Thanks for voting!If you’ve ever wrestled with the “renting vs. owning” question, you know it’s not always an obvious or easy decision. Frugal Dad enters the ring and pins down his thoughts on renting. According to him, renting doesn’t always equate to throwing your money away. What do you think? We came up with our own tag team of opinions from two of our more vocal and passionate Savings Associates, one a happy renter and the other a satisfied buyer.
Renter Christy: “When I was looking for a place to live after college, I had just started a new job, and had just gotten married. We weren’t eating ramen nobles anymore, but we also weren’t enjoying Kobe beef for dinner either. We weren’t sure where we would end up, and we didn’t have money for a sizeable down payment. We decided that renting for a few years and saving up some money would help us get a better rate on our mortgage in the long run. It is great to know that our landlord will cover the cost of any household maintenance and upkeep. We don’t have a lot of wiggle room in our budget, so replacing a faulty water heater or washing machine is out of the question. Bottom line? Renting is the best for us right now, and we are hoping it will pay off big in the long run.”
Homeowner Heather: “I had been renting in the same neighborhood for over 3 years and when a house became available just down the street, I couldn’t pass it up! I had already saved a 30% down payment, and I knew I could handle the expenses associated with taking this next step. Owning my first home meant no longer writing checks to someone else’s tax write-off. Plus I bought in the city, and finally saw my city taxes at work. Free trash removal is one of the many things I paid into but didn’t reap the benefits. My lot was mostly landscaped and full of flowers, so I didn’t have to consider buying a lawnmower, or putting forth the effort to mow the lawn. Ultimately the decision to buy my house wasn’t mine. It sounds super cheesy, but when I first walked through the front door, it felt like I was home. Love at first sight. Doing my math in advance and making allowances for different expenses prepared me to look for a home of my own. Falling head over heels for the property made the purchase easy.”
Christy and Heather may have opposing thoughts, but each was able to tag in and come up with a personal win. An important, life-changing move like buying a home is something you have to plan (and budget) for. Think of it as the main event. If it makes sense for you and yours, take advantage of the current housing market (and tax benefits). But if it would be a better decision to hold off, don’t feel like you are falling behind. The reality is no one is challenging you to a title match.
Tags: Homeownership, Own, Rent
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I bought my first home (the condo I’m living in now) just as the housing bubble was about to burst. My home lost about $30k in value within the next two years. It still stings, but I’m mostly over it now. I was sore about it for a long time, though. If I’d kept to renting for just one more year, I’d have gotten myself a cheap home and the nice head start that comes with it. Can’t win ‘em all, I guess!
My boyfriend used to want to buy really badly, but with what happened to the ecoomy, if he’d bought when he originally wanted to it would’ve been foreclsoed and he’d probably have had to declare bancruptcy. Now we’re perma-renters unless/until we find a place we can imagine never wanting to leave AND can afford to buy the property outright. We never, ever, ever want to finance ANYTHING.
“It Depends”
When the economy goes bad that doesn’t mean instant forclosure. Lay offs happen in good times too. Save up a down payment if your going to buy (make sure to keep a good amount on the side for home repairs, they happen!). Sometimes I wish I was still renting (water proofing the basement for $6000 comes to mind) but that doesn’t change the fact that I wanted to own and work on a house. If I kept my money in the stock market instead of buying my house I would have lost about the same amount of money. So for me buying was the right choice. Instead of eating out I hang drywall, paint, and rewire. So if you want the responsibility and are willing to pay for it, buy the house. If you want to let the landlord make the choices and save on repair costs, rent.
I like owning. My wife and I didn’t buy our house as an investment, we bought it for a home. A place where we can enjoy our grand-kids, grow a garden; a place for the dog and cat to romp; a place where I can crank up the music; a place where we can live and grow old together.
When I got divorced in 1990 I bought a condo. I was very unhappy because the monthly maintenance fees rose occasionally for long periods of time (assessment) for needed repairs such as new roofs, boilers, etc. Taxes went up and at that time I’d bought the condo for about $129 K and housing took a dive and when I wanted to get married (1995) and move out I ended up renting it until 2005 because the market was down and the highest price I was offered was $85K! I sold it for a profit finally but it was a long ordeal!
I’m divorced again and have chosen to rent. My landlord can handle all the maintenance and I’m such a good tenant (in a private house) he doesn’t raise my rent!
don’t stop the swap. Me and my friends use it. we were away in august and weekends in september but want to keep bringing in clothing and things. If your people don’t understand it, send them to work in bloomINGdale’s down the street. we like the swap. cool the rulemakers and just let it go. sometimes i bring things in during the week which is good. maybe i missed it but sometimes i don’t see them on the table.
US rent vs buy calculator:
http://www.dinkytown.net/java/MortgageRentvsBuy.html