credit, or a bankruptcy in your past?

For us, a buying even a cheap house feels about as far away as buying Microsoft. Just HOW do you get there from here?

Some of the folks posting here are talking like buying a house is on par with buying a pair of pants.

[Elza B]

Originally posted by handy
"SO and I are talking about buying a condo just because we don't particularly *want* a yard to upkeep."

Yeah, but if the condo has a yard then you have to pay them to maintain it & the rates I have seen are a lot for yard work.

Also, you own the condo for 100 years, not forever, sometimes, right?

We planned on buying a condo that's more like an apartment, so there'd be no yard to deal with. And that's the one thing that worries me - the resale option on a condo. We might be better off getting a townhouse with only a miniscule yard - I think the resale options are better on thise.

Ava

[tanookie]

Well bordelond...

When my husband and I got married we took all the money we got for the wedding and started a house account. (It was about 1500)

We drove older cars with no car payments and spent the first year of our living together paying off all our credit cards. We discovered then that all of my paycheck could then go into savings. So we lived that way on one check for a year.

When we went for our mortgage we got some first time homebuying assistance. They offer everything from no downpayment to rolling closing costs into the loan.

Our first house was a two family so the rent helped with the mortgage. We sold that (ugh capital gains taxes - yeah I know but I didn't want to be an absentee landlord 2 hours away when the pipes burst at 2am!!!) and were able to buy a house in the area we wanted to live originally but couldn't afford in the beginning.

[sezyou]

If renting was smarter than buying, there would be no landlords.

Property is the best investment available to the average person today.

Mortgage payment on house - $900.00
Replace broken refrigerater- $900.00
Dishwasher replacement- $600.00

Coming in from a night of drinking, putting "Physical Graffiti" on the cd player and cranking it till the roof shakes and sing along with it till you feel like your lungs will explode- Priceless.

[tanookie]

That must be one hell of a dishwasher for 600 bucks! Does it put the dishes away for you? :)

[jessicala]

Originally posted by Interrobang!?
I've lived in an apartment for the last ten years. My wife and I have been working on cleaning up our finances, and we're thinking about buying a home. (Unfortunately, since we want to stay in the city of Seattle, it's not going to be cheap.)
[...]
But I don't really look forward to bigger monthly housing payments (and right now, there's no way a house would be cheaper per month than our apartment).
First, how are you defining "city of Seattle"? Queen Anne? Greenlake? Bellevue? Some friends of ours bought a house near Greenlake about a year ago, for around $200K. I don't think they are paying more per month than they would have done renting. (Granted, their house is about the size of a large apartment too, but if you've been in an apt for 10 years it would probably fit the stuff you have.) Finances don't really need to be an issue preventing you from buying.

However ...
Originally posted by Interrobang!?
Or maintaining the house. Or the yard.
... if you really would rather not deal with house and yard upkeep, then owning a house is probably not for you. Sure, there's all the fun that goes into home improvement, like adding the new deck that you really want, and being able to do whatever you like with the rooms and yard. But you will also have to deal with the maintenance, like repairing/replacing the dishwasher when it starts leaking, judging whether the leaky roof can last one more winter, building the fence to keep the neighbor dog from pooping on your lawn.

Have you considered renting a house for a year? It would give you an idea of what kind of maintenance you would be getting yourself in for (even if you are ultimately asking your landlord to come take care of it.) You could probably sublet your current place while you were in the house if you didn't want to risk giving it up.

[sezyou]

Originally posted by tanookie
That must be one hell of a dishwasher for 600 bucks! Does it put the dishes away for you? :)

No, I have wife to do that. ;)

[The Flying Dutchman]

We nearly lost our house last year, but managed to recover financially. I was freaked, because in my mind if all I accomplish for my retirement is home ownership I will be minimally satisfied. There are two kinds of working stiff pensioners, those that own their own home and those that don't and they both get the same old age security cheques each month.

Also, if you have kids.........

[CanvasShoes]

Well, for one thing, I don't know about other areas, but up here you can get more "bang for your buck". A bigger place and smaller payments than rent would be for an equivalent living space.

And the aforementioned tax breaks, you get to do what you want, you don't have to worry about paying security deposits and pet deposits etc etc.

To Tanookie don't laugh, my bf paid almost 900 (course that could be because things always cost more in AK) for his. You can put in dishes with the gunkiest dried on stuff and it gets everything. Never have to wash dishes before you wash dishes.

[Kiger]

I lived in an apartment up until last year. For $820 I got a tiny one bedroom apartment with 10 year old fraying carpet, incorrectly installed linoleum, lovely grey paint, a rusty stove, a dryer that only took 3 cycles to dry one dish towel, and a deck I couldn't sit on due to a coating of grime coming from the highway.
Added benefits:
2 Beagles braying on the deck below me from 6am until jackass got home at night. Saturday and Sunday included. I used to dump cherry Kool-Aid on them to get them to shut up - too busy licking sugar off themselves to bark, plus added benefit of jackass coming home to sticky dogs. He got evicted eventually and we all had a party.
Neighbor beside me with klaxon like alarm clock that he would forget to turn off on the weekends - he was almost always away on weekends. :mad:
People who don't understand that bass carries through paper thin walls - especially late at night on a workday.
Oh, and the break-ins. Every year like clockwork, there would be a rash of car break-ins. One year they stole the wheels off our new Jeep and left it sitting on 2 cinderblocks - so concientious. :rolleyes: We got it alarmed the next day and they left it alone the next 4 years - with the same style of wheels they couldn't resist the first time.
And this was a decent neighborhood. Every once in awhile all the bad neighbors would move out and there would be peace and quiet - but not often.
You couldn't pry me away from my house. No way.

[Interrobang!?]

First, how are you defining "city of Seattle"? Queen Anne? Greenlake? Bellevue? Some friends of ours bought a house near Greenlake about a year ago, for around $200K. I don't think they are paying more per month than they would have done renting. I'm being pretty literal with the definition -- I'm not super picky about the neighborhood, but I don't really want to go to the suburbs, either. Queen Anne would be a pipe dream -- I think their dollhouses go for $100k or so.

Right now, we pay $720/month for a 975-square-foot 1br apartment in Wallingford. I haven't yet figured out what house we could get that would be less expensive per month. I'm sure it's not impossible -- I haven't put a lot of effort into massive househunting -- but it's not going to be easy, either.

After reading the thread, though. I'm starting to wonder if I should go buy some cheap house in Renton or somewhere (closer to where I work, for now) and plan on selling it in 5 years. On the other hand, we really need to chop down some major credit card debt, so I don't forsee moving into any more expensive option (bigger apartment or house) until that's taken out of the way. We're working on it, but it'll probably be another year or so.
... if you really would rather not deal with house and yard upkeep, then owning a house is probably not for you. See, I really, really hate yardwork. I did it when I was a kid, and I grew to like it less and less as I got older. And home improvement doesn't appeal to me much more than that, frankly. I would definitely pay people to add a deck, rather than build the deck myself, for example. Not because I couldn't figure out how to do it, but because I'm just not interested.

Working on the interior -- that would be more fun. I wouldn't mind painting. But god, I hate mowing lawns . . .

[Doomtrain]

I, too, despise mowing lawns. Every time I think about looking at getting a house, my brain says "You'll have to get a lawnmower and we all know what THAT means!" That's why I put him in charge, he's the smart one.

[Lute Skywatcher]

Originally posted by Kiger
People who don't understand that bass carries through paper thin walls... Or ceilings for that matter. I've had downstairs neighbors who were evidently unable to comprehend that their loud bass made my floor vibrate.

[Barbarian]

I've been fortunate, in that my neighbours have always been fairly good-- and the landlords are willing to kick out bad neighbours.

I've also had landlords who do major repairs on the day of the complaint (like when I mentioned that I had some water under my sink-- turned out the previous plumber had screwed up attaching the water main coming to my faucet, and the thing was in danger of blowing-- and flooding the 9 floors below me).

Not to mention the down payment. In my neck of the woods, I'd need at least a $20, 000 down payment to buy a condo on the 4th floor of a highrise-- and the damn thing wouldn't even exist anywhere except in the architect's head for 18 months-- so I'm paying rent and a mortgage at the same time until I can move into a place that's almost guaranteed to leak after 5 years.

A detached house? Starting prices are now around $500,000 for a 40-year-old bungalow half an hour outside the downtown core. I'd go for a rowhouse, but they don't exist...

[Lute Skywatcher]

Some banks give first-time buyers a break with the downpayment. As a first-time buyer, Bank of America granted me an $82,000 mortgage with $5000 down. They also allowed a third party to pay the bulk of the five grand; I paid $500 out of my pocket and the rest was graciously donated by one of my sisters.

Check with your local governement as well. I missed out on an opportunity to negate my closing costs and possibly a further downpayment reduction because I was not aware of a special program for first-time buyers in Arlington County.