14 thoughts on “Rent or Buy?”

  2. “The trick is to live somewhere really dull.”
    Amen.
    We’re hoping to close on a house in spring 2013 and we just did the inspection.
    http://xantippesblog.blogspot.com/2012/02/house-inspector.html
    On the one hand, it’s a bit aggravating to realize that just while living in Texas, we will have spent $70k in rent. On the other hand, our location has been perfect, the college maintenance people are fast, efficient and call me ma’am, it’s been way cheaper than buying the equivalent house and paying taxes and maintenance, we’ve had a chance to adjust to yard work and minor house maintenance and the peculiarities of local housekeeping, we have no revolving debt, a paid off car and substantial savings. We’ve also had a chance to settle in at school, form opinions about different parts of town, commuting and what and who we need to be close to. It has also been very nice to watch the continuing price drops.
    The house we are probably buying is about 85% OK, but there are definitely aspects of it that make me think stuff like:
    1) We’re never going to go on a nice vacation again.
    2) It’s going to take years to have enough money on hand to do something about the horrible pink and purple bathroom (see blog post for details).
    3) This is about twice as much money as I want to spend.
    4) People are going to think I like all of this pink that I can’t afford to renovate away right now.

    Like

  3. I do keep my eyes open for bigger houses or similar-sized houses with bigger yards. It’s just that every year it gets harder and harder to move because we get more stuff shoved in the basement and I get pickier.

    Like

  4. While it is clear that many people who did buy shouldn’t have, I’m not clear as to why renting is now being considered a uniformly safer option. You have much more control of the maximum your housing cost can rise to, assuming you budget for repairs and such.

    Like

  5. Yeah. I think over the long term, the cost of renting and buying should be about the same. You should rent if you might be moving soon, and buy if you are committed long term, but the differences should be pretty small.
    The fact that the market went out of whack for several years doesn’t change the underlying reality.
    We bought 10 years ago at what — at the time — felt like the peak of a bubble (we paid 50% more than the previous owners did 2 years earlier). The value pretty much increased another 50% and then crashed back to the price we paid over the last decade.
    The advantage of buying (and not moving) is that we never think about it. Our house could be worth $1M, or we could be deep underwater on our mortgage, and it doesn’t effect us at all.

    Like

  7. We bought our current house for well under market value (motivated seller had a job somewhere else and had to give half the proceeds to ex, I believe) so even with the downturn, we’re safe. In fact, every time we see homes listed in our neighbourhood, we look at the price and chortle.
    We’re here for the long-term so owning only makes sense. Rental of a marginally comparable dwelling would cost a lot more, even with taxes included. Vacancy rates are really low, especially for homes that can accommodate pets and a special needs kid who’s too noisy to do well in a highrise.
    On the other hand, had we bought as much house as the mortgage agents suggested we could afford to buy? We’d be in a lot more trouble. People trust their bankers too much when it comes to advice on money matters. In the end, they’re in it for getting you to borrow as much as possible and won’t have to suffer when you’re not able to manage the heavy payments at some point down the line.

    Like

  8. two things about buy/rent:
    1. If you have a mortgage payment to make, and you’re a worker, you can’t take a long strike, or really , you can’t strike at all.
    2. The “best generation” bought their ‘family home’ in the 60’s, and finished paying it off in the 90’s; just in time for the (manipulated) bubble to burst.
    This is why the bankers sing & dance: Ha HA Ha Ho Ho!

    Like

  9. “The “best generation” bought their ‘family home’ in the 60’s, and finished paying it off in the 90’s; just in time for the (manipulated) bubble to burst.”
    It depends. A lot of those people grew up during the Great Depression and were totally debt-phobic and would never have let a mortgage run 30 years. In my family, my grandpa came back from WWII with just about every dime he’d made in the army unspent, married, went to work at a lumber mill and bought a family property with a tiny cottage on it. As their family grew, my grandparents and the kids built a bigger house on the same property. They moved in to a completed house in 1959 that had never had any debt on it, ever, and have rented out the tiny cottage for the past 50 odd years.

    Like

  12. Interestingly, buying a home offers much more security than renting in case of loss of income, etc. While a renter will be out on their ear within weeks if they don’t pay rent, homeowners can quit making house payments and spend literally years in their homes before the foreclosure process catches up to them.
    “In [New Jersey], homeowners in distress have more than 21/2 years, on average, from the time the lender first initiates the process to the time they are forced out of the home.”
    http://articles.chicagotribune.com/2012-02-24/classified/sc-cons-0223-foreclosure-20120224_1_homeowners-and-lenders-foreclosure-delays-foreclosure-process

    Like

Comments are closed.