Owning vs. Renting

[KG]

Re: Owning vs. Renting

alot depends on the area too..

Around where I live good luck trying to find a place for some of the prices you guys paid. If I could do it all over again I would have lived with my peeps for a year or two after college and just saved up like crazy while making sure my credit score was right and my other bills were not too crazy

[cjonesfan921]

Re: Owning vs. Renting

You live on campus right?

Having no loans is good. Start saving up money and start establishing some kind of credit.

Live at home. No loans, as of now. My credit is poor, but I have paid off my card every month in time. My problem is a complication with an eye doctor. They have it on my report, I was 16 at the time, and they say I owe $106. Because of that, my score is pretty low.

[Pared]

Re: Owning vs. Renting

I pay $1100 to rent my apartment, I I wish I was paying that to own something, so I would say owning better then renting. at the end of the year I would have paid $13,200 for just renting which really sux.

I rent as well but my long term plan is to own. Saving up for a down payment.

Considering I pay the same amount for rent, when you put it that way I really feel like I'm getting cheated. Ouch.

[Altimus]

Re: Owning vs. Renting

Live at home. No loans, as of now. My credit is poor, but I have paid off my card every month in time. My problem is a complication with an eye doctor. They have it on my report, I was 16 at the time, and they say I owe $106. Because of that, my score is pretty low.

Wells thats good. Are you just assuming your credit is poor or do you know the actual score?

Are you sure about having the eye doctor as a delinquent account on your report?

If it is I would call one of the credit bureaus and try to work it out with them to have it removed. (Depending if you really owe the $106 or not) If you do owe I would pay it off.

Even having such small problem can cause your score to drop a lot and the end result can be a lot of declined loan applications.

[cjonesfan921]

Re: Owning vs. Renting

Wells thats good. Are you just assuming your credit is poor or do you know the actual score?

Are you sure about having the eye doctor as a delinquent account on your report?

If it is I would call one of the credit bureaus and try to work it out with them to have it removed. (Depending if you really owe the $106 or not) If you do owe I would pay it off.

Even having such small problem can cause your score to drop a lot and the end result can be a lot of declined loan applications.

I do owe it. It's my parent's fault, well and the doctor's fault. They took our insurance and said we owe nothing, then called back like 6 months later. My parents argued like hell, and we are at this point.

My score right now is, just checked, 595. I have that, and two cards on the report, both cards are recent, since September, and both paid off in time every month.

[ESPNdeportes]

Re: Owning vs. Renting

Echoing everyone else, it depends on your situation.

If you can afford it, owning is definitely better.

That said, if you are going to be in an area for a short period of time (a few years) and would have to sell in order to move, might not a great time to buy right now.

Also, don't buy if it means you have to take out a sketchy loan. Also don't bite off more than you can chew. There are tons of lenders that take advantage of people.....part of the reason we have so dang many foreclosures right now.

[Altimus]

Re: Owning vs. Renting

I do owe it. It's my parent's fault, well and the doctor's fault. They took our insurance and said we owe nothing, then called back like 6 months later. My parents argued like hell, and we are at this point.

My score right now is, just checked, 595. I have that, and two cards on the report, both cards are recent, since September, and both paid off in time every month.

Its weird that the eye doctor went on your report and not your parents.

If you plan on buying better bump that up to the 700 range.

[Trevytrev11]

Re: Owning vs. Renting

Where are you renting or buying? If it's California or Florida...rent. The housing market is out of control in a downward spiral right now as foreclosures are at an all time high.

How long do you plan on living there? If it's a few years, a house may not be the best idea. To start, you have much higher up front costs (possibly points on a loan, pre-paid interest, taxes and closing costs). It may take you a few years to earn back that money if the market isn't booming where you are at.

Can you afford the diffference? The down payment? First time home buyers can take advantage of FHA loand and you should still be able to qualify for a decent rate, but unless you can put up 20%, you'll also be paying PMI (mortgage insurance), which will take on a few more thousand up front as well as $75-$100 a month.

Plus, you got property taxes, possibly Home Owners Assosiation Fee's, Homeowners Insurance and maintenence.

[mjb2124]

Re: Owning vs. Renting

but unless you can put up 20%, you'll also be paying PMI (mortgage insurance)

PMI is such a ripoff. The way to get around it is to take 2 mortgages out. The normal 30 year mortgage and then a short 10 year mortgage with higher interest rate (of course, pay off this one in 5 or less years). One of my good friends was told to do this because he couldn't afford to put down 20% on the house he bought.

[Stu]

Re: Owning vs. Renting

Renting is really my only choice right now since I live and work in an area that I can't afford to buy. It kills me to see what some of you guys pay for houses while I can't even get a decent condo for less than 275k. At the same time though, I wouldn't be making nearly as much if I moved elsewhere so for the time being I rent and pay off as much of my high interest student loans as I can.

[pk500]

Re: Owning vs. Renting

You're absolutely insane to rent if you have the money to own. As ExtremeG said, you're throwing money away by renting, for these reasons:

1. You build no equity.
2. You receive no extra tax refund due to writing off mortgage income.
3. You pass on a chance to build your net worth.

Everyone must rent at some point, especially when they've just moved out of home or are starting on their own after college. But the faster you buy, the faster can build equity and your net worth, and start receiving those fat refunds every spring from writing off mortgage income.

Plus the old adage "pride of ownership" is not a cliche. It's true. The house is yours; you'll take pride in it and work on it. You'll become part of a neighborhood, a community, something you'll NEVER get as a transient in an apartment or rental property.

There's never a better time to buy than now with the collapse of the subprime housing market. There are a ton of foreclosures that are going for a song, and even non-foreclosed properties are going for much less than a year ago because of the glut of houses on the market.

Sure, credit is a lot tighter now than it was a year ago due to the collapse of sub-primes, but if you have steady income and good credit, you can get a mortgage. Often people are shocked to learn that a mortgage payment isn't that much greater than their monthly rent once they've put down a down payment.

There are almost no circumstances when renting is better than buying if you have a steady income, good credit, good budgeting skills and have plans to stay in the community you're located.

Take care,
PK

[pk500]

Re: Owning vs. Renting

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.

He's high.

What is your ROI when you rent? ZERO. You're paying every month; what are you getting financially in return?

What is your ROI when you buy? Could be plenty. Besides equity and larger annual tax refunds, you probably could sell the property for more than you paid for it -- much more in some cases -- in just a few years.

Then again, if your friend is so financially naive that he thinks renting has a greater ROI than buying, then maybe he should continue to rent. It doesn't sound like he's the sharpest tool in the shed when it comes to money.

Take care,
PK

[pk500]

Re: Owning vs. Renting

Less fun now equals more fun later. Thats why way I look at it.

Spot-on approach, man.

Take care,
PK

[SoMiss2000]

Re: Owning vs. Renting

I work in the mortgage industry and I'm so glad I'm a renter right now. The homeowners that I come in contact everyday, I feel so sorry for them. We considered buying a house during the summer but decided to wait another year for the market to turn around.

[mgoblue]

Re: Owning vs. Renting

I work in the mortgage industry and I'm so glad I'm a renter right now. The homeowners that I come in contact everyday, I feel so sorry for them. We considered buying a house during the summer but decided to wait another year for the market to turn around.

Yeah, it really depends on your area...right now the housing market is so high here I wouldn't even think about buying, I know it's just going to crash. I'm renting my parents condo, and it's saving them...otherwise they'd have to sell at a loss (there are still new condos to be sold). Not every situation is like Nivek's, otherwise everyone would be into real estate and be rich.