Renting vs Buying

[sunnysideup]

I've been thinking a lot about renting vs buying lately. Where I currently live, I can get more for my money by renting than buying because I can't afford what the mortgage payment would be for what I want. Right now I'm pretty much stuck renting, even if I wanted to own because of that. House prices are really high and I wouldn't get much unless I paid a ton for it.

I also have a little bit of a fear of owning because I would have to pay for anything that popped up that needed to be repaired. All the taxes and insurance to worry about. Plus I don't have much of a down payment to speak of and I don't see it happening for years.

Is there anyone else out there in the same boat? Do you rent because you have to, but when you think about buying you aren't really sure if you can afford it? I don't want to stress over something as big as a house when I have the freedom of calling my landlord if something goes wrong. Are there people who choose to rent and never buy a home?

Part of me feels crazy for considering renting a better option than diving into really trying to get a home. I feel like I'm always getting told I'm throwing my money away with renting. What are some thoughts on this subject?

[DJ1972]

DH and I rented for the first 2 years we were married, and it drove him insane! His parents had always owned their home. It didn't bother me so much, my parents had always rented, they had 8 kids and never had enough to save for a down payment, and I think my mom liked the freedom of moving when the mood struck her. DH always says, "I don't want to be worried about rent or a house payment when I retire." We are trying to get house paid off before dd goes to college in 6 years, that is our goal anyway.
I think it's whatever works best for you.

[lullaby80]

We're in the same boat. We rent (never been able to buy a house due to outrageous housing prices) currently a 3 bedroom townhouse for $1750/month. If we were to buy it our mortgage payment would be about $2500/month not including taxes and HOA fees. So yes, it makes much more sense to rent! A sigle family residence in our area averages $600K and because of terrible commute times we are not interested moving more than 15miles away from DH's work.

So, we're happy to rent right now. The owner's of this house did an amazing job painting here, it looks like straight from a magazine. Also, we don't have to come up with the money to repair anything, we've lived here for about 6 months now and already there has been over $1000 worth of repairs that had to be done. Of course it would be so nice to own our own house but it's not gonna happen anytime soon.

[Telephus44]

There are many people out there who choose to rent and never buy a house. In fact, as much as we tend to think of owning a house as part of the great American Dream, there are many people who are better off never buying a house. Many reasons - including the ones you mentioned about having to maintain the property - make renting a better situation.

And instead of thinking of rent as "throwing your money away" try and think of what it really is - trading your money for a place to live. In financial terms, if it costs you $1000/month to rent and $1500/month for a mortgage payment - then you may be better off taking the extra $500 and saving or investing it. Part of the reason people tout homeownership as a great way to create wealth or as an investment is because it forces you to invest - and a lot of people don't have the self-discipline to put money away on their own. Paying a mortgage forces them to.

In our situation, we want a house mostly because we have some things that we'd like to do that we can't do while renting - DH wants a radio antenna and I want a large garden. We'd also love to do an earth-sheltered home with solar and a whole bunch of other "alternative" things. We are saving for a down payment, but right now for us the cost of our rent ($1030) is a lot less than what we'd pay for a mortage (about $1500). We have a goal of paying no more than $1250 per month for a house payment - we're hoping that by the time we've saved up that house prices will fall enough to make that payment possible. But we see no reason to rush into buying a house and paying all that extra money just to own a house.

Here's an article that is a little heavy on the investing side, but explains why renting is cheaper than buying (IMHO it should be the renting can be cheaper, not necessarily IS cheaper, but I didn't write the article!)

http://articles.moneycentral.msn.com...GetRicher.aspx

[pita1213]

right now we rent. since 98 we have always rented whatever we were living in. for us it was the right choice because things haven't be very permanent for us. it would have been a horrible headache trying to sell and buy every time we have moved. another reason was trying to come up with a down payment.
now we are looking at buying. we just have to decide if we want to stay where we are or move. i'm leaning towards moving out of state because the prices of houses here versus where we are thinking about moving are outrageous. taxes are nuts here too. there are somethings that cost more where we are looking, but not enough to offset the savings of what a morgage would be there.

i would rather be in control of repairs than to have to fight with inept landlords and complex managers. had one that wouldn't replace an $80 burner, so instead he spent several hundred on repair man visits. i just want to fix things the right way from the start.

[dcompton]

I rent and would positively hate owning a house. It would feel like a huge ball and chain. I live in an apartment complex that I really like, in a safe area, but one that is not as fashionable as it used to be, so my rent is currently $475 a month. (Louisiana is a pretty cheap state.) I have always been in apartment complexes and they have always been well-managed; I have never had anything but prompt and courteous attention to maintenance.

I love the freedom of renting. If I get obnoxious neighbors they are generally moved along by management fairly soon, and if not -- I can just pick up and leave without having to sell a house. It is true I am not building up equity (as everyone is quick to tell me), but I think of it as paying for the freedom that is a much higher priority to me. It also means freedom from all the upkeep. I think it's a deal.

Also I have the consideration that with no family, after my inevitable death, some poor friend would get stuck with the burden of dealing with the house. Not for me. I want my friends to be free too. What will the future bring financially? I have no idea, and they day may come when I would be more than happy to have that equity in a house. But on the whole, it's not worth the personal cost to me of being tied to something as immoveable and burdensome as property. So owning a house has never been, and never will be, a goal of mine. Just my personal choice.

[i.m.cheap]

I have owned a house. A nightmare of expensive upkeep. We had $4,000 in maintenance expenses the first two years we owned it. The central air went out first, then the furnace, the the main water line broke, and had to be replaced at our expense. I will happily pay rent, and let someone else take care of all that, and the yard too.

I also like to move, and not be tied down. We just moved today, in fact. It was our seventh move in 12 years of marriage.

[Neeley]

We own our home and love it. We keep a home warranty that covers the house and pool. It only costs $300 a year with a $100 per incident deductible. When we get ready to move, we put the house on the market and find another. It is not a difficult thing to do. We get the mortgage pre-approved for a certain amount. That way when we find something we like we can make an offer without having to worry about the financing aspect of it, since it is already taken care of. The housing market where we live stays pretty steady. We have one major air force base and its annex in the city so there are always people buying and selling houses here. We have always lived within two miles of the base so selling a house is not difficult as long as the house has been taken care of.

Rentals here are outrageous. You pay a lot more to rent around here vs buying even after you figure in taxes and insurance. Very few owners allow the renters to have pets, and I love my animals - another BIG reason I like buying my own.

We bought our first house when were 19, newly married with a baby. We sold it three years later for double what we paid for it. We have rented in the past and I did not like it.

We pay for all of the taxes and insurance in our monthly payment. I love the fact that I do not have to be bothered with that aspect - let the mortgage company handle it all. Our interest rate is a fixed rate at only 5.25% - cannot complain about that one at all. We are also very lucky that we live in a city with very low property taxes and reasonable home owners insurance rates.

For us buying is a better option, and I say do what works best for you and yours whether it be renting or buying.

[Frugal Girl]

We've rented for the last 2 and half years of our marriage, and I've lived in apartments all my life. Dh has not. Apartments = college to him, since he's been in apartments since he started college. He hates living in apartments. I don't mind.

We found a small house that we are moving in this month, and his entire mood has changed, as if he won the lottery!

We locked in a great interest rate and the payments will only be $200 more than our rent was and that's including tax and insurance. It's a small home, but it has a good sized backyard and is surrounded with neighbors who could be our grandparents. (Which is fine by me. I wouldn't want to live around people my age.)

I have hated when someone (i.e. dh) says "we're throwing away our money" "we need to build equity" "we could find a house bigger than this apartment."

In response, I would say (and agree with a former comment) "Our money goes toward a place to live." "Equity schmequity." "if we got a house bigger than this apartment, we wouldn't be able to afford it."

As usual, I'm right. I have to get rid of quite a bit of stuff to move into this home, but due to losses of physical things in the past, I've learned to not become attached to things, so it doesn't matter. What's important, here, is that I was right. lol.

My coworker, (a man who knows everything...smirk) says "when you become a homeowner, you become an adult. It makes you feel like an american."

People can say the dumbest things. I don't want to be a homeowner to feel like an adult or an american. I want a home to have a yard and more privacy than an apartment.

Everyone wants different things, so assess your needs. If it's a financial issue, wait until you have the money, but dh and I got a really good deal for a 100% loan (mortgaging the down payment).

Loan rates went up this week and the lowest a person can get is 6.8%. We locked in a 6.25%, so we feel kind of lucky.

There's also a story about people who got really low interest rates a couple of years ago who are losing their homes: http://realestate.msn.com/buying/Art...6646&GT1=10130

Sorry, this is a bit long, but good luck, and remember, pray that God will lead you through what you should do over it. You'll get an answer. He usually tells me to "wait."

Hugs!

[kittykatstrong]

I live in a townhome right now. I want to live in house but the mortgage would be to high. I would love a yard so that I could have a garden but it is a trade because there is a playground within walkin distance and a pool. We also would have to move out in to the boondocks. So I would love to own a house but can't afford it right now.

Also we have had a lot of problems and it is so easy to just call up the landlord and not have to worry about it. In fact the repair guy was here fixing the sink and I said to him, That is why I will never own a home I could not fix that on my own.

Katy

[geckoace]

my mom always rented apartments my DH grew up in a house. i wanted to own a home but im not accustomed to so much upkeep and i DO NO mow lawns LOL. fortunately we decided to buy a small house and i discovered that i absolutely love home improvements! (DH is acutally a mowing fanatic) so it worked out. i think that there is no wrong answer its a matter of preference. don't buy a house just cause the "cool kids are doing it" so to speak. a house payment is a huge responsibility and if you are not ready for it can crush you. do what makes financial sense for you now and if that changes then you can re-evaltuate later. JMo

[Jaded]

You know, if I had to do it over again, I would probably rent. I'm having problems with the upkeep on my house. I make enough for the mortgage payments, but illness and injury have wiped out my savings, so I have no money for repairs.

[Dancing Lotus]

One yr ago we had to make the choice between rent or buy. We looked at renting and on average we were looking at 1,100. We figured out that if you bought a house at about 215,000 with the money we had to put down we would be looking at 1,100 for a lot more space. So we bought. It was great for that first yr. Then they had to reasses for the new yr and we got hit big with taxes and an insurance hike. Now we pay 1,400. Im still glade we bought but I guess we should have bought cheaper. NOt easy to do as we were looking in one of the lower price ranges for our area.

[jamie79]

Well I have lived in just about everything being military. Apts, trailers, owned my own house ( do know), military housing. For us as we get older, we enjoy owning our own home. I hate sharing walls with people. Dont want to put up with their noise and stuff. Landlords who dont want to fix anything either.
Dh is very handy which is helpful. This house we own now we have put $9000 in it in little over a yr but I know I will get that all back when we sell. We are not selling for awhile unless the Army has a surprise for us.
I like painting the walls whatever color I want and I love that noone can tell me how many cats I can have ( Dh says 4 is enough) LOL
Anyway, I think its whatever works for you and your life that you need to do.

[kittykatstrong]

This calculator will help you to compare the costs of renting to the costs of buying a home.

http://finance.move.com/Homefinance/...?poe=homestore


Katy