# Costs necessary to compare home ownership costs with rental costs **URL:** \ **Category:** In My Humble Opinion\ **Created:** [December 8, 2014, 7:08pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681 "2014-12-08T19:08:38Z")\ **Posts on this page:** 17\ **Page:** 2
**Author:** ![Frylock](https://avatars.discourse-cdn.com/v4/letter/f/ce7236/32.png) [@Frylock](https://boards.straightdope.com/u/Frylock)\ **Post date:** [December 8, 2014, 9:04pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/21 "2014-12-08T21:04:14Z")
> [@Renee](#): > > If the house has knob and tube, it’s got other old systems that are going to give you trouble. This particular house needs major upgrades, and it doesn’t sound like you’re prepared to get in there and do them yourself. This is not the house for you, I think. Don’t be swayed by the old house charm if you don’t have many notches in your tool belt. They’re a TON of work, and you never know what you’re going to find when you open those walls up to upgrade the plumbing and wiring. Also, you don’t want to be living in the house while the systems are being upgraded. Get a newer house.\* > > \*I say this as someone with many, many notches in my tool belt. I’ve done the knob and tube upgrade. This is not a minor job. It turns out the K&T is mostly gone, per the report we were just reading. I’m not sure of the details on this but it may not be as dire as we thought. But yes, I’m starting to think it won’t be worth it overall. Not sure yet. ---
**Author:** ![FairyChatMom](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/fairychatmom/32/21906_2.png) [@FairyChatMom](https://boards.straightdope.com/u/FairyChatMom)\ **Post date:** [December 8, 2014, 9:04pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/22 "2014-12-08T21:04:32Z")
Something else to consider, tho it may require a crystal ball - how long do you expect to live there? Two times in a row, we bought, thinking we’d be staying put, but both time we were transferred, once in 3 years, once in 4. The first place, we had to actually pay to sell the house. The second one, we pocketed just a little bit of equity. Unless you’re reasonably confident that you’ll be staying put for at least 6 or 7 years, it might not be worth it to buy. Also, if you’re not handy enough to deal with at least some repairs, having to rely on pros can be expensive and potentially problematic if you just pick a name out of the yellow pages. Finding someone you can trust can be a challenge. And doing it yourself if you’re not competent can be a disaster. Personally, I’d never live in a place with knob and tube. Rewiring a house is $$$, and when it comes time to sell, you’ve eliminated a bunch of potential buyers. Definitely something to think about. Good luck!! ---
**Author:** ![Frylock](https://avatars.discourse-cdn.com/v4/letter/f/ce7236/32.png) [@Frylock](https://boards.straightdope.com/u/Frylock)\ **Post date:** [December 8, 2014, 9:05pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/23 "2014-12-08T21:05:40Z")
What are some other old systems we should be worried about? The only one that comes to my mind off the top is heating, and as to that there was a new heating system installed in 2007. (It’s an attic-based Unico system, which the person we’re dealing with said is another factor that seems to have made people hesitate about buying. Any idea why?) ---
**Author:** ![qubed](https://avatars.discourse-cdn.com/v4/letter/q/f07891/32.png) [@qubed](https://boards.straightdope.com/u/qubed)\ **Post date:** [December 8, 2014, 9:06pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/24 "2014-12-08T21:06:36Z")
> [@Frylock](#): > > Can you explain this a little more? How did the five years figure into the calculation? (What’s the calculation, exactly?) That was just an example, it really depends on the buyer. Many people buy houses with the assumption they’ll move out in a few years, others buy it with the intention of dying in it. If you’re the former, than that 5-6% realtor fee is actually quite significant. 5% of $129,000 is $6450. If you plan on moving out after 1 year, that’s $540/month 2 years -\> $270/month 5 years -\> $107/month 10 years -\>$54/month 15 years -\> $36/month and so on. ---
**Author:** ![Frylock](https://avatars.discourse-cdn.com/v4/letter/f/ce7236/32.png) [@Frylock](https://boards.straightdope.com/u/Frylock)\ **Post date:** [December 8, 2014, 9:08pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/25 "2014-12-08T21:08:48Z")
> [@qubed](#): > > That was just an example, it really depends on the buyer. Many people buy houses with the assumption they’ll move out in a few years, others buy it with the intention of dying in it. If you’re the former, than that 5-6% realtor fee is actually quite significant. > > 5% of $129,000 is $6450. > > If you plan on moving out after 1 year, that’s $540/month > 2 years -\> $270/month > 5 years -\> $107/month > 10 years -\>$54/month > 15 years -\> $36/month > and so on. Okay now I see what you meant. ---
**Author:** ![Renee](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/renee/32/287_2.png) [@Renee](https://boards.straightdope.com/u/Renee)\ **Post date:** [December 8, 2014, 9:46pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/26 "2014-12-08T21:46:33Z")
What’s the plumbing situation? Original pipes, or upgraded? If they’re upgraded, what material did they use? How much power do you have coming into the house (what’s the amperage on the main breaker in the electrical panel?) Condition of the roof? Does it need paint? If it needs paint, does it have the original siding? If so, it’s got lead based paint and it will be more expensive to paint. Any dry rot? Are the windows original? (Old windows can increase your heating bills a lot.) Is it insulated? When we renovated a 1920’s house, there was no insulation. Zero. The foundation. Basement, or what? How’s that look? Those are the big things. Water heaters, appliances, all that can be replaced pretty easily and you can learn some DIY skills while you’re at it. Personally, I love this shit. But it does run into money, and old houses are just going to have bigger fix-up costs than new ones. Sometimes it’s worth it, but mostly only if you really enjoy doing the work. If you hate every second of it, the old house charm isn’t going to make up all the work you’ll be putting in. ---
**Author:** ![usedtobe](https://avatars.discourse-cdn.com/v4/letter/u/ec9cab/32.png) [@usedtobe](https://boards.straightdope.com/u/usedtobe)\ **Post date:** [December 8, 2014, 10:48pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/27 "2014-12-08T22:48:02Z")
When I bought my first house, the seller threw in a “Home Warranty” - presumably a cheap one. I tried getting something fixed - I called a contractor and told him about the insurance. “We don’t accept that anymore - we haven’t been paid for the last 7 jobs”. One of your first calls is likely to be a plumber - just call a couple and ask if they accept Home Warranty policies - which ones are they eager to do, which will they not touch. If it is not part of the routine for house sales there, find a competent residential building inspector and pay him for his time. This may or may not be part of a “structural pest” (termite) report, which should also be in the package. ---
**Author:** ![Misnomer](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/misnomer/32/14897_2.png) [@Misnomer](https://boards.straightdope.com/u/Misnomer)\ **Post date:** [December 10, 2014, 8:58pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/28 "2014-12-10T20:58:26Z")
> [@Frylock](#): > > I tried looking at my power company’s website, and elsewhere around the internet, to try to figure out how electric bill costs could be expected to compare as well, but for one thing, didn’t find any info, and for another thing, I imagine this can vary widely from house to house anyway. This could be too late for your current situation, but you might be able to call the power company and ask what the average bill is at that address. I’ve done that here in Northern Virginia, a couple of times. They won’t tell you how much the bill was for a particular month or a specific timeframe, but they’ll give you an average for the past quarter/6 months/year (something like that). It won’t reflect your highs and lows, but should help you budget. ---
**Author:** ![Renee](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/renee/32/287_2.png) [@Renee](https://boards.straightdope.com/u/Renee)\ **Post date:** [December 10, 2014, 9:43pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/29 "2014-12-10T21:43:10Z")
> [@usedtobe](#): > > One of your first calls is likely to be a plumber - just call a couple and ask if they accept Home Warranty policies - which ones are they eager to do, which will they not touch. My neighbor is a plumber. He was called for home warranty work a few months ago; water was appearing on the carpet so the homeowners thought there was a leak in pipes imbeaded in the floor (slab foundation). My neighbor had installed the plumbing in the house, and knew there were no pipes in the area. Turns out their dog was peeing on the carpet. 😃 ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [December 10, 2014, 11:10pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/30 "2014-12-10T23:10:06Z")
A rule of thumb on new construction is that you’ll spend the equivalent of one monthly payment (PITI) in unplanned maintenance every year. For a middle aged house, e.g. 30-40 years old, make it 2 monthly payments. For something from 75 years ago, probably 3. That’s not considering things like it needing a new roof in 2 years or whole-house painting. That’s just fixing toilets, water heaters, stoves, broken windows, etc. All the fun stuff that sends you to the DIY store most weekends. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [December 10, 2014, 11:15pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/31 "2014-12-10T23:15:08Z")
Also, don’t assume that your property taxes will be the same as the current owner’s property taxes have been. In some jurisdictions that’s true. But in many jurisdictions, and more all the time, property taxes are capped until the property sells. And when it sells, the taxes jump a bunch. I just bought a place here in FL and my property taxes are double what the previous owner’s were. The difference is NOT that they bumped the valuation assessment, it was entirely that his taxes were capped to only grow at a low percentage per year. I’ll enjoy the same benefit in future years, but starting from a much higher base. Your local taxing authority can tell you roughly what your taxes will be. FYI, the price you actually pay for the place has almost nothing to do with it. ---
**Author:** ![Thudlow\_Boink](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thudlow_boink/32/320_2.png) [@Thudlow\_Boink](https://boards.straightdope.com/u/Thudlow_Boink)\ **Post date:** [December 10, 2014, 11:22pm UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/32 "2014-12-10T23:22:24Z")
I suppose one more sort of expense that could be relevant is that, with home ownership, there is essentially no upper limit to the amount of money you can put into it if you are so inclined. So if you or your wife are the sort of person to regularly say things like, “Let’s redo the kitchen! Let’s pull up all the carpeting and install hardwood floors! Let’s paint the house orange! Let’s add on an extra room!” home ownership could end up being significantly more expensive than renting. Of course, the upside is that you _can_ make changes like this, if you have both the motivation and the financial wherewithal. ---
**Author:** ![Kent\_Clark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kent_clark/32/105_2.png) [@Kent\_Clark](https://boards.straightdope.com/u/Kent_Clark)\ **Post date:** [December 11, 2014, 3:02am UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/33 "2014-12-11T03:02:20Z")
I thought of another one, the sewer. Where I live, the homeowner is responsible for the sewer line from the house to the main line under the street. Those lines start to fail after 50 years or so and replacing the line can run a couple of thousand bucks and leave your yard torn up. My particular town has sewer line insurance, but even so, there’s a deductible and some upfront costs. Of course, if the house has a septic tank, that’s going to require regular maintenance, if not replacement. ---
**Author:** ![elfkin477](https://avatars.discourse-cdn.com/v4/letter/e/a9a28c/32.png) [@elfkin477](https://boards.straightdope.com/u/elfkin477)\ **Post date:** [December 11, 2014, 3:17am UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/34 "2014-12-11T03:17:30Z")
> [@Justin\_Bailey](#): > > An inspection is around $100. Just pay for your own. This has to vary by area. I’m looking for a house too and the most common figure local inspectors give is $400. ---
**Author:** ![ZipperJJ](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/zipperjj/32/211_2.png) [@ZipperJJ](https://boards.straightdope.com/u/ZipperJJ)\ **Post date:** [December 11, 2014, 3:34am UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/35 "2014-12-11T03:34:24Z")
Having your own garage and driveway and not sharing walls with anyone, and being able to make any changes you want at any time… Is priceless 🙂 ---
**Author:** ![Orwell](https://avatars.discourse-cdn.com/v4/letter/o/dfb087/32.png) [@Orwell](https://boards.straightdope.com/u/Orwell)\ **Post date:** [December 11, 2014, 3:34am UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/36 "2014-12-11T03:34:52Z")
> [@elfkin477](#): > > This has to vary by area. I’m looking for a house too and the most common figure local inspectors give is $400. I can’t imagine $100 gets a decent house inspection anywhere. ---
**Author:** ![Urbanredneck](https://avatars.discourse-cdn.com/v4/letter/u/ea5d25/32.png) [@Urbanredneck](https://boards.straightdope.com/u/Urbanredneck)\ **Post date:** [December 11, 2014, 6:09am UTC](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681/37 "2014-12-11T06:09:47Z")
I agree with the above that for a beginning homeowner you shouldnt try to buy an old house unless your getting it dirt cheap and are willing to suddenly take out a line of equity and spend tons of money on remodeling. Now I have know people who did just that and came out on the end with a beautiful home. For other people, you’d be better off tearing the old house down and building a new one. [Previous page](https://boards.straightdope.com/t/costs-necessary-to-compare-home-ownership-costs-with-rental-costs/706681.md?page=1)