Housing: why own when you can rent?

In My Humble Opinion
1

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?

2

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

3

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.

4

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.

5

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.

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.

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.

6

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.

7

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.

8

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.

9

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.

10

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.

11

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.

12

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 :slight_smile:

13

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.

14

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.

15

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.

16

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.

17

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.

18

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.

19

The money goes into your pocket.

Houses usually appreciate in value.

Mortgages eventually finish.

20

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.