Your throwing your money down a blackhole

[jackfaire]

Shut up. Shut up. Shut the fuck up.

I know you are buying your home for the next 30 years. I understand why you want to. I don't. I have no interest in trapping myself in debt for that long to something that may force me to keep a job or other life situation that has become unbearable so that I can afford my place to live because at that time the market is bad and selling would be nigh impossible.

Please stop lecturing me that I am throwing my money down a freaking hole. Since when I pay rent for a month I get to stay where I am living I don't consider that a black hole.

Even if your referring to the fact I am not building equity guess what I am still getting value for my dollar not as much as you no I will grant you that but I have more versatility than you. If I have to I can give 30 days notice and move to where I need to be instead of spend a year or two trying to sell a house no one wants.

[BlaqueKatt]

Please stop lecturing me that I am throwing my money down a freaking hole. Since when I pay rent for a month I get to stay where I am living I don't consider that a black hole.

I consider renting to be worth it due to hearing my coworkers massive complaints on stuff in their houses breaking*, or getting damaged by weather, they have to come up with the repair money....I just make a phone call....


*in the past year my two home owning coworkers have repaired or replaced(not by choice):
furnaces(one repaired, one had to replace)
water heater(died)
washer(died)
dryer(died)
flooring(damaged when the windows broke-was carpet, replaced with wood)
siding(hail damage)
windows(hail damage)
refrigerator(died)
dishwasher(died)

one is currently saving up to have the roof redone, as yup hail damage, but can't afford to fix it yet.

I've had two make a couple calls to have things fixed(leaky faucet, broken garbage disposal), and that's done within 24 hours usually.

[MadMike]

It was really annoying hearing that from people, when it wasn't that I didn't want to buy a house, it was that I couldn't afford to. Usually, all I had to say was, "OK, you gonna give me the money for the down payment?" That shut them up pretty quick.

[blas87]

I hear you guys loud and clear on that one.

I would LOVE to own my own home, especially be able to paint the walls and decorate the way I want, add carpet or take it away, and add on/change stuff that renting doesn't allow.

However, I do like that renting means if my toilet leaks, someone has to come fix it for me, and quickly, same if my fridge dies.

Plus, if you establish a good renting history, you will never have a problem getting another place if need be. I've never been late with a rent payment, so I'm certain when the time comes to get a different place, I shouldn't have any issues.

[tabbyblack13]

At this stage in my life renting is the way to go.

The thing is, when I first got out of college with $41,000+ worth of debt and I had a lot of coworkers telling me I should invest in a house in Phoenix. Now Phoenix is over 2 hours away and this is during 2007 when housing prices where really high. Now the same coworkers are trying to tell me the same thing but then I ask them "How can I take care of a house when I am over 2 hours away?" or "Where can I get a Mortgage for $200 a month?". The $200 is my monthly rent that includes water and sewer. That tends to shuts them up very fast.

[SongsOfDragons]

I plan on renting for at least the next ten years...

[Boozy]

I've had this argument here with people before and gave up. The prevailing attitude in the US, even after the real estate crash, has been that owning a home builds equity and that home equity is a good investment.

Owning a home is one of the worst "investments" out there. Even during the last 30 years in which home prices have gone through the roof. Even for people who sold in 2007 at the height of the boom.

A dollar invested in a home in 1980 would be worth anywhere from 3 to 6 times that amount today. Less if we're talking about areas that were hit badly by the crash, such as Florida. A dollar invested in the DOW in 1980 is worth anywhere from 10 to 15 times that today.

The counter-argument is that you have to pay to live somewhere, so you might as well "build equity". But I don't think people sit down and do the math. They forget to factor in property taxes and maintenance costs, things that are not factors when you rent. I think people also forget how much interest they pay on a mortgage. Interest can total anywhere from 100% to 500% of the principle over the lifetime of the mortgage. The bulk of the money you are paying towards your mortgage in the first 10 years does not build equity - it's paying interest.

Personally, my husband and I are currently renting. We're talking about buying a home this year, for reasons that have nothing to do with finance. I want a yard for my dogs and to garden, and he wants to be able to renovate and set up a home theatre. We can't do that in a rental. We're aware that home-ownership is a dream we'll pay dearly for - it's not our retirement fund. Our investments are in blue chips.

[Mytical]

The only benefit of buying is that..when it is paid off .. that is it. No more monthly payments..yes you have to repair things, and have land taxes, but considering that if you pay $650/month for rent..that can add up to some decent savings in the bank .. ONCE IT IS PAID OFF. Not while you are still paying on it. As for repairs, there is insurance to help offset that, and even at 10 months (again once it is paid off) that is 6500 saved up.

Also rent tends to go only up, regardless of the housing market, and 650 is actually on the cheap side around here.

All that being said..it generally takes about 30 years to pay off a mortgage. During that time you are still responsible for any repairs..so yes..short term it can be much more expensive. Long term though..there are benefits. Neither renting nor buying are superior..unless you can flat out pay cash for a place (ie no mortgage). Owning something free and clear can indeed save a ton of money per month.

[Andara Bledin]

The thing about owning property is that, bubble aside, it doesn't go away; 50 years from now, you will still own that property, and like as not, it will still have the same relative value it had when you bought it. Plus, I know half a dozen people who are retired on money made from rent paid to them. Two of them travel the world extensively and the last has only a few, but they keep her with a tidy income so that if she doesn't want the work options that come her way (she's in the legal profession), she can just not work and not worry about where the money comes from.

As an aside, my mortgage costs about the same as my rent did, and I have twice as much space, don't share any walls with neighbors, and my payments will improve my credit rating so that a few years from now I can re-fi and pay less than I was paying for so much more.

All that said, if you aren't ready to buy, you just aren't ready. It does tie you to an area, but not like people think; if you really want/need to up and leave, you just need to find tenants and do the landlord thing. If you do it right, then you will be making a net profit on rental of the property versus rental of wherever you go. If you don't want to hassle with it so much, you can probably get a management company to handle it for you without losing too much off the top.

^-.-^

[DGoddess]

I hear you guys loud and clear on that one.

I would LOVE to own my own home, especially be able to paint the walls and decorate the way I want, add carpet or take it away, and add on/change stuff that renting doesn't allow.

However, I do like that renting means if my toilet leaks, someone has to come fix it for me, and quickly, same if my fridge dies.

Plus, if you establish a good renting history, you will never have a problem getting another place if need be. I've never been late with a rent payment, so I'm certain when the time comes to get a different place, I shouldn't have any issues.

We've rented all our lives. Only time I recall my parents ever owning a home was when I was around 5 . . . but then they separated a year later and by the time I was 9 1/2 Mom had to sell the house back to the man they'd bought it from b/c she couldn't afford the payments any longer.

We did look into buying a home a couple of times, but looking back on it I'm glad we didn't . . . because after Mom got sick back in 2006, there would have been no way we could have afforded to make our payments and would've lost the house anyways.

But we do have advantages when it comes to renting:

1) Don't have to pay property taxes

2) as long as we pay our rent every month and not tear up the place, we can stay here

3) Don't have to pay for major repairs

4) If something does need to be repaired/replaced, we simply make one phone call and it's taken care of

That's not to say we can't do stuff to the house . . . we have over the years (been here now for 22 years this past February.) What we've done over the years include:

add a double deck onto the back

repainted the house inside

finished the insulation and putting walls and partioning off part of the back porch so I would have a private office just off my boudoir

replaced the railing around the front porch and also had new rails built going down the front steps

had new electrical outlets installed in the office (back in the early 90's)

added a split rail fence around the front of the house (twice now in the last 16 years)

new flooring in the kitchen (same time we had the railings replaced on the front porch - summer Mom was in the hospital having back surgery.)

installed central air (yes, we took out the loan and paid for this ourselves b/c the owner claimed he'd have to raise our rent dramatically if he paid to have it installed.)

installed a home security system (we're on our 2nd one within the last 12 years or so)


What the owner had to cover over the years:

new insulation and vinyl siding (first summer we were here)

storm windows all the way around (2nd summer we were here)

new bathroom (1992 after Mom nearly fell through the bathroom floor and it was discovered that not only we had a severe leak under the toilet, but the original terra cotta pipes were deteriorating so owner told his nephew, who was doing the work, to just replace everything from the ground up and be done with it. Ended up with new sink, tub with shower and toilet as well as new pipes and flooring.)


new roof (I want to say that was around 1994 or 1995. We covered the inside repairs that were needed when we had a bubble break in our living room ceiling that caused a mini waterfall to rain down.)

Jacked the house up from underneath (floors were starting to sag, but what can you expect from a house built in 1925 after so many years?)

replaced the hot water heater (twice now. Just got the new one last fall as the previous one was rusting and leaking brown water.)

replaced the glass in 3 of the storm windows due to rock damage (probably from rocks hitting that got caught in the lawn mower while yard guys were doing work on the yard)

replaced flooring in my office late last summer (and ended up having to send the electrician out b/c one of the floor guys hit the 220 line with a screw, which caused our dryer to short out! We did agree to cover the appliance repair bill since they were covering the electrician bill.)

So yeah, while renting may not be for everyone, it's worked out fine for us so far.

[Andara Bledin]

Fun fact about upgrading rental property: If you as the renter upgrade the property, the landlord has the right to raise your rent based on the new value. Many won't do that, but many will.

The apartment I was in last required that you use a service to install a screen door onto the property, to the tune of nearly $200. And that was after you paid $500 for the door. Yeah, so glad I don't have to deal with that bullshit any longer.

For those of you with good landlords, cherish them.

A cautionary tale from my youth: My dad was a waste of food at that point and the landlord had let us stay for several months without paying rent because he thought dad had up and left. When he found out that he'd made a bad assumption, he did the eviction thing and when the day came, hired a crew of thugs to throw everything we owned into a dumpster. They broke, damaged, or destroyed a large percentage of it and actually murdered one of our birds.

^-.-^

[SongsOfDragons]

Our landlord is good, even if we can't contact them. We have to go through our estate agent instead. They wouldn't do anything about Dickwad parking in our space, but when I locked myself out when the patio door broke they sent out a locksmith within an hour; when our grill turned into a Salvador Dali sculpture they sent someone to fix it within the week. That's all we've needed and we've been here nearly three years.

My mum and dad own a couple of houses in Redcar which they rent out. It's not much of a rent as it's a poor-ish area, but it would be a good sum every month of about £800. They've had problems with people doing a runner, and one woman who just left has left one of the houses in a dreadful state. Mum sometimes wonders if they're breaking things deliberately to get new stuff, as they're very good with fixing stuff quickly like my landlord.

[jackfaire]

I think part of it is the "american dream" one I have never shared. Me I would rather be happy. Owning a house would not make me happy. Others though are convinced I think that everyone wants to own a house and come up with every justification as to why it's horrible to rent.

[telecom_goddess]

I'm a renter, have always been a renter. It's for financial reasons...I can't afford a down payment and I can't afford costly repairs/replacements. If something breaks it's not MY problem or cost to fix it.

I'm lucky I have good landlords finally. They manage the place themselves and don't go through a management company and it's so much better.

[guywithashovel]

Like someone else said, if you own, then eventually you will pay off that mortage and own the place completely---unless, of course, you are the kind of person who likes to refinance every few years so you can get a new boat, new car, put in a new kitchen/bathroom, etc. If you're paying $500 per month in rent, and you're friend is paying $600 per month for his mortgage, then eventually your friend is going to pay off his mortgage and not have to deal with the payment (unless, of course, he keeps borrowing more money every so often for whatever frivilous thing he wants). You can say that the friend who owns is in debt, and he is, but really, the renter is in debt, too (to the landlord). Because of this, I really can't be argued into the position that it's better to rent than to own.

Now, don't get me wrong. If you're happy renting and don't want to own for whatever reason, that's your business and I won't give you any unsolicited opinions, advice, etc. over it. Likewise, I'll acknowlege that there are perks to renting, like the repairs being the landlord's responsiblity, though this is only a perk if you have a landlord who is expedient about dealing with repairs. However, I can't really be sold (no pun intended) on the notion that renting is superior overall to owning.