Why are you posting here instead of looking at houses? You crazy or something?!
I got in to this with my parents when I mentioned that the future Mrs. Rabbit and I were thinking about going to a showing of an absolutely beautiful, if run-down, place in the neighborhood that’s up on a short sale at a rock-bottom price.
“There’s no better investment! You’re just throwing your money away renting!”
Bull. Inflation-adjusted housing prices have actually been decreasing over the last 30 years. I’d be better off taking what money I’d otherwise be saving for a down payment and maxing out my 401k.
There’s nothing wrong with buying a house if that’s what you want to spend your money on, but treating it like some kind of virtuous purchase because it’s a House is the height of irritating myopia.
Well, then, I’m getting a hell of a deal. I pay $750.00 in rent. And for that I get a great place on a great street in a great neighborhood, with a landlord that mows the grass, shovels the snow, and does repair work within 48 hours. I’ve never in all my years renting had a landlord not do something I’ve asked them to do and in a timely fashion, and I’ve rented in Austin, Chicago, and Omaha. I’m no expert, but my sense is I cannot pay a mortgage and insurance and maintain and repair a house for only $750. Plus none of my time put into it.
Yeah, but if you aren’t happy with the house is being maintained, you can decide not to renew your lease and move. If you want to move across country for a better job, you can move without worrying about selling the house.
Well, your landlord is apparently doing it. And making some money too, I would think. That’s if he hires out the work.
Or, if he’s actually doing the maintenance work personally, he’s making more. And whenever you leave, he’s still got the house.
There’s a reason people do the landlord thing.
Still, I’m not saying any particular choice is right or wrong; it depends on your personal circumstances and what works for you.
People pushing the “you gotta buy a house” mentality conveniently seem to forget all of the costs associated with it. It’s not as simple as “what’s my monthly P&I payment for the next 30 years?”
Let’s not forget:
-Property taxes (didn’t pay these when I rented)
-Home owner’s insurance (way way more than basic renter’s insurance)
-Upkeep (that lawn doesn’t cut itself, the driveway doesn’t shovel itself)
-Maintenance (you’d be surprised how many things need to be replaced during the time you live there. Over the past 10 years; new furnace $4K, new driveway $4K, new windows $2K, garage door $1K, new carpet $2K, appliances $3K. This fall I’m having my house painted for $2K, if I wanted siding it would run $13K. I really need a new roof also and that’s going to be a few thousand.)
As I say, landlords add up all those known and anticipated costs, add a profit margin on top, and charge rent to cover it. They’re not in it to make your life easier, they’re in to make money from you.
Now, if the arrangement does make your life easier, and you’re willing to pay the premium for that, more power to you. There’s nothing wrong with paying a premium for a service you value.
But if you’re living in one place for a long time, owning is the better bottom-line deal.
Well hey,
If you have a job in a good industry and you are not going to be fired or laid off, and you have enough money for a down payment, buying a house it not that bad of a deal. Lord knows, the banks are sitting on scores of foreclosed homes that they will sell for peanuts just to write them off the books.
Beats paying a landlord. However, renting does have its upside. Maybe your job wants you to move. Or you dont quite feel settled where you are and want to know if you are willing to make a commitment of a 20 year mortgage. Maybe you live somewhere like NYC or California where a million dollars buys a studio apartment with a leaky toilet. Funk that. But for those of us who live in the Lala Land of Flyover Country, it’s foolish to pay for some other assholes’ house note.
In my opinion, property is always a decent investment.
Property can be a good investment, but it’s also possible to lose your shirt.
I know more than one person who bought because ownership was apparently too good a deal to pass up. Most of them ended up house-poor because they got suckered into a mortgage and upkeep they could not afford, and one of them lost her house because the financing she got was so “creative” that the loan couldn’t just be modified; it would have had to be completely re-structured in order to refinance it at a more affordable rate. It was easier for her just to walk away.
Okay I won’t try to convince you to buy a house but it really is a good time to buy one if you’re not a moron who gets roped into a creative financing deal as MsRobyn mentions.
It really isn’t that difficult if you have a calculator and a pen and a piece of paper. I don’t have a heck of a lot of sympathy for people who don’t know how to add, subtract, multiply, and divide.
Let’s see: Figure out how much down payment you need >agree to fixed rate and term of mortgage you can afford to pay per month (around 30% of income) >sign papers.
ZOMG!
Hey, if some people feel more comfortable renting that’s cool.
Or if you want to own a house in a few years.
Its clearly a buyers market right now, more so than ever before with the glut of housing on the market today. If you wait a couple of years, prices could easily go up by $100,000 for a basic 3 br home and cost you more than double that in finacing costs over the term of a mortgage.
I am going to retire in a few years. I’m glad that my government retirement pensions are predicated on survival at a minimum. Owning my home will give me a little bit more disposable income than my renting contemporary. Even better, when I get that reverse mortgage…
What’s not to like ?
I didn’t know you were gay!
Regards,
Shodan
That is another consideration - part of our retirement planning is to have our mortgage paid off by the time we retire, so we are only paying upkeep etc., not rent or mortgage (ideally, we’d like to have the house is good shape by then, too, with all our upgrades done).
You know, this is a really good time to become a Jehovah’s Witness. Buyer’s market, and all that.
I’m going through this exact “discussion” with my SO right now. I love renting, and it gives me a much better lifestyle than owning would:
[ul][li]I get to live in the middle of a vibrant urban city, a short walk from museums, art centers, clubs, stores, etc., and a very short commute to the office[/li][li]I have a 24-hour doorman, heated pool, gym, cleaning service, on-call maintainance, etc.[/li][li]I have beautiful views of the city from my windows[/li][li]If my job requires me to move, I can just move[/li]
[/ul]
But, she wants a house. And she’ll probably win this one. Buying means:
[ul][li]A crappy commute[/li][li]Living in suburbia, among the sort of people who live in suburbia[/li][li]Giving up my doorman, heated pool, gym, etc.[/li][li]Doing my own repairs, or paying to have them done[/li][/ul]
Renting means a better standard of living, but all she cares about is owning a home.
And listen, people, renting means you can afford a better place. The 200 or so families in my building (complete guess) share the costs of my amenities. Having a 24-hour doorman probably costs the building $100,000 a year, but it costs each of us only $500/year. Same for the heated pool. I couldn’t afford to heat a pool, but by splitting the costs 200 ways, I have one available to me. My nice gym? Same. My spa? Same. Roof needs to be repaired? 200 people will split the cost with me.
Buying may beat renting if you want to rent a single family house, but no way buying beats renting if you want to live in a city. Of course my SO doesn’t appreciate that, and that makes me sad.
It doesn’t work like that, the market rent for a particular location/quality unit is the market rent. You don’t get to tote up your expenses, slap on a 10% profit and have renters pay that price with a smile.
Ideally the market rent does cover your expenses + profit, and potential landlords should run the numbers ahead of time.
I ran the numbers for the city I’m in; and quite frankly, I can’t make the case that owning is better than renting without assuming some very, very optimistic appreciation.
Buying =/= single-family house. Though your point about being able to move if needed is a big deal.
My city is full of “accidental landlords”, who decided to invest in the housing market during the bubble and now can’t get out. The funny thing is that lots of the rentals I see are losing the owners money, but most of them probably don’t realize it because they don’t know how to appropriately track their costs. Landlording is a hard, cut-throat, full-time occupation, but it got sold as an easy way to earn passive profit to people who didn’t know any better.
The only alternative to renting, if you want to live in the city, is buying a condo (no co-ops here, not that I would live in one anyway). No way would I ever buy a condo, which combines all the disadvatages of renting and buying into one crappy package. That’s just my opinion, though.
You mentioned something that enforces what I already was thinking. He’s setting you up to buy his house. He wants to flip a house and he doesn’t have a buyer.