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What's best - rent or own a home?

post #1 of 16
Thread Starter 
Which do you think makes the most financial sense? The traditional wisdom is to own a home, but I'm not sure if that's still the case. Also, it might depend on the housing market where you live.

What are your thoughts?
post #2 of 16
It definitely depends on your situation. I personally would not consider buying a home if I didn't plan to stay in it for at least five years. The rental market is way more expensive than the housing market in my medium rust-belt city. I was renting for over $900 a month and bought a much nicer place for $540 a month including mortgage, taxes, insurance and utilities. Some months there are unexpected repairs but in the last year and a half I have saved money by owning. Being handy and able to do small repairs without hiring someone makes it more beneficial to buy.
post #3 of 16
It definitely depends on the market, your situation, and your plans.

I prefer renting for the indefinite future for these reasons:

I am likely soon to be single.

I have very little knowledge of the nuances of home ownership- navigating and negotiating contractors and realtors.

I don't know that I want to be tied to a property in my current location, though it could potentially be an amazing investment in our fast growing metro area.

I don't know that I could maintain a house financially, for mortgage and repairs, etc.

However, if I knew I could afford it indefinitely and wanted to have a place for my children to inherit, I certainly would buy.

I am always harboring some sort of wanderlust, which means I want to be able to easily move on, should the right opportunity arise when the kids are much older. Sure, I could rent out my property, but that still leaves me with a major responsibility looming over me. Ideally, I would eventually purchase some bit of land to use or hold onto however I see fit, but that is a pretty far off possibility right now.
post #4 of 16
After owning a home, losing it due to unforseen circumstances, and now renting, I think renting til you have a huge down payment to keep the payment lower is the best idea. With job loss and the economy so crazy, I think that living within your means, saving up 20 percent like they have done, and then buying a modest home is the best idea.you never know what tomorrow will bring so if you're payment is low and you lose your job or something happens, you're able to afford the house on a lower income or rent it out to move. A house ties you to the area always and theyre liabilities. I put so much money into one and never saw a dime for it. Knowing that, it helps me maintain focus on homes. Thats what my limited knowledge thinks.
post #5 of 16

I prefer buying.


-No 3 month inspections forever and ever. No worrying over every scratch, mark or if I haven't maintained the garden enough to the agent's standards. The stress from all these things when you have young children can really add up.

-No worrying about whether or not we will have a home next month (due to landlord moving in or wanting to evict for whatever reason).

-We are able to live in an environment which suits us exactly (through remodelling) - We no longer have to put up with moldy carpet or walls, less than optimal house security, faulty appliances etc. Some landlords are quick to act with issues and some are just asshats and stall for as long as possible. You don't know which one you're dealing with until an issue presents itself.

-We want our children to inherit a property.

post #6 of 16

After owning a home for 9 years and selling it at a huge loss, I am of a mind to never buy again.

post #7 of 16

I am a landlord, homeowner and previously a house flipper. Home ownership can be expensive. Without knowing the market you are in, your financial situation and your long term goals, the answer isn't so simple as buy or rent.


I never hesitate to buy the right house (which is why I've owned over 15 homes in the last 10 years). Some I lived in. Some I sold, some I rented out. All were purchased very carefully after calculating expenses to repair, purchase cost, market, etc. We currently own over $750,000 in real estate. It has been a large investment for us that has begun paying off hugely. We started off very small on a very low income with a nice down payment. We have simply built up from there. We will continue to do so, as we plan to retire in the next 10 years or so living solely off of the income from our properties and my husband working part time as a contractor so we can buy into insurance.


This isn't a situation that everyone can tolerate. It involves spending a lot of time fixing things yourself (to save money on contractors) and research, to know how the market is looking, knowing when to refinance properties, when to sell, when to rent, when to raise rent, how to choose a renter, etc.


If you have good credit, a sizable down payment (at least 20%) a good housing market, stable employment, the ability to make some repairs yourself, then I suggest buying. Buy within your means, considering whether you could afford your home if you could only collect unemployment, etc. Consider the full cost of insurance and plan on an insurance policy that you could realistically afford if something were to happen. Don't take the policy with a $1000 deductible if you couldn't come up with $1000 in less than a week. And ALWAYS save for a rainy day. Houses need repairs, even and especially brand new houses. Plants for your garden, plumbing repairs, paint, caulk, electrical, etc. When its your own, you want it to look its best, so have a budget for keeping things looking good.

post #8 of 16

After selling our home at a loss due to the neighborhood's major decline, we are now renting a home.  My fiance would like to rent a home from now on, he likes the freedom.  I would prefer to purchase again in a few years.I dislike not being able to make the house I am in my own.  And investing in things for the outside of the house like plants or decorations seems a waste.

post #9 of 16

I've only rented, but currently we are paying $1,500 for a home that would cost half as much if we were paying a mortgage. I definitely think it depends on the housing market (and rental costs) in your area, as well as job stability.

In our case, I think it makes more sense to own, which is what we plan on doing when we have a down payment saved up. If you live in an area with high housing costs and low job security, renting is probably a safer option.


ETA: $1,500 is rent only. We also have to pay utilities.

post #10 of 16

I live in a high priced housing area so it may not be true everywhere. In my area I can't make the numbers work by buying unless I move away from my preferred neighborhoods. I would be paying $500-1,000 more to buy in my current neighborhood. Even with a huge down payment I still think I can do as well or better investing that than the appreciation on a house.


Also in my area, buying is very competitive at the lower ends while there are rental vacancies and several hundred new rentals about to flood my zip code. While condos are pretty much built. (I'm in an urban area so there are very few houses that haven't been converted into rental properties.)

post #11 of 16

I've owned, I've rented, I've roommated.   I prefer to rent.  Knowing this place isn't my problem, knowing if something breaks its really not my problem (yes i could fix it and 'bill' the landlord if needed) but right now and for the distant future I like renting.  If i was ever in a position to buy again I would have some pretty strict guidelines about where/what I was getting into.   NO HOA etc. which would be difficult because I would want a condo of somesort so the hoa would need to be very 'hands off'.

post #12 of 16

My husband and I bought our house two years ago this week. It was sort of a terrible time (our loan officer was, well, less than stellar), but I can't put into words how much I love that we did it. Our mortgage with taxes and all for a 2 bedroom 2 bathroom house with a fenced-in yard right near the ocean is only $200 more a month than we paid for our little 1 bedroom 1 bathroom apartment downtown with no yard. I love that we make all of the decisions, that my husband is bringing in friends he met at the pub who are carpenters to teach us to (slowly) renovate our kitchen, to replace our front door. I love that he's learning on his own how to install homemade baby gates and build shelving. I love that at least a portion of our money every month is investing in our future instead of going into the pockets of a landlord. I love that I chose the colors for the walls, that we can change anything when we like, and no one is looking over our shoulder while we do it. 
We may move out in the next 3-5 years (financially, it doesn't work to spend fewer than five years in a house you buy, but we bought this with the intention of it being a starter home. It fits us and our son now, but 1-2 kids down the line, we may want something else), but I'm so glad we have it now. 

post #13 of 16

Oh we are renters!


I have this big ole' homestead-with lots of land-off the grid fantasy and it can't happen in this state...it's just wayyyy too expensive. But for now we are staying; my entire family is here, my brother + his wife + baby on the way our here, my friends are here, and we are renting an affordable awesome little house with goats + gardens and things. I'm trying to bloom where I'm planted, even if I want to take off to New England. 


I don't want to buy until we can convince my mom to leave the state with us. Or buy something with my brother, or..I don't know! Loads of crazy ideas.  I love renting because we can afford to pay for something lovely here now (that we wouldn't be able to buy..) and since it's an old house and things are constantly going wrong, the landlord fixes them! New roof, water to the barn, fixing up the driveway..things like that. 

post #14 of 16

I'm in an area where buying, even with a small down payment and taxes and insurance, is cheaper than renting. I would save money if I could buy. Just waiting for my credit to "season", as they say, and then I am going to buy.

post #15 of 16

Buying has worked well for us.  We are in the 3rd home we have owned. We have always  bought the least expensive house that needs the most work in each of our neighborhoods. We are stretched in our current neighborhood but we love the schools, the location and the people and we could not afford to rent here. Because of the money we have made on our last 2 homes we had a large enough down payment that we are paying about $1500 less a month than the rentals that are available here.


Of course, this is just for our area. One thing that differs by area is how quickly you can sell a house. Fairly priced homes in our area usually sell in about a week (we sold both of our first two houses the first day they were on the market) so we don't feel worried about getting stuck with a houose if our finances change. I know I have had family members in other areas have houses on the market for more than a year before selling at a big loss - how quickly you can sell would be an important part of the decision making process for me. 

post #16 of 16

I'm like Lazyhead.  The market where I lived crashed way harder than the rest of the country.  We've been in our house for six years and are about to lose so much when we sell soon.  But we just can't stay here forever, and it looks like things will never return to what they were when we purchased.  I will very very happily rent for a couple of years at least.  After being stuck for four years, I want my freedom.


That being said, I am going to miss being able to do whatever I want to my house.  I paint constantly.  It's a small price to pay though to improve the situation we are in now.

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