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Old 05-30-2010, 11:48 AM   #21
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Would anyone else consider renting as a lifestyle choice?
Yes; most rentals don't have enough "Frisbee room" for our Shelties (and we do not have any "dog parks" in our immedate area).

Nor do they have "separation of living" as I/wife desire, with at least 100 ft between us any any "neighbors".

Again, it's you defination of "acceptable life style/situation".

At this time of our lives, your situation (good for you) is not what we desire....
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Old 05-30-2010, 11:51 AM   #22
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We just rented an apartment in a failed condo conversion project. Nice old 1960s apartments, but minimal trendy cosmetic conversion and originally priced at a steep premium.

We looked at this complex more than a year ago, left shaking our heads in disbelief, and decided that the market was too hot and to rent a while longer.

Now we are renting in the same complex. Go figure.

Between then and now the developer and bank went bust, lawsuits flew, and the still unconverted condos sold for pennies on the dollar.

But the point is, we surprised ourselves in that a place we found unacceptable to buy seemed just fine to rent. I wouldn't want to be locked in there by a purchase, but living there for a year or so seems OK.

The decision process for renting is nothing like for buying.

Not sorry that we "missed" the firesale either. We would never be brave enough to purchase in such a troubled complex. Now that the dust has settled, prices are skyrocketing again.
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Old 05-30-2010, 11:53 AM   #23
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I inherited some houses which I rent out. I do NOT like being a landlord and to be honest have actually had pretty good tenants so far. I can't imagine how I would feel about it if I had problem tenants. I have a feeling I would simply let the property set and rot before dealing with it.

I also don't like being a homeowner. I am NOT a house person and I don't like yard work. I would be perfectly fine in a very small home on a very small lot or an apartment building. I can't imagine ever choosing to buy a house. I want my money where I can get to it if I want it, not sitting around with a for sale sign for months or years while I continue to pay property taxes and insurance on something I don't want.

I have seriously considered using a management company but the thought of all those fees just bothers me. Most of the ones here locally want several hundred dollars start up fee, several hundred each time they find a new tenant, and 10% a month.

Anybody want to buy a couple houses.... cheap?
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Old 05-30-2010, 12:01 PM   #24
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Nor do they have "separation of living" as I/wife desire, with at least 100 ft between us any any "neighbors".

I can't think of any urban area, or even suburb, where this might be found. It would likely take living in the country, would it not?

Ha
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Old 05-30-2010, 12:08 PM   #25
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....
The decision process for renting is nothing like for buying....
Congratulations on making a decision, IP, and finding a new residence. Let us know how it goes.
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Old 05-30-2010, 12:26 PM   #26
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I can't think of any urban area, or even suburb, where this might be found. It would likely take living in the country, would it not?

Ha
Not at all. Eastern PA (mid-Atlantic) about 90 miles West of NYC, 50 miles North of Phila.

If you want to call it country? It depends on your reference (I was stationed in west Texas, where your next door neighbor was in the next county).

Let's just say that's in excess of an acre, the closest bus stop is about a mile away, and the local shopping district in the same vicinity.

If you consider that country, so be it…
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Old 05-30-2010, 01:36 PM   #27
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Not at all. Eastern PA (mid-Atlantic) about 90 miles West of NYC, 50 miles North of Phila.

If you want to call it country? It depends on your reference (I was stationed in west Texas, where your next door neighbor was in the next county).

Let's just say that's in excess of an acre, the closest bus stop is about a mile away, and the local shopping district in the same vicinity.

If you consider that country, so be it…
I am not criticizng it, just asking. If you were smack dab in thé middle of a typical 2.5 acre plot, 330' by 330' you could guarantee the required separation without any similar strategies from the presumably equally neighbor-averse nearby houses. Slightly smaller might do, unless of course soil conditions, esthetics or other considerations did not allow you to build in the very center of the plot. Anyway, if you are happy, I am happy.

Ha
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Old 05-30-2010, 03:19 PM   #28
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For some of the same reasons that I aspire to FI and not being dependent on continued employment, I prefer to own and not be dependent on my landlord or their issues in order to continue to live in my "own" place. YMMV.
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Old 05-30-2010, 04:12 PM   #29
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I do NOT recommend being an absentee landlord, especially from overseas. If you want to invest in real estate from a distance, I recommend an REIT index fund such as Vanguard's. It is also more liquid than actual property.

Renting gives you a lot of mobility. You can do some exploring in retirement. You may change your mind about where you want to be between now and then.
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Old 05-31-2010, 01:10 AM   #30
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Certainly it depends on where you live but there are such good deals out there now and interest rates are so low you would be hard pressed to find a better time to buy a house then now. You can get a nice 3BR house in the Phoenix area for $125k, that would have gone for $300k a few years ago. Many other hard pressed areas have similar deals. You could lock yourself in to a $650/month mortgage for 30 years and gain some equity or pay rent money for the rest of your life. You would be hard pressed to find a place to rent for that today, one can only imagine what you'll be paying in rent 30 years from now.
How do you know if the prices are not going down even more?
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Old 05-31-2010, 03:05 AM   #31
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they have both suggested renting instead of owning, and that the stock market (index funds) is a much better place to put your money.
...
...
How did you guys make the decision to rent or buy?
I retired at 54 never having owned a house. Still don't.

There were several times in Southern California when my assets, income, and house prices meant that I could afford a house where I wanted to live but chose not to, because:

1) I couldn't get past putting most of my eggs in one basket.

2) I'm was a software developer who changed jobs about every 3 years. I HATE commuting so that meant I moved a lot.

3) I saw my friends donig too much of their time on house maintenance.

So, I rented, chose a life style that meant there was money left over at the end of the month and invested it right through the biggest bull market in US history. Yes, I'm enjoying my stay in Southern Thailand.
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Old 05-31-2010, 09:16 AM   #32
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How do you know if the prices are not going down even more?
I don't know anyone who can accurately predict what the bottom will be but the prices (in Phoenix) are already well below what it would cost to build/replace a house and with interest rates as low as they are there are a lot of good deals out there.
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Old 05-31-2010, 12:26 PM   #33
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I don't know anyone who can accurately predict what the bottom will be but the prices (in Phoenix) are already well below what it would cost to build/replace a house and with interest rates as low as they are there are a lot of good deals out there.
Thank you zinger. The reason I asked was because many think another wave has already started...

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Old 05-31-2010, 01:17 PM   #34
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An advantage of owning is the matching of liabilities to assets. If you put the money in the stock-market, it's unlikely stock market monthly returns will match the rent you need to pay.

Edit: how much this matters depends on the cost of housing as a proportion of overall expenses. For me, about two thirds of the minimum income I could live on is the cost of housing. So having a paid for house, I reduce by two thirds the proportion of my "income" that is susceptible to a bad sequence of returns.

The matching isn't perfect, since a home should outlast the owner by a lot. So I guess a transition to renting (with the capital going into an annuity to fund the rent) when life expectancy is short might make sense, from a strictly financial point of view. The annuity/rent combination might make sense over 5-15 years, ownership makes more sense when life expectancy is 50 years. The stock-market/rent combo probably only makes financial sense if housing costs are relatively insignificant proportion of total costs. (In that case it's not necessarily better, it's just that it probably doesn't matter what you do.)

To achieve similar matching effects, I sometimes have a fantasy that the electricity generator will raise capital for a nuclear power station that pays dividends in kilowatt-hours for 50 years, or the water company for a dam with payments in water. But water and electricity are relatively insignificant expenses, so buying a life-time supply doesn't make sense.
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Old 05-31-2010, 01:51 PM   #35
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An advantage of owning is the matching of liabilities to assets. If you put the money in the stock-market, it's unlikely stock market monthly returns will match the rent you need to pay.
From my POV this is the strongest financial argument for owning.

Ha
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Old 05-31-2010, 02:06 PM   #36
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Agreed.
I believe the rule of thumb is to not pay more than 15 or 16 times annual rent for an equivalent house or condo. That works out to a 6.7% return. I don't know about you guys, but my portfolio isn't returning that much.
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Old 06-01-2010, 04:08 PM   #37
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Let's face it. Owning is an emotional decision. There are lots of spreadsheets around to justify it (or not). But in the final analysis, it is emotional. That is how realtors make their money year in and year out.
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