Owning a home vs renting a place

[Hassan Darkside]

Curious as to what you guys' stance on home owning is. Right now I'm in college and currently renting an apartment, and probably will have to rent for a while. I haven't really thought that far into the future about owning a home or anything.

Anyway, my mom told me that she actually thinks renting is the way to go. She talked about how one of our cousins who is a politician in Boston had something break that would cost $3000 to fix, and she still hasn't got it fixed, it's been a few years. I suppose one of the benefits of renting is maintenance and not having to be responsible for that type of stuff.

Thoughts?

[forensicd]

Re: Owning a home vs renting a place

Without a doubt owning. It may cost 3000 to fix something, but you are just reinvesting your money into the house. When you rent, you have nothing at the end. I bought my house in 2003 for 120k, and sold it this year for 160k. So, It didnt cost me anything to live in the house, as I got all my money back, and I made 40k to put down on the next house.

[Sting]

Re: Owning a home vs renting a place

Owning

[thegoat30]

Re: Owning a home vs renting a place

Owning.

Like someone else said, renting gives you nothing at the end. With home ownership, you are contributing to owning an asset (principal payments). Whatever isn't going toward principal (interest & real estate taxes) are deductible on your taxes. You get no deduction for renting on your taxes.

[bluengold34_OS]

Re: Owning a home vs renting a place

As a former broker, and current banker, here are my thoughts....if anyone cares!

If you are firmly planted in the area you are living, have a good steady job, then owning a home is an excellent idea. The prices are great right now, and value(s) should start to increase soon.

If you are not sure if you are staying in your area, are have a job with shaky stability....then stay away from buying a home. I see so many people who are stuck trying to sell their home in todays market, just have the door slammed on them one after another. It truly can prevent you from taking a job, moving for family...or anything else.

As long as you have some stability, then you can never go wrong owning a home. We rent right now in Denver ( $1400 a month ) for an 1100 sq foot apt. The only reason we have chosen to do so, is because we are moving back to the Chicago area for sure in January or February of 2011, and do not need the headache of a place still owed on in Denver.

[yankeesgiants]

Re: Owning a home vs renting a place

I've done both. I would say renting until your ready to assume a ton of things that you never had to worry about. Boston is a different animal all together, a one bedroom apartment will run you 2000 plus in a safe area, 1200-1500 in so-so area,700-900 if you live in a warzone. If you get a 30 year fixed mortgage, your looking at 1800 a month. You have weigh it out. Personally, I think owning a home under the age of 30 is not the best idea because your going to change alot between 25-35. In Boston it's not uncommon for 50 year olds to have roommates or kids having 4+ roommates to cut costs.

[ehh]

Re: Owning a home vs renting a place

Owning a home is obviously the ideal way to go as long as the situation calls for it, as BluenGold alluded to. It makes no sense for me to buy anything right now, I don't know where I'll be in a year job-wise and my rent is cheap as hell and I have no worries when something breaks.

A couple of my friends rushed into buying condos right out of college and then took a new job that required them to relocate which was a huge pain in the arse, again as BnG mentioned. One kid who's down in NYC still has a condo in CT that he's just eating the cost of right now. He hasn't been able to sell it and the person he was renting it to moved out six months ago. Luckily he's in finance so me makes a ton money and can afford to pay the mortgage on the condo and pay rent in Midtown east. Most people would be in deep ish if that happened to them.

[23]

Re: Owning a home vs renting a place

Owning ...shoot the tax benefits alone are worth it.

Once you hit a certain income bracket, you'll need to either own or have your own business or the IRS will be all over you anyway.

That said, renting benefits you little. You have a place to stay but you are paying someone else's mortgage for them.

[Stumbleweed]

Re: Owning a home vs renting a place

Renting is throwing money away, but if you're young and aren't really sure what you want to do or if you're staying in the same area for the forseeable future, renting is a better choice. Plus, just in the sheer monthly costs, you're better off renting for the most part, especially if you're on a younger person's income (sub-$40K) -- a mortgage and everything that comes along with it can suck up well over 50% of your check, and that's not even including all the other living expenses in a month. If you actually have good saving habits, etc., it's probably better to sock your extra money away into an investment account than paying a mortgage, at least while you're not totally settled.

Honestly I wish I had waited a bit instead of buying my place so early in life. Partly because I could've played vulture and gotten a great deal had I waited until last year or something, but also because it really limits my options. I'm basically tied to my job and income level because I'd have trouble paying my mortgage with anything less. So for example, my ability to go to culinary school or open up a food business part-time is compromised because I simply can't afford to live on less than I'm making right now.

However, I love owning my own place... I hated apartments and having to deal with everyone else's bull**** all the time. A house comes with more expense and maintenance, but you also get back what you put into it and more investment-wise, and you're not just throwing money away to someone else.

[mgoblue]

Re: Owning a home vs renting a place

Be careful with owning though, I know quite a few people who thought buying a house 4 or 5 years ago was a great idea, and now it makes fiscal sense to foreclose on the house because they're upside down...

Also, be careful, it's an investment and may not pay off. My parents got a condo here in Glendale, AZ 5ish years ago, and I'm renting it from them (they had to move to another area of the valley for work). The value of the condo has dropped drastically, where if they were to sell it they'd lose money. Thankfully I can help them and they're in good financial shape themselves, but selling a house can be easier said than done.

My friend's parents took over a year to sell their house in MI after moving to LA, and they had to take quite a hit on the price compared to what it was originally worth.

[Scottdau]

Re: Owning a home vs renting a place

You have to be careful, because like the others have said owning home can **** you over too. Especially if your house drops in price. I got my house for 400,000 and has taken a dip. It is a gamble, but it is good gamble, because you can get a lot of it.

[Scottdau]

Re: Owning a home vs renting a place

As a former broker, and current banker, here are my thoughts....if anyone cares!

If you are firmly planted in the area you are living, have a good steady job, then owning a home is an excellent idea. The prices are great right now, and value(s) should start to increase soon.

If you are not sure if you are staying in your area, are have a job with shaky stability....then stay away from buying a home. I see so many people who are stuck trying to sell their home in todays market, just have the door slammed on them one after another. It truly can prevent you from taking a job, moving for family...or anything else.

As long as you have some stability, then you can never go wrong owning a home. We rent right now in Denver ( $1400 a month ) for an 1100 sq foot apt. The only reason we have chosen to do so, is because we are moving back to the Chicago area for sure in January or February of 2011, and do not need the headache of a place still owed on in Denver.

This is really good advice.

[mudman]

Re: Owning a home vs renting a place

2 years is the break even point for owning vs renting.

If you know you'll be somewhere for more than 2 years then it's worth it to buy, less than 2 years then you should rent. This varies according to location, down payment on home, etc but that's the general rule.

[Misfit]

Re: Owning a home vs renting a place

You have to be careful, because like the others have said owning home can **** you over too. Especially if your house drops in price. I got my house for 400,000 and has taken a dip. It is a gamble, but it is good gamble, because you can get a lot of it.

At this point though the market has already bottomed out in most areas so anything you buy over the next year or so likely won't depreciate unless you don't take care of it. Anyone who bought four or five years ago (especially condos) has taken a hit. It's going to be a buyer's market for a good while longer and if its affordable and makes sense for you then owning is always better than renting.

[youvalss]

Re: Owning a home vs renting a place

My wife and I are currently renting an apartment and probably will sign for another year. Then, hopefully, we'll buy our own house (as long as we still have our jobs and things are good). Like people said, when you rent you pay money for nothing, because you ain't getting nothing at the end. On the other hand, if you pay low rent you can save some money that'll help you later on.
It all depends on the situation. I don't think any college students or college graduates need to think about buying a house...unless they're loaded with money or something like that. But for a family, I think owning a house is the way to go. Not to mention that the company that manages the building you live in, might decide to renovate the building, which means that you'll have to look for another place. And it's probably not easy with kids...