Rent or Own? - Page 2

Miss Rosie · 01-06-2008, 10:32 AM

I'm a lifelong renter, and glad for it.

There are a lot of hidden costs in homeowning, including maintenance of the structures and the property, replacing broken appliances, and home improvements. That's often not figured into the cost of owning, plus you must never borrow against your equity. Another problems is that homeowning as an investment only works if you live in a place you plan to live in long enough to pay off your mortgage and property values at least hold, if not increase. Obviously, that's not always the case.

I live in a complex. Included in my rent is building maintenance, grounds maintenance, appliance replacement and upkeep on a swimming pool. In order to get that much from home ownership, I'd have to pay double if I wanted to stay in this school district, plus be prepared to take the hit if the property value decreases.

Personally, I think I have a really good deal.

amandajane · 01-06-2008, 11:56 PM

Thanks for all the great information and life experiences folks, I've really enjoyed reading this thread and the linked info. I feel a lot better now about my decision to rent.

At the moment I'm not able to save any decent amounts of money because I'm a full time student, but when I can I think I'll be renting still.

All those hidden costs can really cripple a person financially. My Mum had a house of her own and was a widow whilst she was paying the last portion, it was very hard for her to manage and I think that's what put me off buying in the first place.

Sadly she finished her days in a rest home and because of the UK laws she had to spend all that her and my father had worked so hard for, it left her with very little.

She explained to me about rates, bills etc when I was a (somewhat selfish) teenager. A valuable lesson I'm fully intending on teaching my almost 10 year old over the next few weeks whilst he's with me. He seems to think money really does grow on trees!

rolltimer · 01-07-2008, 01:53 PM

I have been both a renter and a homeowner over the past 25 years since leaving college. Tax advantages of ownership are frequently touted but it depends upon your tax bracket. If your income places you in the 10 to 15% bracket, itemized deductions aren't necessarily going to be substantially more than the standard deduction you get already. If you're young and single, live in as small and cheap a place as you can find and save every penny you can. I lived in a furnished, utilities-paid efficiency for 7 years after landing my first full time "real" job. Because I was renting from an individual, my rent stayed the same for 6 of those 7 years but my income increased as I received raises, changed jobs, and moved ahead in my career. Just before I purchased my first home at the end of those 7 years, my living expenses were approximately half of my take-home pay. I wish now I'd stayed there another 7 years instead of buying. I was unprepared for the burden of repairs and expenses that homeownership required.

sunydaz818 · 01-10-2008, 08:44 AM

Everyone where I live in Long Island, NY says buy, buy, buy. Now is the time to buy. I just can't find the money for a down payment. Renting is as much as a mortgage payment, but with a house you obviously have many more expenses. Any ideas on how to make it in NY?

alredd · 01-10-2008, 09:34 AM

This is such an interesting discussion to me. I appreciate all the links...

We've been renters for 5 years, and during that time paid off student loans (though we might incur more in the future...) We're a family now and though I would like a little more space than our current 2 BR apt, I think the next time we move we will still rent. It has saved us money in landscaping, appliances, etc.

For us, with the prospect of moving for school over the next few years, renting is just better, I think, for now. I do want to be in a place where I can paint my child's walls, though...so we might rent a house next.

01-06-2008, 11:56 PM	#12
amandajane Senior Member Join Date: Jan 2008 Location: New Zealand Posts: 417 Reputation: (191)	Thanks for all the great information and life experiences folks, I've really enjoyed reading this thread and the linked info. I feel a lot better now about my decision to rent. At the moment I'm not able to save any decent amounts of money because I'm a full time student, but when I can I think I'll be renting still. All those hidden costs can really cripple a person financially. My Mum had a house of her own and was a widow whilst she was paying the last portion, it was very hard for her to manage and I think that's what put me off buying in the first place. Sadly she finished her days in a rest home and because of the UK laws she had to spend all that her and my father had worked so hard for, it left her with very little. She explained to me about rates, bills etc when I was a (somewhat selfish) teenager. A valuable lesson I'm fully intending on teaching my almost 10 year old over the next few weeks whilst he's with me. He seems to think money really does grow on trees! __________________ frugal life blog

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01-06-2008, 10:32 AM	#11
Miss Rosie Senior Member Join Date: Jan 2008 Posts: 101 Reputation: (27)	I'm a lifelong renter, and glad for it. There are a lot of hidden costs in homeowning, including maintenance of the structures and the property, replacing broken appliances, and home improvements. That's often not figured into the cost of owning, plus you must never borrow against your equity. Another problems is that homeowning as an investment only works if you live in a place you plan to live in long enough to pay off your mortgage and property values at least hold, if not increase. Obviously, that's not always the case. I live in a complex. Included in my rent is building maintenance, grounds maintenance, appliance replacement and upkeep on a swimming pool. In order to get that much from home ownership, I'd have to pay double if I wanted to stay in this school district, plus be prepared to take the hit if the property value decreases. Personally, I think I have a really good deal.

01-07-2008, 01:53 PM	#13
rolltimer Senior Member Join Date: Dec 2007 Location: Alabama Posts: 131 Reputation: (24)	I have been both a renter and a homeowner over the past 25 years since leaving college. Tax advantages of ownership are frequently touted but it depends upon your tax bracket. If your income places you in the 10 to 15% bracket, itemized deductions aren't necessarily going to be substantially more than the standard deduction you get already. If you're young and single, live in as small and cheap a place as you can find and save every penny you can. I lived in a furnished, utilities-paid efficiency for 7 years after landing my first full time "real" job. Because I was renting from an individual, my rent stayed the same for 6 of those 7 years but my income increased as I received raises, changed jobs, and moved ahead in my career. Just before I purchased my first home at the end of those 7 years, my living expenses were approximately half of my take-home pay. I wish now I'd stayed there another 7 years instead of buying. I was unprepared for the burden of repairs and expenses that homeownership required.

01-10-2008, 08:44 AM	#14
sunydaz818 Junior Member Join Date: Jan 2008 Posts: 1 Reputation: (10)	Everyone where I live in Long Island, NY says buy, buy, buy. Now is the time to buy. I just can't find the money for a down payment. Renting is as much as a mortgage payment, but with a house you obviously have many more expenses. Any ideas on how to make it in NY?

01-10-2008, 09:34 AM	#15
alredd Junior Member Join Date: Jan 2008 Posts: 2 Reputation: (10)	This is such an interesting discussion to me. I appreciate all the links... We've been renters for 5 years, and during that time paid off student loans (though we might incur more in the future...) We're a family now and though I would like a little more space than our current 2 BR apt, I think the next time we move we will still rent. It has saved us money in landscaping, appliances, etc. For us, with the prospect of moving for school over the next few years, renting is just better, I think, for now. I do want to be in a place where I can paint my child's walls, though...so we might rent a house next.