Owning a home vs renting a place

[bkrich83]

Re: Owning a home vs renting a place

Mortgage + taxes + repairs + time spent doing repairs and maintainance = rent...

I don't get this. Property tax is deductible and what you save in your income tax is more than likely more than you'll pay in property tax.

I've been in our current house now for 5 years, I think I have spent about 300 dollars total on repairs. (I do pay $70 a month for a gardner though). Figure the equity you are building long term.

When you rent, you are giving money away, and you aren't getting any sort of tax or income benefit.

I guess I don't understand this logic. Maybe I am missing something. Remember I went to California public schools, I am not that sharp.

[Crimsontide27]

Re: Owning a home vs renting a place

It all depends on your financial situation. Until we know that, any information you get here will be hit or miss.

Renting or owning can be the best situation for you, depending on your situation.

After going through due diligince, I can honestly say that buying a home would be one of the worst descions for me.

I was looking at a nice home worth about $160,000 down here in Florida and it seemed like a great deal. I actually could afford the 20% down payment and have a VA loan that keeps me at a reasonable interest rate. However, after sitting down and calculating it out....that same $160,000 home would end up costing me well over $300k by the time it was paid off.

Of course, if you have the cash like some of these high rollers on these forums, then buying a house is a great investment, but if you are looking at a 20-30 year plan to pay it off, you can more than double and most times triple the purchase price of your home by the time all is said and done. This is before figuring in any repairs and expenses, home owner association fees, insurance , property tax etc.

Reselling homes is not easy as well these days. Many people are upside down in thier homes and they want the bank to foreclose because the value of the home is now much lower than they bought it for.

My wife was a bank loan officer and I heard the horror stories about familys losing their homes and its so bad at this point that banks dont even want to take the properties anymore because they want to keep people on the hook for the loans.

Their are so many variables to consider that only you can decide what is best for your situation. What may be an excellent decsion for others on this forum, might not be the right thing for you.

[Gotmadskillzson]

Re: Owning a home vs renting a place

Oh ok so that was over a 4 year period ok. At 1st I thought you meant you did it in a year or two. Plus you and wife saving = more money in the bank to save.

And ummm Alaska is the coldest place in the USA.

[bkrich83]

Re: Owning a home vs renting a place

And ummm Alaska is the coldest place in the USA.

Ok, continental US and "ummm" ND is in the ballpark.

[VanCitySportsGuy]

Re: Owning a home vs renting a place

It cracks me up to see people here mention how they bought a house for $120,000, $140,000, etc....

In my neck of the woods, if you're looking to buy brand new, $320,000 only gets you a tiny 1 bedroom condo (usually only on the first floor). Even if you move out to the burbs, a new House will cost you at least $600,000 (and than you have the taxes and all the other fees that come with buying a home).

If you call a realtor and say you're looking to spend $140,000 maximum, they will laugh at you and than tell you there's nothing avaiable at that price.

I'm curious to know how housing prices in Vancouver compare to LA and San Diego.

[Crimsontide27]

Re: Owning a home vs renting a place

All depends on what area of the country you live in. I can purchase a house for 200k in North Alabama that would cost you $1million in Cali easy. The market value of the home we have down here in Orlando now is around $300k, I could purchase the exact same home + multiple acres of land for less than $120 back home in Alabama.

[mjb2124]

Re: Owning a home vs renting a place

Yeah, the numbers I used were based on discussions with other renters and homeowners in the area...

Sure, it helps to have new insulation, energy efficient furnace, etc...

But it's still expensive...

I'm not sure I'd call $83 a month in one of the worst winters expensive, but I suppose it differs for everyone.

[mjb2124]

Re: Owning a home vs renting a place

Holy smokes, what kind of job you got that you were able to stash that kind of bread ? Good lord I am in the wrong profession and majored in the wrong thing in college or something........gee whiz....

It's really not that much IMO. If you live at home right after college and don't have to pay your parent's rent, you can save a lot of money. It's been a while, but I think I lived with my parent's for 2 years after college and never had to pay them a dime (only had to pay for my cellphone and monthly contract and car). I saved close to 40K in that time and put a chunk of that towards the down payment for the townhouse I bought. I don't think I was making that much more straight out of college than most...it was pretty similar to what my friend's were making at that time. Damn, if you think that's a lot the 100K my wife and I put as a down payment on the new house would floor you.

The good thing at that time was I was putting a lot of money into a money market that was gaining 5% per month. I was getting a few hundred in interest every month. Now that same money market is getting 0.01%. It was certainly easier at that time to make your money work for you, but it can still be done today...just takes some patience and as Jonesy stated - made a priority.

[bkrich83]

Re: Owning a home vs renting a place

I'm not sure I'd call $83 a month in one of the worst winters expensive, but I suppose it differs for everyone.

No kidding, I paid more per month than that living in So. Cal.

It cracks me up to see people here mention how they bought a house for $120,000, $140,000, etc....

In my neck of the woods, if you're looking to buy brand new, $320,000 only gets you a tiny 1 bedroom condo (usually only on the first floor). Even if you move out to the burbs, a new House will cost you at least $600,000 (and than you have the taxes and all the other fees that come with buying a home).

If you call a realtor and say you're looking to spend $140,000 maximum, they will laugh at you and than tell you there's nothing avaiable at that price.

I'm curious to know how housing prices in Vancouver compare to LA and San Diego.

I just looked up my zip code. The median home price in my area is $601,000..

[Jdurg]

Re: Owning a home vs renting a place

It's really not that much IMO. If you live at home right after college and don't have to pay your parent's rent, you can save a lot of money. It's been a while, but I think I lived with my parent's for 2 years after college and never had to pay them a dime (only had to pay for my cellphone and monthly contract and car). I saved close to 40K in that time and put a chunk of that towards the down payment for the townhouse I bought. I don't think I was making that much more straight out of college than most...it was pretty similar to what my friend's were making at that time. Damn, if you think that's a lot the 100K my wife and I put as a down payment on the new house would floor you.

The good thing at that time was I was putting a lot of money into a money market that was gaining 5% per month. I was getting a few hundred in interest every month. Now that same money market is getting 0.01%. It was certainly easier at that time to make your money work for you, but it can still be done today...just takes some patience and as Jonesy stated - made a priority.

Exactly. I lived at home right when I got out of college for a few years. My job only paid me about $30,000 a year, but I had very few bills so I was able to put most of my paychecks out into savings. That made it a lot easier.

[bkrich83]

Re: Owning a home vs renting a place

Exactly. I lived at home right when I got out of college for a few years. My job only paid me about $30,000 a year, but I had very few bills so I was able to put most of my paychecks out into savings. That made it a lot easier.

Same thing I did. My first job out of college (1995) paid me about 30 grand a year. But I lived at home, and my only real bill was a $290 a month car payment. My parents didn't charge me rent, and I saved everything. Plus all my bonuses from work, I simply banked and reinvested. Before you know it, (ok well years later) I had a nice chunk of change saved up for a house.

[bkrich83]

Re: Owning a home vs renting a place

just takes some patience and as Jonesy stated - made a priority.

truer words have never been spoken on the boards.

[Scottdau]

Re: Owning a home vs renting a place

You would be surprise how much money you can save, when you stop going out to dinner too eat. Or just putting some aside each month.

[TMagic]

Re: Owning a home vs renting a place

So this is what I've gathered as advice for us young, or college dudes:

- It is going to be much better to rent NOW since we don't really have the financial means to own.

- Save as much as we can for several years ($20,000+) so that we can make a downpayment.

- Live at parents house if you can after school initially

- Owning a house is much better than renting over the long run.

- Do not purchase a house if you are not certain that you will be in the same area within a couple years

- If possible, buy now as housing prices are low and will go up soon.


Does that about cover it? I also want to learn a lot more when it comes to buying a house from experienced buyers as I know nothing.

[stewaat]

Re: Owning a home vs renting a place

TMagic - don't live alone. Get a roommate for as long as you can tolerate.