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Re: Housing: Rent vs. Buy
Old 01-04-2005, 06:10 PM   #21
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Re: Housing: Rent vs. Buy

You cant make this decision without a lot of data.

If you cant or dont want to keep up a property, rent. If you have a boatload of pets, you might have to buy. If you move all the time, rent. If you live in an area where real estate appreciates, buy. If you live in an area with a lot of hurricanes and earthquakes, rent.

Heres a fun one though...in some areas around here in No. Cal, real estate prices are through the roof, but rents are crazy good. Lots of apartments have been built, and nobody will pay a rent commensurate with the cost of a home. So you can rent pretty cheap. If I hadnt just spent the last year and a half moving two homes and consolidating them, I might have the energy to consider finding a ranch to rent and stepping out the homeownership business.

All that having been said, I've made almost as much money on real estate as I have on investments. And it was a lot easier.
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Re: Housing: Rent vs. Buy
Old 01-05-2005, 09:59 AM   #22
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Re: Housing: Rent vs. Buy

Quote:
In my experience - always better to buy than rent. *I'm on my 3rd property now, and I have made money on each. *Renting just seems like throwing away money to me. When I do spend money on the house, I feel like I will be getting that money back in some capacity.
Just curious, GCD-- how long is your experience? Does it extend back to the busts of the 1970s & 1980s? I'm not saying that you're right or wrong, but "getting that money back in some capacity" can turn the most optimistic owner into an ultra-long-term investor. Renting may be throwing away money compared to living under a freeway overpass, but occasionally renting is a lot cheaper than waiting for your home's value to exceed your mortgage balance.

Quote:
Maui Hawaii. [...] If the prices have been skyrocketing (like here) while the rents and salaries and job opportunities have been steady, I'd be very wary of buying if my time horizon was only 1-3 years.
JohnBlake, when I read articles like this one, I wonder if it's time to call the top. http://starbulletin.com/2005/01/05/news/story1.html
Of course all bets are off if Oprah decides to buy the rest of Maui...
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Re: Housing: Rent vs. Buy
Old 01-05-2005, 10:37 AM   #23
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Re: Housing: Rent vs. Buy

Hi Nords. My owning has only gone back to 1999 (I'm 31). I think it's all about making smart decisions in smart locations. Owned a condo in Seattle that did well (mortgage was only $675 a month - actually cheaper than renting, yet made money when I sold). Second house was a somewhat fixer upper in a desirable downtown suburb here in Orlando. Now a rental with the equity up about $50,000 in 2 years. Third and current house a deal I found downtown that appraised for $20,000 more than what I purchased it for. I will say buying is better than renting if it's a smart financial decision to do so.
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Re: Housing: Rent vs. Buy
Old 01-05-2005, 11:03 AM   #24
 
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Re: Housing: Rent vs. Buy

When I was an active real estate investor, I would frequently see properties for sale which I could see
at a glance could never produce a positive cash flow,
if purchased anywhere near the asking price. On those,
I just moved on. When I found a property which did cash flow (and met other requirements of course)
I would shoot the seller a lowball offer. I had to look a
long time and make a lot of offers before I closed a deal.
But, when I did buy, the deal was pretty much bullet proof. In fact, I never lost any money worth mentioning
in over 30 years of owning all sorts of real estate.

JG
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Re: Housing: Rent vs. Buy
Old 01-05-2005, 03:08 PM   #25
 
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Re: Housing: Rent vs. Buy

Quote:
JohnBlake, when I read articles like this one, I wonder if it's time to call the top. http://starbulletin.com/2005/01/05/news/story1.html
Of course all bets are off if Oprah decides to buy the rest of Maui...
I know, I know.... and I'm really not trying to 'call the top'.
I'm just trying to find a nice place to live, without roosters hawking next to my bedroom window, and without ice dealers in the adjacent homes. When I compare the costs vs. my rent (with none of the above), it's not even close. I agree that prices could still rise, but I don't have much faith in these articles. For example, if I went back to work, I think I could earn at least 50% more working in San Diego, LA, or the Bay Area, over Maui. These articles are typically written by, or heavily quoted by people in the real estate industry. They have an incentive to move as much property as fast as possible. They'll rarely say wait, prices are likely to fall. It's always hurry up and buy now, prices will only go higher.
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Re: Housing: Rent vs. Buy
Old 01-05-2005, 05:19 PM   #26
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Re: Housing: Rent vs. Buy

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Second house was a somewhat fixer upper in a desirable downtown suburb here in Orlando. *Now a rental with the equity up about $50,000 in 2 years. *Third and current house a deal I found downtown that appraised for $20,000 more than what I purchased it for. *I will say buying is better than renting if it's a smart financial decision to do so.
We did the DisneyWorld deathmarch a couple months ago and were astounded at all the cheap real estate. (We kept looking for the missing zero in the prices.) For the cost of the park passes & lodging we joked about putting a downpayment on a condo and renting it out when we left.

I think the state bird should be the building crane-- with all the construction it's way too easy to overbuild and crash. I'm impressed that you're making money in Orlando; the hurricane insurance alone would push the cash flow into the red!
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Re: Housing: Rent vs. Buy
Old 01-05-2005, 05:54 PM   #27
 
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Re: Housing: Rent vs. Buy

I've been a few places where I kept "looking for the
missing zero in the price also". I often wound up buying. Never regretted it either.

DW and I were talking about our next Florida trip this
morning, Couldn't agree on where to go and/or what to do there. I told her we could do whatever she wanted
as long as I was there for BIKE WEEK and we didn't
go to Disney World, BTW, I started a thread about
the "best times of your life, other than ER". The worst
"vacations" of my life may well have been to Disney
World. Yet, I knew people who would go back year after
year. I don't get it.

JG
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Re: Housing: Rent vs. Buy
Old 01-05-2005, 06:27 PM   #28
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Re: Housing: Rent vs. Buy

Quote:
The worst
"vacations" of my life may well have been to Disney
World. Yet, I knew people who would go back year after
year. I don't get it.
I don't about going back but I visited Disney's Epcot Center about 20 years ago and enjoyed it a lot. I especially loved Space Mountain which was my first rollercoaster ride ever.

MJ
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Re: Housing: Rent vs. Buy
Old 01-06-2005, 02:28 AM   #29
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Re: Housing: Rent vs. Buy

We just got bacl from WDW about 6 weeks ago..we loved it, but then again I still have 4 small kids at home so your perspective is very different. When you see it thru kids eyes its very different; I try and leave my cynical side at home....

Anyway, WDW was great, but we rented a house in Kissimmee (a nice 5bd house w/pool) for about $100 day. Cheaper than a 2 really cheap hotel rooms. The house was great, but kissimmee itself is got to be one of the most disgusting, overbuilt excuses for a city I have ever stayed at...zoning gone truly wild...and the roads/highways are horrible (the worst in the country I believe for safety).

I'd shoot myself before I would retire to Florida if the rest of it is anything like Kissimmee....
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Re: Housing: Rent vs. Buy
Old 01-06-2005, 03:00 AM   #30
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Re: Housing: Rent vs. Buy

BigMoneyJim,

Echoing Scott Adams, You should buy a house if you want to live in a house. Its a fun debate about which makes the most financial sense. From your post it sounds like you're like me on these lifechanging decisions...overanalysis paryalsis. You probably have visited the DFW area and likely get a couple of area newspapers delivered to you in Indy.

You know how you like to live. Pick a place that suits your lifestyle and allows you the comfort you need to deal with the rest of life. Same with underwear

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Re: Housing: Rent vs. Buy
Old 01-06-2005, 05:41 AM   #31
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Re: Housing: Rent vs. Buy

I stay as far away from Disney and Kissimmee as humanly possible :-)

LOVE Bikeweek - what a riot. Going this year for sure!

Yes - Orlando is building up like crazy.....$300k - $1m condos going up everywhere. My concern with those is that the salaries here in Orlando can't support the cost. Salaries here are pretty low. But they are selling like mad.
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Re: Housing: Rent vs. Buy
Old 01-06-2005, 05:54 AM   #32
 
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Re: Housing: Rent vs. Buy

Well, we have some concensus on avoiding Kissimmee

I want to assure farmerEd that the whole state of Florida is not like Kissimmee. In fact, parts of it actually
remind me of my fav. northern state (Michigan), without
the awful winters of course. There were four reasons
we opted for northern Texas instead of Florida for
our southern base:

I lived there previously.
Less humid
Less buggy
Less populous

JG
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Re: Housing: Rent vs. Buy
Old 01-09-2005, 12:12 PM   #33
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Re: Housing: Rent vs. Buy

Jg,
You hit the bullseye... My wife wants to visit FL as a possible deep south half-year home. I said fine as long as we can avoid:

1. Big BUGS
2. CROWDS
3. Hi HUMIDITY

I think we need to pick another state (TX?)

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Re: Housing: Rent vs. Buy
Old 01-09-2005, 12:39 PM   #34
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Re: Housing: Rent vs. Buy

Quote:
Jg,
You hit the bullseye... My wife wants to visit FL as a possible deep south half-year home. I said fine as long as we can avoid:

1. Big BUGS
2. CROWDS
3. Hi HUMIDITY

I think we need to pick another state (TX?)

BUM
I'm with you on all three, BUM. A word to the wise...avoid Houston.(and the gulf coast in general) It has all three of your things to avoid, in abundance! The phrase 'living h*ll' comes to mind. The same could be said for Dallas though less humid. Central, or north Tx is better but you'd better like the heat, IMHO. Good luck.
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Re: Housing: Rent vs. Buy
Old 01-10-2005, 07:39 AM   #35
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Re: Housing: Rent vs. Buy

I'm sure that this has been mentioned and/or discussed previously, but I wonder whether it makes sense to rent in an area where the property values seem to be escalating at an outrageous (and unsustainable) rate over the long term?

Where I live, property values have increased 30-50% year over year for the past 3-5 years or so. However, with one bedroom condominiums within a 25-30 minute commute to the city going for $300,000+, townhouses for $450,000 and single family homes for $600,000+, it would seem to make more sense to rent a decent-sized apartment close in at $1,200-$1,500 than it would be to buy an affordable place outside the 30 minute commute range. That commute can stretch to more than an hour with traffic, which isn't an unusually occurrence 1-2 times a week.

Am I being left behind if I don't buy?
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Re: Housing: Rent vs. Buy
Old 01-10-2005, 07:49 AM   #36
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Re: Housing: Rent vs. Buy

WOW - where are you located? Those prices are insane.

Any chance of finding a steal in the area? A fixer upper that, with a little TLC, can produce a nice return later on?
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Re: Housing: Rent vs. Buy
Old 01-10-2005, 08:42 AM   #37
 
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Re: Housing: Rent vs. Buy

One of my real estate ideas is that I try to have a nice
profit locked in on the day that I buy it. Just takes some
research and shoe leather.

JG
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Re: Housing: Rent vs. Buy
Old 01-10-2005, 09:44 AM   #38
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Re: Housing: Rent vs. Buy

John - my point exactly. A property in which you are making an instant profit the day you sign the papers....might take some work, but well worth it.
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Re: Housing: Rent vs. Buy
Old 01-10-2005, 12:22 PM   #39
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Re: Housing: Rent vs. Buy

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WOW - where are you located? *Those prices are insane.

Any chance of finding a steal in the area? *A fixer upper that, with a little TLC, can produce a nice return later on?
Our nation's capital -- Washington, D.C. The problem is that statistically speaking (although I never knew statistics was its own language, but then again, I'm not a statistician) there is a 15-year housing shortage in the D.C. area. I'm thinking it might make sense simply to buy a "fixer upper" 3-bedroom condo that I can make some nice repairs/upgrades to, and then flip it in a couple of years. Perhaps it might be better to do so with a townhouse, which although it might require more cash up front, might sell better than the condo.
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Re: Housing: Rent vs. Buy
Old 01-10-2005, 10:27 PM   #40
 
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Re: Housing: Rent vs. Buy

Hi guys,

This is pete from san diego, california where renting is a way of life not a choice. The homes are ridiculously overpriced(557K being the median). This does not make any sense where median income is said to be 63 K, yet the demand seems to be constant. The question is not whether to rent or buy rather whether to stay or leave. Any thoughts on this irrational phenomena?
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