Owning a home vs renting a place

[SuperBowlNachos]

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....

This will make you laugh pretty hard

My brother just bought a 4 bedroom, dining room, computer room, 2 bath house for $103,000. And he got the $8,000 rebate. This same house in Cali or a place like Boston would be at least $400,000

[Hassan Darkside]

Re: Owning a home vs renting a place

So did the majority of you guys buy houses while you were still single?

[grunt]

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.

No one knows if housing prices has reached their lowest levels. When you are buying/renting a place to live you are not just getting a place to live but you also are buying goods and services. If you have children then schools are very important and the amenities the neighborhood have to offer.

Buying vs Renting

http://www.getrichslowly.org/blog/20...f-home-buying/

[mjb2124]

Re: Owning a home vs renting a place

So did the majority of you guys buy houses while you were still single?

Depends. I bought a townhouse while single, but my first single family home was built/bought with my wife this year.

[mjb2124]

Re: Owning a home vs renting a place

This will make you laugh pretty hard

My brother just bought a 4 bedroom, dining room, computer room, 2 bath house for $103,000. And he got the $8,000 rebate. This same house in Cali or a place like Boston would be at least $400,000

He didn't get the $8000 unless he did something illegal. It's based on a percentage of the cost of the house (10% to be exact). So your brother got $1030. The media and Government didn't talk about that very much while touting this credit.

[snepp]

Re: Owning a home vs renting a place

"Pro" for rentals...

One word:

HEAT

Mine is included in the rent, so I save $400-$800 per month versus those who have to pay for it in either an apartment or home...

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 have a 35-year-old highly inefficient furnace and pretty awful insulation, our entire gas usage for a year comes out to around $1,000, which includes gas used for the water heater as well.

[thegoat30]

Re: Owning a home vs renting a place

He didn't get the $8000 unless he did something illegal. It's based on a percentage of the cost of the house (10% to be exact). So your brother got $1030. The media and Government didn't talk about that very much while touting this credit.

Isn't 10% of $100,000, $10,000? The credit is capped at 8,000...

[grunt]

Re: Owning a home vs renting a place

Isn't 10% of $100,000, $10,000? The credit is capped at 8,000...

You are correct.

[mjb2124]

Re: Owning a home vs renting a place

Isn't 10% of $100,000, $10,000? The credit is capped at 8,000...

Yikes...you're correct. For some reason I've always thought that it would cost 800K to get the full credit (in fact, 800K is the max someone can buy a house and still qualify for the credit...just researched that). I was completely wrong on that one.

BTW, I did notice while doing my taxes that if a person moves from their house in the next 3.5 years and took the new homebuyers tax credit, they have to pay back the credit.

[thegoat30]

Re: Owning a home vs renting a place

Yikes...you're correct. For some reason I've always thought that it would cost 800K to get the full credit (in fact, 800K is the max someone can buy a house and still qualify for the credit...just researched that). I was completely wrong on that one.

BTW, I did notice while doing my taxes that if a person moves from their house in the next 3.5 years and took the new homebuyers tax credit, they have to pay back the credit.

Yeah, they do have to pay it back. I'm sure that was put in to place to prevent some abuse. I'm sure there is still more.

There is also another credit in place for people who have owned a home for 5 years, & bought a new house in 2009. This credit is $6,500 instead of $8,000. Don't know if that would apply for you or not...

[p_rushing]

Re: Owning a home vs renting a place

I bought my first house while single. I like privacy, don't want to hear people in the apartment above, below, or next to you. I have a great job and steady income though. I bought it 2+ years out of college.

[mjb2124]

Re: Owning a home vs renting a place

Yeah, they do have to pay it back. I'm sure that was put in to place to prevent some abuse. I'm sure there is still more.

There is also another credit in place for people who have owned a home for 5 years, & bought a new house in 2009. This credit is $6,500 instead of $8,000. Don't know if that would apply for you or not...

I looked into it, but was denied. I owned a home before the house my wife and I built this year. I owned it for 7 years so I qualify for the long time homebuyer credit. However, I got married in 2008 which means my wife doesn't qualify for that credit because she only lived in that other house for 2 years. She qualifies for the new home buyer credit, but I don't. So basically we got screwed because we got married. I even called the IRS and was told we don't qualify because we got married. There are some strange stipulations out there and we just happen to fall into one. If you ask me, it's BS that we didn't qualify for the $6500 due to our marriage.

[youvalss]

Re: Owning a home vs renting a place

I bought my first house while single. I like privacy, don't want to hear people in the apartment above, below, or next to you. I have a great job and steady income though. I bought it 2+ years out of college.

That's great!

On the other (far) side...A 52-y/o guy who works with me, is still renting an apartment - with a roommate!!! The guy can hardly afford living on his own and he's 52!!! I don't know how he can handle it...

[thegoat30]

Re: Owning a home vs renting a place

I looked into it, but was denied. I owned a home before the house my wife and I built this year. I owned it for 7 years so I qualify for the long time homebuyer credit. However, I got married in 2008 which means my wife doesn't qualify for that credit because she only lived in that other house for 2 years. She qualifies for the new home buyer credit, but I don't. So basically we got screwed because we got married. I even called the IRS and was told we don't qualify because we got married. There are some strange stipulations out there and we just happen to fall into one. If you ask me, it's BS that we didn't qualify for the $6500 due to our marriage.

My wife & I missed both credits too. She owned a house before we got married, but only for 4 years. I was a first time homebuyer, but because my wife wasn't, we lost on that one too.

That credit was designed exactly for people like you & your wife - as well as me & my wife. But, they put in enough hoops to make it more difficult.

Who is more likely to spend their credit (the secondary purpose of it - primary being encourage more activity in the home market)? A first time homebuyer, who likley will stash the money away (which I agree with) or the more established buyer who is likely moving into a larger home (i.e. need more furniture, etc)? The 2nd, right? Opportunity missed...

[mjb2124]

Re: Owning a home vs renting a place

My wife & I missed both credits too. She owned a house before we got married, but only for 4 years. I was a first time homebuyer, but because my wife wasn't, we lost on that one too.

That credit was designed exactly for people like you & your wife - as well as me & my wife. But, they put in enough hoops to make it more difficult.

Who is more likely to spend their credit (the secondary purpose of it - primary being encourage more activity in the home market)? A first time homebuyer, who likley will stash the money away (which I agree with) or the more established buyer who is likely moving into a larger home (i.e. need more furniture, etc)? The 2nd, right? Opportunity missed...

You nailed it. We just spent $3800 on blinds and about a thousand on some end tables and I still need to buy a lawnmower and garage cabinetry/supplies (not to mention whatever my wife wants to buy). We haven't even thought about painting yet or putting any furniture in the dining room and living room (and that furniture will be expensive, but that's for another year).

With the tax credit, we probably would have put a deck on the house this summer as well. Not now. We'll have to wait until next summer as we want to pay in full and not finance the deck. I've been pretty annoyed that people like you and me didn't qualify for this tax credit. It seems like such a small percentage of the population to leave out.