Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Owning vs Renting?
Old 08-11-2004, 06:02 PM   #1
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 170
Owning vs Renting?

There appears to be a poplar fundamental answer to this question....

....interested in perspectives and decisions you've made regarding this?

TD

__________________

__________________
Tommy_Dolitte is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: Owning vs Renting?
Old 08-11-2004, 06:12 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,409
Re: Owning vs Renting?

RENT - heh, heh unless she "makes you an offer you can't refuse". Anywise - fishcamps aren't/weren't too expensive.
__________________

__________________
unclemick is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-11-2004, 10:21 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Jun 2004
Location: No. California
Posts: 1,601
Re: Owning vs Renting?

I bought my first house in 1977 and have owned 3 different ones since then. Each time I paid extra on the mortgage and when sold rolled all money into the next house. The California housing market has increased quite a bit since 1977 so I have a very nice nest egg in my current home and will be able to ER after owning it for 2 years and then selling it.

Renting doesn't build equity. THat's my opinion on rent vs own.

__________________
KB is online now   Reply With Quote
Re: Owning vs Renting?
Old 08-11-2004, 11:45 PM   #4
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 94
Re: Owning vs Renting?

Agree with KB. Seek to buy if at all possible / circumstances permit.

All other things being equal, renting is dead amoney, whereas buying builds equity. One can look at the mortgage payments, remove the interest and simply visualise the capital repayment as actually paying money to onesself - all you are doing is swapping cash for equity, only the interest is a ''cost''.

BTW, we now have two properties, so I should declare a personal bias towards 'Real' property.

Simon888
__________________
50% Down in NW and Can't Stop Smiling!!
SDY888 is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 02:40 AM   #5
Dryer sheet aficionado
 
Join Date: Jun 2004
Posts: 41
Re: Owning vs Renting?

Depends on how often you move. *I would suggest buying only if you plan to stay for at least three years. *Most of money paid up front on mortage is interest. *Also, not every housing market is like the west and east coasts where properties appreciate rapidly. *For instance in Texas where wide tracks of land is avalible for new homes, people often take a loss on selling their used home once closing costs are calculated. *I seen people have to do 10 to 15% market downs to get home sold.

A home may not always be a good investment. *Look at your situation and the local real estate market.
__________________
otako is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 08:58 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Owning vs Renting?

I've made almost as much money buying and selling my primary residence as I have investing in stocks, but I'm going to split the answer.

I think you should own if you live in an appreciating area, and rent if you live in a stable or downturning area.

Since my area is appreciating, I own again. Paid $252k for my house a year ago and similar models on less land on a main road (mine is on a large lot in a small cul de sac) are selling for $315-330 now.

My plan uses the residence as a backstop. Should I start running out of money later on in life, say in my 60's or 70's, I'll sell the house and move into a smaller apartment or rent a small house somewhere and replenish my portfolio with cash from the home sale.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 10:32 AM   #7
 
Posts: n/a
Re: Owning vs Renting?

TH, I like your plan, maybe because it is similar to
mine Anyway, you're a smart guy and a pretty
funny one. Keep working on your shtick and pretty
soon you will as witty and entertaining as unclemick
and I.

John Galt
__________________
  Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 10:40 AM   #8
Full time employment: Posting here.
 
Join Date: Oct 2003
Posts: 961
Re: Owning vs Renting?

Since I usally take the point of view that the markets (stocks, bonds, real estate) are unpredictable:

(1) I would only buy a house if you can afford it (payments, repairs, taxes, etc.).

(2) I would only buy if you can afford to see your "investment" decline in value.

- Alec
__________________
ats5g is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 11:35 AM   #9
Recycles dryer sheets
 
Join Date: Sep 2002
Posts: 252
Re: Owning vs Renting?

Whenever I ask friends of mine who own houses what they did on the weekend, it's almost always "I worked on the house..."

Owning makes more sense if you are married or otherwise living with someone, since you can use the extra space and both of you can help with chores. Extra bonus points if you have kids that you can tell to mow the lawn
__________________
Whakamole is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 03:18 PM   #10
Full time employment: Posting here.
 
Join Date: May 2004
Location: Worldwide
Posts: 913
Re: Owning vs Renting?

I am hearing there are some good deals in southern Florida today.

Billy
Website www.geocities.com/ba264
__________________
In 1991 Billy and Akaisha Kaderli retired at the age of 38. They have lived over 2 decades of this financially independent lifestyle, traveling the globe.
Billy is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 03:31 PM   #11
 
Posts: n/a
Re: Owning vs Renting?

I think everyone wants to own a home that they like; someday, but it is not the financial nirvana that real estate agents and all of your co-workers claim it is.

I rented a long time when I was unsure of where I wanted to live. This was after I owned a home that I basically hated and in reality would have been better off renting.

So I would only buy, if you want the damn thing. Buying to make money is a Full Time Job

With that said, my wife and I built a place about 6 years ago and really like it. But there is not the hurry or panic that American Society seems to inflict on everyone.
__________________
  Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 03:54 PM   #12
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: Owning vs Renting?

John - I can only dream about one day aspiring to reach the level you and Unclemick have achieved.

I must have lucked out on the house thing. I've done a ton of work to my wifes old house but thats because its 50 years old and nobody has done any maintenance on it for a decade.

I've hardly a darn thing to the last three I've owned. Nothing really to the latest one although I'm going to have to spend an hour or two installing a drip edge as the builder was an idiot and didnt put one on.

But its a bitch to find a house in a rising market, and the way things are right now, most risen markets just have to be topping out. However I did think that about the SF bay area market 8 years ago and now look at it.

Whats really troubling is that all the nearby and even not so nearby areas are starting to really get ridiculously overpriced. I moved from a highly desirable area to a so-so one 45 minutes away, and stuff an hour past me in a very, very so-so area is now selling for prices I wouldnt even consider.

I guess I dont even have renting as an option right now. Too many cats and dogs...I'd never find a landlord that'd take 'em. Plus I like the idea of knowing what my housing costs are for the next 25 years. Zero. Well, almost zero...a little paint, a little caulk, and a couple of appliances.
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-12-2004, 11:12 PM   #13
 
Posts: n/a
Re: Owning vs Renting?

Renting isn't throwing money away, you're paying for a place to live. Buying doesn't necessarily build equity -- you have to pay off the mortgage.

I'd be very careful buying realestate in a market where rents are considerably less expensive than a mortgage payment on house (assuming 10% or so down.)

Buying ends up being an excellent option for the many people that can't save unless they are forced to.

The transaction costs for realestate are insane. I expect this to change over the next 10 years.


__________________
  Reply With Quote
Re: Owning vs Renting?
Old 08-13-2004, 12:55 AM   #14
Dryer sheet aficionado
 
Join Date: Jun 2004
Posts: 41
Re: Owning vs Renting?

My advice is wait. *Rent until the market goes down and buy. *Right now the price of houses on the both west and east coasts are inflated because of bubble. *This real estate bubble will pop as interest rates go higher.

Trust me your going to feel stupid buying 300k overpriced home on the west coast after the bubble bursts. *When the normal starter house goes back to sub 100k, you will still be stuck with mortgage and nobody to sell it too.
__________________
otako is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-13-2004, 05:20 AM   #15
Recycles dryer sheets
 
Join Date: Jul 2004
Posts: 165
Re: Owning vs Renting?

I agree with Otako, if I am aspiring to buy, I will wait for a few more years. My hunch is that we are seeing a housing bubble that is about to burst or deflate.

Now I am on a buy side, not because I believe that rent is a waste of money but because:

1. Moving somewhere is not in my plan. I like my neighbourhood and/or city. This area is appreciating with lots of amneties (shopping, schools, banks, community centre and gasp! Golf course & country club - yeah my area has a lot of McMansions). John Blake is right, people often forget that there is more to real estate transaction than downpayment (that said, always try to negotiate these closing costs).

2. With my 4.45% fixed interest rate, my mortgage payment costs less than if I rent similar place (this is important as I always looking at cutting cost of living). That said, if you are going to buy, never buy more than you can chew. Just because interest rate is low, don't stretch yourself out.

3. From emotional point of view: I would like to have a roof over my head that is my own. I am also on the side of "paying your mortgage sooner than later".

4. From FI point of view: one day, with a paid-off residence, my housing costs will go down considerable (not zero though), which means if I ever lose my way of earning a living, I can live on a lot less and my savings will go farther.

5. I don't actually see my home as an investment although it probably can be treated as one. I need a place to live whether renting or otherwise. So it solves having to worry if my home value will go down/up. To me, if it goes up, great! If it goes down, oh well...I still need a place to live. I always tell people that unless you buy a property for rental, don't look at it as fool-proof "investment". Sure you have to think about location, the condition of the place, etc, but don't treat a home as your "retirement savings".

4. I would rather live somewhere where I can control the cost (own) rather than depeding on landlord's rate (rent).

Jane
__________________
Jane is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-13-2004, 06:35 AM   #16
Recycles dryer sheets
 
Join Date: Jun 2002
Posts: 367
Re: Owning vs Renting?

The rent versus buy debate, it will never end ! I'm on the own side of this, but for different reasons than only financial. I bought a cheap foreclosure house a few years ago b/c the mortgage payment was cheaper than rent on any place I could get, never mind a house with a garage. Of course the place was in disrepair, but I enjoy fixing things, so this was ok. As an investment, getting it cheap and putting in some sweat equity and watching the value of the place double was very rewarding. BUT, I have a hobby where I like to play with cars and motorcycles, so I wanted my own garage and yard where I could do what I pleased, and not be at risk of being asked to leave b/c the house is for sale. I guess the point is that this is more than a simple financial decision, but on the financial side, buy it right and don't buy more than you need.

Now, I've paid off my mortgage and I'm looking for investment property #1......

-Pan-
__________________
When you walk in the shadow of insanity, the presence of another mind that thinks and acts as yours does is something close to a blessed event. -Robert Pirsig, Zen and the Art of Motorcycle Maintenance
panhead is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-13-2004, 07:30 AM   #17
Thinks s/he gets paid by the post
 
Join Date: Jun 2003
Location: Historic Florida
Posts: 1,647
Re: Owning vs Renting?

Quote:
I am hearing there are some good deals in southern Florida today.

Billy
Website www.geocities.com/ba264

Where? Duh!

SWR
__________________
"Arguing with an Engineer is like rolling in the mud with a pig. Just remember that the pig likes it."
ShokWaveRider is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-13-2004, 07:37 AM   #18
 
Posts: n/a
Re: Owning vs Renting?

"good deals in southern florida"
hmm...if that is a joke, maybe only a floridian could 'get it'?
Bonnie was over blown. we'll see with Charlie.
__________________
  Reply With Quote
Re: Owning vs Renting?
Old 08-13-2004, 07:38 AM   #19
Full time employment: Posting here.
 
Join Date: May 2004
Location: Worldwide
Posts: 913
Re: Owning vs Renting?

You might try Tampa in an hour or so.

Billy
Website www.geocities.com/ba264
__________________
In 1991 Billy and Akaisha Kaderli retired at the age of 38. They have lived over 2 decades of this financially independent lifestyle, traveling the globe.
Billy is offline   Reply With Quote
Re: Owning vs Renting?
Old 08-13-2004, 07:51 AM   #20
 
Posts: n/a
Re: Owning vs Renting?

Going by the local grocery's empty shelves, everyone is pretty much stocked up on batteries and beer....
__________________
  Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Not permitted to deduct mortgage interest from taxes - mortgage v renting? claire FIRE and Money 12 01-06-2007 04:43 PM
The advantages of owning real estate... cube_rat FIRE and Money 13 09-06-2006 06:34 PM
REIT vs Owning your rental units mickeyd FIRE and Money 3 03-05-2006 07:13 PM
Owning vs renting XXVII cute fuzzy bunny FIRE and Money 3 03-03-2006 09:40 AM
Better off renting? aaronc879 Young Dreamers 66 02-16-2006 01:01 PM

 

 
All times are GMT -6. The time now is 11:24 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.