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Re: Better off renting?
Old 01-30-2006, 05:33 PM   #21
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Re: Better off renting?

One thing about an apartment- you can leave pretty easily if you get some awful neighbors. Not so easy in a house or a condo.

Ha
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Re: Better off renting?
Old 01-30-2006, 06:07 PM   #22
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Re: Better off renting?

True.

Amplified by the more transient nature of condo residents compared to regular single family homes. There are often many rental properties in a condo unit.
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Re: Better off renting?
Old 01-30-2006, 07:23 PM   #23
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Re: Better off renting?

You don't have to move to the middle of nowhere to pay close to $400/month. Here you go, $425 gets you centrally located in DFW: commute to Dallas, major shopping, entertainment, airport, lakes and parks nearby. I looked at this place a while back; at this price your neighbors may not look like the Partridge family, but the area is okay and the buildings were very livable when I saw it.

Google Map of location / Apt. listing

There is a huge multi-community complex a little South of there with probably lower rents, and the place has several pools and a golf course. For some reason (airport?) this area just isn't very favored even though it is close to everything.

Anyhoo, I am going through the same thought process re: rent vs. buy. For my situation buying seems to be throwing away more money and taking away freedom.

Interesting note about comparing an apartment to a house, but in my case I tend to do that because if I'm going to be in a small place and have a neighbor at each wall I'd rather have the mobility and freedom from maintenance hassles. There are other alternatives (townhomes with stone firewalls between units), and I'll be sure to look at them when I pick my next place to live.
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Re: Better off renting?
Old 01-30-2006, 07:47 PM   #24
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Re: Better off renting?

Quote:
Originally Posted by BigMoneyJim
Anyhoo, I am going through the same thought process re: rent vs. buy. For my situation buying seems to be throwing away more money and taking away freedom.

Interesting note about comparing an apartment to a house, but in my case I tend to do that because if I'm going to be in a small place and have a neighbor at each wall I'd rather have the mobility and freedom from maintenance hassles. There are other alternatives (townhomes with stone firewalls between units), and I'll be sure to look at them when I pick my next place to live.
That idea of a stone or concrete party wall sounds very good. Let us know what you are able to find. BTW, are you moving to Dallas?

Sometimes even the layout of a building can give good acoustic isolation. My wife's apartment has only one short stretch of wall in the kitchen and dining area that abuts on another's living space. She has had 4 or 5 neighbors in that apt since she moved there, and she has never really heard any of them.

Another nice thing about apartment living is that*in a nice building you are less vulnerable to burglary relative to a SFH if you like to travel. Add to that the services- an office to accept your parcels, a pool, often a health club, rec room with huge TV, etc. It amounts to a lot of stuff that would be difficult or expensive to duplicate in another environment. And then someone mentioned the women at the pool. Only at a wedding is it easier to meet a woman than at a pool.

Ha
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Re: Better off renting?
Old 01-30-2006, 08:01 PM   #25
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Re: Better off renting?

Quote:
Originally Posted by WRBT
One bedroom, one bath condo in Phoenix. No, I don't know if that's in the hood or not but $400 probably isn't going to get you a beautiful tropical oasis either.

The mortgage on $55k for 30 at 6% is $335. Throw in contents insurance and taxes you still might be coming out under $400. I've no clue how to quantify maintenance costs.

Without weighing in on what's best for anyone (a million variables there) IMO something like that is what should be compared against for the buy/rent decision if one is comfortable with their lifestyle in a small multi-dwelling structure.
Homeowner's dues can be $100-200 in many places. Add that to the condo owner's costs.
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Re: Better off renting?
Old 01-30-2006, 11:13 PM   #26
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Re: Better off renting?

I seriously doubt a $56,000 condo has anywhere near $200 in dues.
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Re: Better off renting?
Old 01-31-2006, 02:28 AM   #27
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Re: Better off renting?

Good to point out the stone wall between units as a desirable feature. My condo has what I think are cinder block wallks between the units and I absolutely never have heard any noise from my next door neighbor in the 8+ years I've lived here.

But the ceiling/floors are not very acoustically protected and I hear the upstairs neighbor all the time even though they try to be quiet.

Noise issues are the one reason I would like to live in a townhome, so I could crank the stereo a bit.
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Re: Better off renting?
Old 01-31-2006, 07:59 AM   #28
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Re: Better off renting?

It's actually interesting that this thread came up. I'm new here, but the wife and I are considering selling our paid for house here in Orlando and renting....

We paid 370K in cash for the house 18 months ago and can conservatively clear 525K if we sell (we wouldn't close until we hit our 2 year mark to avoid cap gains). We tend to move around every 3-4 years anyway (no kids) and so we think renting may be a better way for us to go.

The real kicker for us was sitting down and looking at our budget. We added up property taxes, homeowners insurance, homeowners association, pest control for the house and the lawn (we cut ourselves), maintanence, pool care, termite bond....and we're almost at 2 grand a month! Rentals in this area just have not kept pace with real estate prices and so we're seriously contemplating renting a house. We could easily rent something nice in the 2,000 range.

Throwing the 525K on top of our other investments would push up our retirement date by a good many years. We're 38 and 37 and with our other investments look to have the 3.5 million we'll need by the time we're 58 and 57. Throwing this money into the pile means early 50s.

If and when we finally do decide to settle down, we'll buy something much smaller than we have now (5 bed/3bath...3,000 sq ft). If we thought we were going to stay here for a long time we'd probably sit on the house for awhile. But this market has already cooled off considerably and looks to be flat for a number of years. I'd rather have that 525K sitting with the fine folks at Vanguard than in my home where it won't appreciate much at all. Sometimes...renting is better.
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Re: Better off renting?
Old 01-31-2006, 09:06 AM   #29
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Re: Better off renting?

Quote:
Originally Posted by WRBT
I seriously doubt a $56,000 condo has anywhere near $200 in dues.
That's why I said $100-200. Just depends on the area, the amenities, and the age/condition of the condos. Also depends on how "honest" the Homeowner's association is. All the repairs and periodic upgrades (exterior painting, new roofs every 20 years, repaving the parking lots, etc.) are paid for by unit owners. Some HOA's charge enough in monthly dues to pay for all of this. However, most places seem to wait until these big repairs are necessary, then assess a one-time fee against each unit to pay for the repairs. I paid a little more than $56000 for my condo a five years ago. I bought in a 20 year old development. The HOA dues were only $130/month, but we had an assessment every few years for a few thousand bucks each time. The stucco siding had to be replaced with vinyl siding. Then the roofs had to be replaced. Then the exterior porches and decks had to be sanded and painted and rotten wood replaced. Then there was the time the parking lot had to be repaved, the pool fixed, the stormwater drainage improved, etc. etc. There's always something, and the condo unitowner pays for it one way or the other.

Now, I did have a pool, tennis court, basketball court and clubhouse at my disposal at all times.

My point in noting the HOA dues is that it is a very significant expense relative to your monthly mortgage payment. Then there is the constant flow of special assessments that you have to pay for somehow. It's probably still cheaper to own a condo and share in common expenses than it is to own a house and pay for all the repairs and maintenance items as an individual.

When you compare condo mortgage payments+the unit owner's individual maintenance costs+HOA dues+insurance+taxes+special assessments, my guess is you will be paying significantly more than a comparable individual renting.

The interest payment alone on $56000 is $280/month at 6% interest. Add in that other stuff, and you'll break $400/month pretty quick, regardless of whether you're paying $100 or $200/month for HOA dues.

There are a dozen other factors that affect the rent vs. buy decision that this simple comparison doesn't look at. appreciation, flexibility to move easily, etc.

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Re: Better off renting?
Old 01-31-2006, 09:36 AM   #30
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Re: Better off renting?

Quote:
Originally Posted by HaHa
That idea of a stone or concrete party wall sounds very good. Let us know what you are able to find. BTW, are you moving to Dallas?
I want to move to Dallas/Fort Worth, but I'm stepping carefully because I have worries about the job market.

A friend of mine used to own a 3br 2bath townhome w/2-car carport in Grand Prairie (Dallas); it was on the end so she only had one neighbor, and that wall was stone-and-mortar. (Might've been a facade over cinder blocks, but in any case it was a nice, thick, likely soundproof firewall that separated her from the next unit.) I haven't gone looking for these, but I think I will if/when I get a stable job offer in the D/FW area.
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Re: Better off renting?
Old 01-31-2006, 12:53 PM   #31
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Re: Better off renting?

If you rent, be sure to get renters insurance, even if your stuff isn't worth a whole lot. Rental insuance can get you liability coverage, much like homeowner's insurance does.

I have a friend whose father was in the alzeheimers unit in the nursing home. The father was a big guy and prone to swinging at people. My friend bought rental insurance for his father simply to have the liability coverage if his dad accidently hurt someone.
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Re: Better off renting?
Old 01-31-2006, 01:05 PM   #32
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Re: Better off renting?

Quote:
Originally Posted by Martha
I have a friend whose father was in the alzeheimers unit in the nursing home.* The father was a big guy and prone to swinging at people.* My friend bought rental insurance for his father simply to have the liability coverage if his dad accidently hurt someone.
Slight change of subject, but, an alzeheimers patient shoved my Mom to the floor and broke her hip. My attny said that the patient was under the care and control of the nursing home and the patient couldn't be sued.
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Re: Better off renting?
Old 01-31-2006, 01:22 PM   #33
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Re: Better off renting?

You dont live in the US, now, do you...?
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Re: Better off renting?
Old 01-31-2006, 01:46 PM   #34
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Re: Better off renting?

Quote:
Originally Posted by Martha
If you rent, be sure to get renters insurance, even if your stuff isn't worth a whole lot. Rental insuance can get you liability coverage, much like homeowner's insurance does.
Agree on the rental insurance. I put off getting rental insurance for a long time; mostly procrastination, but I wasn't motivated because I had cheap stuff. When finally filling out the paperwork with the agent I started thinking in terms of replacement costs...it adds up fast. I thought the minimum $15k would be way too much but after thinking how much it would cost to buy new clothes, new furniture, new PCs, new cameras, etc I got the $25k policy. And it's cheap. I haven't given much thought to liability...perhaps I should clean up the sharp broken glass frozen in the ice by my front door...naaaah, I have insurance.
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Re: Better off renting?
Old 01-31-2006, 08:51 PM   #35
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Re: Better off renting?

Quote:
Originally Posted by k-man
We paid 370K in cash for the house 18 months ago and can conservatively clear 525K if we sell (we wouldn't close until we hit our 2 year mark to avoid cap gains). We tend to move around every 3-4 years anyway (no kids) and so we think renting may be a better way for us to go.
Correct me if I'm wrong...but if you move before the 2-out-of-the-last-5-years criteria is satisfied, can't you still get a pro-rata share of the $500k exemption?

So, if you only live there 1 year in the past 5, doesn't the IRS allow you to shelter half of the allowance (which would be $125k/person, or $250k/couple)?
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Re: Better off renting?
Old 01-31-2006, 10:41 PM   #36
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Re: Better off renting?

Quote:
Originally Posted by Martha
If you rent, be sure to get renters insurance, even if your stuff isn't worth a whole lot.* Rental insuance can get you liability coverage, much like homeowner's insurance does.
And it's super cheap. Mine is $6/mo.
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Re: Better off renting?
Old 01-31-2006, 11:42 PM   #37
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Re: Better off renting?

On the 250K/500K housing exemption -- this one is a real gotcha. You can pro-rate the amount of time you have lived there up to 2 years over the past 5 years. But you must have lived there at least 2 years!!!! If you sell after living there 23 months but before 24 months, no tax break, as in zero. My father, a tax preparer, told me that some of his clients were shocked to find this out, but it was too late.

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Re: Better off renting?
Old 02-01-2006, 05:35 AM   #38
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Re: Better off renting?

Quote:
We paid 370K in cash for the house 18 months ago and can conservatively clear 525K if we sell
Are you talking "clear" as in... you can sell for 895k? (prob. not..) but even a gain of 155k over 18mo. is huge! Is this really what the market is like? I mean, Florida.. hurricanes.. wow!

I am a home ownership fan, but if you like to move around anyway.. sounds like you have something to gain and not much to lose.
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Re: Better off renting?
Old 02-01-2006, 10:55 AM   #39
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Re: Better off renting?

ladelfina--According to Bob Villa (bad source I know, but it's what I got) Florida has the most stringent building standards of any state, exactly for hurricanes. According to my Puerto Rican neighbor his house in Puerto Rico is built much better than these. He compared ours to matchsticks. Even with the record breaking 2004 hurricane season where Fl was hit with I think 4 storms the total amount of "scare time" when compared to "ahhh time" was very small. Everwhere has it's bad weather.

AS far as the rent-buy comparasons go I can only speak for myself. I purchased an old rental. So needless to say it was kept up to livable standards nothing more. For routine maintenance I have spent no more than I would if I rented a house. The mortgage payments were about the same as renting and I receive the tax benefeit of property taxes and interest. The way I look at it either way I would spend the same for housing. I am able to write off about 3000-4000 dollars more due to the property tax and interest (that's the amount over my standard deduction). I have sunk about 15,000 into this house to bring it up to modern. Two houses two doors down sold for 30000-45000 more than mine one and two months earlier, becasue they were in good condition.

The other thing I look at when deciding to rent or buyer is past rents. Your in your 20's. I'm too lazy to look back but I thought you said you were 26? Figuring your going to rent for 40-50 years, what have rents done in the past 40-50 year period? The short end 40 years ago was 1966. I wasn't alive then, but some of the older people might be able to say what the rent on a decent place was back then. I can't imagine it was more then 100-200 dollars. So I assumme your place is decent the next forty years your rent would would double to quadruple. If I stay in my current house that long my property tax will be about $500 per month, less than you will be paying for rent.

In my opinion rents will start rising when the housing market slows down a little more. Right now money is easy to find to buy a house. When it becomes tougher to buy, less people will be buying and more will be renting causing upward pressure on rents.
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Re: Better off renting?
Old 02-01-2006, 11:46 AM   #40
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Re: Better off renting?

Quote:
Originally Posted by lets-retire



The other thing I look at when deciding to rent or buyer is past rents.* Your in your 20's.* I'm too lazy to look back but I thought you said you were 26?* Figuring your going to rent for 40-50 years, what have rents done in the past 40-50 year period?* The short end 40 years ago was 1966.* I wasn't alive then, but some of the older people might be able to say what the rent on a decent place was back then.* I can't imagine it was more then 100-200 dollars.*
Lets Retire: My wife and I started out our married life in 1963 with a two bedroom furnished apt. (I'd still be young if I were a tree) Rent was $50.00 a month.

We both wanted children, so we started looking for a place to buy. Found one we liked, that had an assumable loan, but had to come up with $1300.00 that we didn't have. The owner
allowed me to sign a note for the $l300.00. (A trusting soul, that I didn't let down).

The house cost was $14,750.

The house recently sold, (Not by me, that was 5 houses ago) for $300,000.

The rent for the apt. (no longer furnished), is $l200.00 a month.

Draw your own conclusions.

Jarhead





















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