Owning vs. Renting

[Pared]

This is something my best friend and I have been arguing about recently.

What are the pro's and con's to each? He's concerned with ROI while I'm more concerned with personal equity.

I can see the argument for both sides but I thought I would get your take on the matter.

EDIT: I'm referring to House vs. Apt.'s. Which would you guys do... own or rent a house... or own or rent an apt./condo?

[ExtremeGamer]

Re: Owning vs. Renting

Well, I like to buy DVD's because the ones I want to rent are always out at Blockbuster. That's my reasoning

[Pared]

Re: Owning vs. Renting

lol

I guess I'll edit the original post for the funny guys out there.

[ExtremeGamer]

Re: Owning vs. Renting

lol

I guess I'll edit the original post for the funny guys out there.

Wait, you said I wasn't funny before.

In all seriousness, renting an apartment to me, is throwing money away. That's just me. But I rented for 3 years, have now owned for 4. It's more work, and I'm more tired owning a house, but in the end I'm happier because it's mine.

The money aspect is a no brainer. You have a tangible object with a home, you have a place to sleep with an apartment.

[Pared]

Re: Owning vs. Renting

I wrote the funny guys... I wasn't referring to you, EG.

[Double Eights]

Re: Owning vs. Renting

Rent an apartment until you get married.

Then buy/own a house.

[Pared]

Re: Owning vs. Renting

Rent an apartment until you get married.

Then buy/own a house.

This was my argument. The question is why do you feel that way?

I have my own feelings on the matter but his response is your ROI is lower when you purchase a home. He thinks it makes more sense financially to rent forever.

The only thing I can compare this to is leasing/owning a car.

[utexas]

Re: Owning vs. Renting

I bought my first home right out of college thanks to a healthy economy and a FHA loan. The tax benefit is huge and having equity to pull from in an emergency is great. My wife and I just moved to a larger home and are renting out our old home, so the investment is still paying off for me.

[mgoblue]

Re: Owning vs. Renting

Rent an apartment until you get married.

Then buy/own a house.

If you plan on getting married (some people don't) then I'd go with this plan.

Right now I'm not sure exactly where in this area I want to live, and who knows how things will change over the next 5+ years. I definitely plan on buying a house once settling down becomes smart. It's not always easy to sell right away if you buy and want to move in 2 years, depending on housing markets. I'm being cautious until I know I want to plant those roots.

[DaveDQ]

Re: Owning vs. Renting

If you can buy and also afford the upkeep of a home (if you buy an older home), buy a home.

Owning trumps renting every time.

[Altimus]

Re: Owning vs. Renting

I own a house and I also own a condo which I rent out.

As EG said, renting is pretty much throwing money away. You get nothing back. Usually when you own a house (for a while) and sell it you get a nice return on your investment. Not to mention you own it.

My dad always told me to buy and not waste time with renting. I only rented when I roomed with people during school, after that I bought my own place.

[ExtremeGamer]

Re: Owning vs. Renting

If you plan on getting married (some people don't) then I'd go with this plan.

Right now I'm not sure exactly where in this area I want to live, and who knows how things will change over the next 5+ years. I definitely plan on buying a house once settling down becomes smart. It's not always easy to sell right away if you buy and want to move in 2 years, depending on housing markets. I'm being cautious until I know I want to plant those roots.

That's the other side. If you don't know where you'll be living/doing, then renting is definitely a better option, especially with today's housing market.

[Nivek]

Re: Owning vs. Renting

Rent an apartment until you get married.

Then buy/own a house.

I could not disagree more. The biggest mistake any young man can make is to not have some sort of equity. If you have a good credit score, it's a great investment idea to get a mortage and buy house or a condo. With rent, you're throwing your money in the trash.

I was 22 when I bought my condo in Downtown Toronto for $167, 000. Three years later, the property is worth $250, 000. I flipped a 100K in almost three years. I could sell off the condo now, pay the bank back in full, and still have about 70K left in profit. I'm going to hold off until it reaches 300K, and take all the of the money I made towards a house. At this rate, I'd have a new house paid off before I'm 35. The EASIEST way to make a dollar in the Western society is through equity. Goes back to what my parents use to tell me as a kid - a dollar today is worth more then a dollar tomorrow.

[RockyTop1]

Re: Owning vs. Renting

I bought my condo about a year and a half ago. Like others have said, in my opinion, renting is throwing away money. Why pay some random company your hard earned money for no return when you could be paying down a loan, increasing your credit score (assuming you can make on time payments), building equity for emergencies and in the end, selling your place for money vs just moving out.

For those that said they don't know where they would be for so long, then I could understand the confusion on what to do because your situation is less concrete. But in my situation, I knew I was graduating from UT, working here for 2-3 years and then going back to school, so buying was a no brainer for me. My goal is to get the loan at least halfway paid off by the time I sell, then pocket the rest to help with a down payment on a new place, new car, grad school bills, etc.

[Altimus]

Re: Owning vs. Renting

I was 22 when I bought my condo in Downtown Toronto for $167, 000. Three years later, the property is worth $250, 000. I flipped a 100K in almost three years. I could sell off the condo now, pay the bank back in full, and still have about 70K left in profit. I'm going to hold off until it reaches 300K, and take all the of the money I made towards a house. At this rate, I'd have a new house paid off before I'm 35. The EASIEST way to make a dollar in the Western society is through equity. Goes back to what my parents use to tell me as a kid - a dollar today is worth more then a dollar tomorrow.

This is true. The value of my condo is going up as well but over the last year I've been thinking about getting out of it since I'm taking losses now. Especially this year, the property tax killed me. It went up from last year by 25% or something like that.

But I'm going to stick through it since that area is growing quickly and expanding.