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Old 08-20-2007, 03:12 PM   #21
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how much is it worth to you to not have to deal with a landlord? To not have to ask to paint a room? To be told that next month the rent goes up? Or that they want to lay new carpet so please have all you stuff moved to a different room by thus and such a date?

I can't pin a number on it, but frankly, I hate dealing with landlords, so even if renting and buying were ultimately worth the same, I'd buy.
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Old 08-20-2007, 03:36 PM   #22
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As a newcomer, just join the proud home owner family for one week, I have to say, the monthly bill makes me sick.

Renting makes more sense if only considering numbers, at least in the north NJ.
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Old 08-20-2007, 04:06 PM   #23
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after i read about the pension thing in NJ i told my wife that there is no way i'm moving there
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Old 08-20-2007, 04:11 PM   #24
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In fact, the property tax is the killer. About half block away, they just finished a huge house. Guess what's the property tax, 31k!!!
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Old 08-20-2007, 04:34 PM   #25
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In fact, the property tax is the killer. About half block away, they just finished a huge house. Guess what's the property tax, 31k!!!
Yup, and if the family that bought that house gets trapped by the AMT, they lose the property tax deduction.
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Old 08-20-2007, 04:43 PM   #26
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for the last 13 or so years i've enjoyed the stability of owning a house. it gave me something to do. i bought a fixerupper in crack town and it is now a lovely home surrounded by amazing & extensive gardens which i enjoyed planting, all smack in the middle of what has become one of the more desireable areas of town, minutes to great beaches and a vibrant downtown.

but what once gave me stability now holds me back. the garden i used to love to work in with my wolfpuppy by my side is just a cemetery for his bones. the area has become so successful that it has lost the low-key appeal which originally attracted me here. while i enjoyed modernizing the house, i am not enjoying the upkeep. where the house used to give me things to do, it is now keeping me from doing other things i'd rather be doing.

unless my thinking changes between now and then, when the market turns i'll be turning over the keys to the next homeowner. it's a vagabond life of rent for me.
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Old 08-20-2007, 06:41 PM   #27
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I've always loved owning a house but now I have to say the flexibility of renting does appeal to me .
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Old 08-20-2007, 07:18 PM   #28
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I can only speak for myself. I don't think that renting is a smart financial move for me in ER. I plan to live in a paid off house and so housing will not be a worry for me on a limited retirement budget, no matter what happens with the market or inflation.

Non-financial aspects matter too. It could be freeing to be able to move on a whim, and if I were extremely wealthy I might consider renting.
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Old 08-21-2007, 03:53 AM   #29
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The reason I asked was that I saw a few posts where people had mentioned renting being a better approach.

My preference is home ownership. Conventional wisdom seems to be that home ownership is the best approach financially.

Thanks.
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Old 08-21-2007, 04:46 AM   #30
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I could call the landlord whenever anything doesn't suit and act really stupid and helpless.

bosco
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how much is it worth to you to not have to deal with a landlord? To not have to ask to paint a room? To be told that next month the rent goes up? Or that they want to lay new carpet so please have all you stuff moved to a different room by thus and such a date?


If I remember right, Trombone Al gave some very good pointers on what to do if one is going to rent rather than purchase a home. He mentioned something to the effect that he paid for his rent in 6 month blocks or a year at a time, made small repairs himself, etc. and made an agreement with the landlord to stay for a long period of time like 1-3 years. This worked out well for both him and the landlord. I liked his ideas quite a bit. Made sense to me...

I have not ever had problems with landlords... I think it may have to do with building a relationship with them that is trustworthy on both sides. They want uninterrupted cash flow, and I wanted a stable place to live.

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In fact, the property tax is the killer. About half block away, they just finished a huge house. Guess what's the property tax, 31k!!!
That's a lotta money to be paying -- plus the mortgage itself, repairs and all... whew. We live for a whole year on less than that. (see Priceless Retirement http://www.retireearlylifestyle.com/motley_fool_article_6.htm )
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but what once gave me stability now holds me back. the garden i used to love to work in with my wolfpuppy by my side is just a cemetery for his bones. the area has become so successful that it has lost the low-key appeal which originally attracted me here. while i enjoyed modernizing the house, i am not enjoying the upkeep. where the house used to give me things to do, it is now keeping me from doing other things i'd rather be doing.


I hear you there, LG4N. I think times change and depending on one's needs.... Maybe your needs have changed now.

Be well,

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Old 08-21-2007, 12:11 PM   #31
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I would rent in my area starting 2005/2006.
But as someone said, I don't want to deal with the hassle the family would have to put up by renting.

I may also add, if you rent, choose your landlord wisely.

Landlord would be happy to have a tenant that behaves well, pay on time, stay for 2-3 years.
That way, both landlord and tenant can ride out this down turn and provide benefit to each other. Tenant gets a reasonable rent and can save money. Landlord gets posit cash flow and stability.
When the market works off the inventory and start to recover in a few, tenant buys a home and landlord can sell the property to capture the gains.

That works for me.
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Old 08-21-2007, 12:27 PM   #32
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I have not ever had problems with landlords... I think it may have to do with building a relationship with them that is trustworthy on both sides. They want uninterrupted cash flow, and I wanted a stable place to live.
Yes, this has been my experience as well. However, it becomes another set of variables to deal with--I have to find a "compatible" landlord. In other words, I have to enter into a "relationship" and relationships take energy.

I'm not saying renting is good or bad, merely that I've noticed that I derive a measure of comfort in not having to nurture a relationship with my landlord. If he/she comes over, even if only to be a nice guy and bring me a 6-pack of beer, I don't have to fret that I don't have the house picked up at the moment.

On the other hand, it can be a source of comfort to make a phone call when the water heater leaks rather than going to the hardware store.

I guess to a certain extent it's about knowing oneself. It's a decision that has elements that go beyond mere finances.
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Old 08-21-2007, 12:27 PM   #33
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We have rented our penthouse for 10 years after an exhaustive search for a suitable purchase. During that time, the property has appreciated to $2.1 million but is only costing $40k/yr so renting is actually reducing our SWR by over $40k/yr (by freeing up that extra $1.1 million to generate income). YMMV
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Old 08-21-2007, 01:03 PM   #34
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I've always wanted to live on a beach for a year or two .The cost to do that would be riduculous after the inflated prices and the taxes and the insurance but now that there is a glut of beachfront properties renting looks good and much more affordable than buying . I would rent while the money from the sale of my old house gains interest and I'd still be ahead.
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Old 08-21-2007, 01:26 PM   #35
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In my situations renting has always been the losing proposition and the longest I've stayed in one spot has been 4 years. With that said I was fortunately to have to sell only when the market was strong. I must add that my current house is the newest one I've purchased and it was 3.5 years old when I purchased it. Just about all of the other houses I've bought have been fixer uppers and I walked away with a good profit from all of them. The monthly costs for each of my other houses, including the cost to fix, was less than it would have cost me to rent a similar house. Currently if I were to rent my house instead of buying it I would be paying an extra $100.00 per month.

I fall on the buying is better side. Of course if I had the freedom to travel and not work so much I would definitely look at seriously renting, both my house and furniture.
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Old 08-21-2007, 01:50 PM   #36
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For me it is not a financial decision but an emotional one. I prefer the security of ownership. That's just the way I am. I don't lease cars either, I buy them.
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Old 08-21-2007, 11:12 PM   #37
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I greatly favor people renting rather than buying. Even if that means, like today, i have to go out and replace a toilet flapper and two t-stats on an under-counter water heater. And field phone calls and emails and meet with 3 different potential renters. And have to meet a couple more tomorrow as well as get the window installers going on the 5-plex. As long as it means frequent trips to the teller window to make deposits i'm a strong proponent of renting rather than buying. Unless someone wants a 7-unit..... then i'll happily sing the praises of ownership.

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Old 08-21-2007, 11:27 PM   #38
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It can be

It is a matter of local growth (increasing demand), congestion (limited supply), leverage (multiplying return), initial price (vs rent, a matter of timing), taxes (higher deductibility), and inflation (working for owners and against renters), but transaction costs require extended stays and limit movement flexibility. Usually renting starts cheaper but ends up more expensive, but breakeven can be very long when initially much cheaper. Real returns can be expected to be zero in the country, bond like in cities (pop 1MM), and stock like in metros (pop 10MM), but stock like returns come with volatility. The price is an indication of the return you can expect, higher prices, higher returns, but currently very high prices suggest low returns most places. If you want to live in desirable area permanently, you will generally have to buy because rents rise faster than incomes (the definition of desirable) and it becomes difficult to stay. More than anything else it is a lifestyle decision though.
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Old 08-21-2007, 11:51 PM   #39
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I have owned for 26 years now, my current house for almost 20 years. Financially
I would have been far ahead by renting and investing, but owning was not a financial
decision for me. I have had dogs most of my life, and no rental in Los Angeles
would have allowed me to own 3-4 dogs of 50 - 100+ lbs each.
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Old 08-22-2007, 12:25 AM   #40
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You have owned in LA since 1981, and even with the great appreciation you have had you feel that renting would have left you with more money?

This seems like a very strong argument for renting!

Ha
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