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Old 05-19-2011, 07:28 AM   #121
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It depends on your circumstances amd the local market. I think that over the very long term (decade plus) it is likely that renting is moderately more expensive than owning, but of course there is a range.

We put down under 20k on our first home in 1998 and the monthly carry at the time was less than rent. When we bought our current home we used some of the proceeds from the old place as a downpayment and pocketed another 60k. We will do similar in the next move, although most of what we pocket is due to aggressive mortgage paydown over the past 9 years. The next place will have after tax carry costs less than rent, plus I get to choose what I do with the property and for how long. The control aspect is what I value most at this point, and I would be willing to pay up for it over renting if I had to.
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Old 05-19-2011, 08:20 AM   #122
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The control aspect is what I value most at this point, and I would be willing to pay up for it over renting if I had to.
We feel the same way. Over the years, we've rented and (currently) own, and I can see the day (before we're carted off to the old age home) that we will be back into a rental.

That's the possible future. As of today, we perfer owning. I guess for us it's an "investment in lifestyle" over possible financial return...
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Old 05-19-2011, 11:03 AM   #123
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I agree with the least few posters. Some people like renting, some like buying. Some people like dating, others like marriage. Even for people who generally prefer dating, there may be times and circumstances when it seems prudent to get married, and vice versa.

Few things are beyond the particular, even health which seems to be a pure good may not always be. Would you rather be healthy or have a broken leg when the king's conscriptors come around looking for cannon fodder?

Control is often put forward as a benefit of owning. But one might ask, control of what? Is it more important that you be able to nail up a picture or paint your kitchen lilac, or that you be able to easily move if the neighborhood changes, or you fall in love with someone across the country or get offered a much better job far from your owned and perhaps hard to sell house?

Different people would answer this differently. I got my fill of painting a long time ago, and Home Despot makes me puke.

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Old 05-19-2011, 01:09 PM   #124
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My sister was happlily ensconced in a rental house in Shell Beach, CA for many years -- until the landlords decided they wanted to to take the house back so that an adult child could occupy it. They gave my sister 2 months notice. Her entire life was turned upside down. Uncertainty is a big factor when you rent -- and lack of control. In addition, I find it difficult to find rental units that have character and space for a garden. On the other hand, some respected commentators expect home prices to fall another 20 percent (see, e.g., Still Home Sick | John Mauldin | Safehaven.com). And, my own personal concern is that as interest rates inevitable increase, increasing rates will tend to stiffle any price appreciation that we might otherwise see going forward. "Rent vs. Buy" is, indeed, a tough choice for the foreseeable future. I tip back and forth between renting vs. buying as my wife and I try to decide where to live in retirement. We're currently leaning toward buying . . . but, the right rental unit could tilt our decision.
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Old 05-19-2011, 01:13 PM   #125
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Control is often put forward as a benefit of owning. But one might ask, control of what? Is it more important that you be able to nail up a picture or paint your kitchen lilac, or that you be able to easily move if the neighborhood changes, or you fall in love with someone across the country or get offered a much better job far from your owned and perhaps hard to sell house? Ha
OK Ha who is the lucky person? Either the object of your love interest, or your new boss?

It is apparent to me that the true cost of pet ownership is much higher than food and vet bills. Golly now they have to justify the added burden of home ownership. Including the trips to HD or Lowes every Saturday?

Of course I rationalized those trips and the subsequent work as being theraputic. It was not until I rented that I realized that a trip to the park was much preferred to a trip to Lowes on Saturday.

We own in Mexico where all maintenance is outsourced for pennies. The cost of cleaning the paint brush is outweighed by the price of outsourcing the entire job (Same as in San Diego).

In Vancouver or 5 months, we rent and put up with the landlord. I relate it to my experience with the corporate bureaucracy. I can make them do it. It just takes time and leverage. Kind of a game I know I can win but would rather not play anymore. Then I look at what I am saving every month and justify it. I think those landlords must be scratching their heads, trying to make money in these times!
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Old 05-19-2011, 01:24 PM   #126
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People sometimes talk about renting vs buying as though it was a purely financial/investment decision, and for them probably it is.


But for me, the purpose of investing is to make money so that I can buy what I want in life. And although I don't want much, I want (and have) a house.

Someone who doesn't feel that way about owning a house probably wouldn't get the satisfaction out of it that I do, and that weights the decision in the direction of renting more than buying for them.
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Old 05-19-2011, 05:04 PM   #127
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In Vancouver or 5 months, we rent and put up with the landlord. I relate it to my experience with the corporate bureaucracy. I can make them do it. It just takes time and leverage. Kind of a game I know I can win but would rather not play anymore. Then I look at what I am saving every month and justify it. I think those landlords must be scratching their heads, trying to make money in these times!
Buying property in Vancouver as a rental is ridiculous. Home prices there are so inflated that it would almost inevitably be cash flow negative. The only justification is in accumulation of equity over time. This is fine provided that the bubble doesn't burst..... which it will eventually. When people who would be wealthy anywhere else cannot afford to buy a house, something is wrong. How many more Chinese gazillionaires can there be?

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Old 05-19-2011, 08:01 PM   #128
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People sometimes talk about renting vs buying as though it was a purely financial/investment decision, and for them probably it is.


But for me, the purpose of investing is to make money so that I can buy what I want in life. And although I don't want much, I want (and have) a house.

Someone who doesn't feel that way about owning a house probably wouldn't get the satisfaction out of it that I do, and that weights the decision in the direction of renting more than buying for them.

I agree completely. As I get older, my home has become a place of refuge and comfort. If I own a home again, I can imagine that growing older there will be a real pleasure. Renting as an older person can be scary when the landlord can tell you at any time that he is selling his property and you have to find a new home.
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Old 05-19-2011, 09:33 PM   #129
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I agree completely. As I get older, my home has become a place of refuge and comfort. If I own a home again, I can imagine that growing older there will be a real pleasure. Renting as an older person can be scary when the landlord can tell you at any time that he is selling his property and you have to find a new home.
If you have a lease, then you shouldn't worry that you may have to unexpectedly go find a new home before the lease expires. If you have a month-to-month, then you should figure in the possibility that you'll be notified to leave in a month or two, and not pretend to be so surprised and "scared."

On the other hand, although you may have imagined that being a homeowner or a landlord would be "a real pleasure," you might find instead that your neighbor is from hell, with you feeling that you can't sell your home and move elsewhere without incurring a huge financial loss; or your tenant suddenly leaves you with costly damage/expenses.

It's all relative, being a renter or "home" owner, ain't it?
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Old 05-20-2011, 10:02 PM   #130
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Homes have an investment value and a lifestyle value. We purchased our current home almost (6) years ago with FIRE in mind. It has dramatically dropped in value as far as it being an investment is concerned, but its lifestyle value is priceless. Since we weren't/aren't planning on selling or going anywhere any time soon - it's all good.
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Old 05-21-2011, 02:40 AM   #131
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People sometimes talk about renting vs buying as though it was a purely financial/investment decision, and for them probably it is.


But for me, the purpose of investing is to make money so that I can buy what I want in life. And although I don't want much, I want (and have) a house.
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Homes have an investment value and a lifestyle value. We purchased our current home almost (6) years ago with FIRE in mind. It has dramatically dropped in value as far as it being an investment is concerned, but its lifestyle value is priceless. Since we weren't/aren't planning on selling or going anywhere any time soon - it's all good.
You are both right. For a large number of American the lifestyle value (control, security, pride of ownership) is worth a lot certainly hundreds and for some thousands a dollars/month. For a smaller number the freedom, and lack of hassles associated with renting is worth a similar amount of money. There is also a large number of us in the middle, since I see pro and cons to both.

I see the value in attempting to quantify the investment value of house. So for instance the person and that is pretty confident that they will be relocated in 5 or 6 years, can say I think buying will cost me $100-$400/month over this time, but it is worth to me or no it isn't and rather the money for something else.

I think my main point is that investment value of house has dropped dramatically over the last few years. In the past a lot of that value was based on fear and greed. Fear in that if I don't buy now it will just be more expensive next year and I'll be stuck being a renter my entire live, and greed I'll buy the house now for $500K and selling for a $1 million in a few years and fund my retirement/life style.

Now days the greed value of home buying is very low, and the fear value is a negative. The guy who is concerned about his job, is very reluctant to put most of his life saving of $40,000 down on a $200,000 house, cause he fears if loses his job and the house goes down he'll lose his life saving or worse.
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Old 05-21-2011, 07:38 AM   #132
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It is a good idea to weigh your options and think about it.

I am not sure there many universal rules... because there are many variables.

However, there is one consideration that i believe is very important. Do not get caught up in the "I have to have a big impressive house" trap! It is just an ongoing expense. Buy no more than you reasonably think you will need. Obviously one should consider the eventual resale of the house and buy one that will be marketable... But over doing the house is just a money drain!
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Old 05-21-2011, 08:11 AM   #133
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Do not get caught up in the "I have to have a big impressive house" trap!
I agree. One must recognize if they are buying/building according to their desires, or those of their friends/family/or the general public.

I/DW have nobody to "impress" but ourselves. Over the years (we're on our 4th home, in 40+ years) we bought/built to our desires - not to impress anybody...

As an often quite quote I use (and the title of a book) - "What you think of me is none of my business"...
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