Owning vs. Renting?

xnihilum · 2018-02-02T01:23:26+00:00

Anton Kreil,a trader, says the same thing as those people you mentioned.

You end up paying a lot more when you take a mortgage with interest and freedom is an asset. You can walk away when you rent but not with a mortgage. Remember that a house is a liability and an asset to the bank.

GranUnic0rn · 2018-02-02T03:24:14+00:00

Bought a "modest" sized house (*) getting close to 20 years ago now -- when I was in my late 30s/approaching 40 (after nearly 20 years of renting & moving) -- though there were also other motivations & factors, chiefly I was just sick & tired of both moving AND just of "renting" (even though I'd rented a small house for 7+ years prior to buying, well it's NOT the same; you lack things like a garage/shop to work on cars, and even with the "best" landlords, the house & yard are just NOT really yours, etc).

Nearly 20 years now... ZERO regrets.

With mortgage paid off (see below), my "housing" cost is about $250 a month ($350 if you include gas & elect utilities) -- probably a bit LESS than that most years -- that's adding up property taxes *** (under $2k per year, about $150 per month), home insurance & various repairs (probably total of $100 a month); And most years, utilities (gas & elect) average out to about $100 a month (spring/summer/fall sometimes about $50 a month, really COLD winter months can go to $200+). (Side note: similar sized neighboring homes that ARE rented out, apparently go for about $1200 to $1500 a month, NOT including utilities.)

That gets me the entire house, modest but still BIG for one guy (single bath, spare bedroom, large master bedroom, decent sized "great" room with fireplace, loft that doubles as home theater/office, general seating area; also with a nice deck/porch (view of sunsets). Along with a full sized detached 2 car garage (with additional workshop), paved drive (& room to park several additional vehicles when needed)... plus a bit over an acre of land (with various fruit trees & bushes, apples, pears, raspberries, etc {some already here, some & planted} plenty of room for gardening {the years I want, mainly tomatoes & peppers})... and FREEDOM to pretty much do as I fucking please.

-- Oh, there IS an HOA -- but very MINIMAL (i.e. no funky "rules" bullshit; I made sure of that BEFORE I bought) -- HOA just maintains & oversees the private community swimming pool (heated, in-ground, but outdoor, summer only), and a lakeside park with pier/boat dock -- ANNUAL dues on that have been around $200 (so < $20 a month).

* House is in area that other people own "vacation cottages" -- it's relatively small (vs say McMansion bullshit) -- but its still more than big enough for a single guy and even has a spare bedroom I've used to "host" friends in need. (And even though the place is small-ish, I still have an order of magnitude more "space" to call MINE than any married guy I know does, even the ones in houses with several times the square footage of mine).

Also, bought with ~25% down (IMHO you want at least 20% to avoid PMI, etc) and paid the thing off within 8 years (heavy additional upfront payments during early years... could have paid it off in 6 years, but principal was already down so low that it didn't matter much -- and decided to do other things, like insulate & install heat in the detached garage, add a workshop onto the side of it, etc).

Needless to say I don't go along with the "you should rent until you can buy 100% cash" bullshit -- I mean that's great if you come into some "windfall"; but to continue to rent, even when you are otherwise situated to buy (**), is just financially ignorant. Provided you use it in a responsible manner (keep it to a minimum, etc), mortgage debt is different than other kinds of "consumer" debt -- in part because virtually everyone HAS to pay for housing one way or another. (And trust me, you ARE paying "bank interest" AND "property taxes" -- they're just buried/hidden in your rent.)

** Ready/Situated to buy IMHO means: A) you're tired of renting; B) you're sick of moving around, no having extra storage/workspace or ability to alter the rooms (etc); C) your job/career is stable and you seriously expect & plan to "stay put" in that job or locale for a decade (or more); and... D) you've not only got the down payment (again ~20%+), but you've got that emergency fund taken care of, your vehicle(s) are solid/paid for, you're started SOME investing for "retirement" {keep in mind a paid off HOUSE is a BIG part of that} and you've got extra savings (to be able to deal with "unexpected" big home repair/maintenance, even "operating" expenses -- like "oops" forgot you're gonna need a lawn tractor/snowblower, etc).

-- Also E) Beyond "stable job" you should really, and I do mean REALLY! want and fully intend & plan to LIVE THERE for 10+, even 20+ (or more) years (i.e. BEST... to the day you die, etc). Any and all of the stuff others write about "buying & selling" within a couple of years -- THAT'S NOT BEING A HOMEOWNER, that's being a "house flipper" -- and it's an ENTIRELY different thing. (IMO it's pure idiocy.)

*** EDIT: I suppose I should note that the number there for "property taxes" also includes about $250 in "fees" -- the annual fee ($180) for weekly curbside garbage & biweekly recycle pickup, plus "annualized" fee ($60) for contracted septic pumping (which happens every 3rd year, about $180 value).

PrefixKitten · 2018-02-02T01:58:33+00:00

Make sure you've lived in an area and like it beforehand trust me. There's so much major dealbreaker shit that will take it's sweet time to reveal itself and you don't want to be locked into a decision too soon.

unsheddogmatisms · 2018-02-02T01:43:31+00:00

On the surface of it, owning a personal residency seems like it can be a wise decision if you have a stable job.

Why do you think this? If you're REALLY loaded, and buying a house doesn't wipe out the majority of your money, then sure go ahead.

Home ownership is a bit of misnomer. As you've mentioned, once you buy the house you will have to pay for rent from the government.

If you have a good head on you, I would put my money into other things(to get returns).

CeleritySteam · 2018-02-02T01:54:40+00:00

There's a few situations where I'd recommend being owned by a home:

1: Cost of houses vs renting apartments is relatively low. Look at apartments at whatever feature level you want from a home. Multiply monthly rent by 60, so 5 years rent. Then increase it by 10% as most rents will increase after every lease term. Compare that with a house, if the house is cheaper it can be worth it assuming of course you'll stay put that long.

2: Busybody interfering apartment landlords, particularly the female ones. I'm of the mindset that if you pay your rent they shouldn't give a shit. A bank most likely won't bother you otherwise because you're beneath them. A good apartment owner won't either. A busybody will get all in your business and be controlling. Also avoid condos, as HOAs are basically the same thing.

3: You really value peace and quiet. Let's face it, if you're renting there will be a lot more people around. Even if you're renting a house (which probably IS more expensive than owning, no matter what).

You can save on a lot of the bullshit if you buy the house outright. If you're moving from a high CoL area in a low CoL area this is more likely.

Vishapstein · 2018-02-02T01:38:53+00:00

Buy a small house if you're not planning to get married or have kids. Rent is the better option if you plan on traveling a lot.

mrk68 · 2018-02-02T02:00:29+00:00

It really depends on a lot of factors. If local housing appreciates in value during ownership, it really helps offset the costs of owning.

I owned a house for 8 years and by far the biggest wallet shocker was maintenance and updates. My house was already 20 years old and quickly started becoming a money pit. Roof leaks, chimney cracks, rotten wood siding, furnace failure, pest control, cracked windows, water leak from poor bathroom plumbing, etc... it all adds up quickly. None of this stuff showed up during inspections, it just quietly happens over time.

Someone once told me to be prepared to rebuild your house, one piece at a time, every 17 years. Now that I rent a house, this kind of expense is somebody else’s problem.

sir_wankalot_here · 2018-02-02T02:00:25+00:00

Renting is makes more financial sense the owning. Pretty much every financial expert will agree on this.

Until recently, owning gave your more freedom, again this is changing since most western countries require you to be hooked up to the grid, what you are allowed to do as an owner is deceasing. So in many western countries even when owning you are essentially renting at a higher price.

shockinghillaryquote · 2018-02-02T02:01:14+00:00

Good question. I own a couple of houses. Never had a mortgage. I buy and sell 'em constantly, usually for a profit, but sometimes for a loss (because of those damn realtor commissions -- with some effort, they can be reduced or avoided, but it really is harder to sell for sale buy owner -- buyers are too clueless and scared to bypass realtors and go on their own, though I have no issue buying from A FSBO. The realtor situation is a racket -- and a good career):

1) Property tax 1k and under is acceptable.

2) Ownership means it's yours. No landlord, no restrictions, no renters nearby. It's a nice thing. Freedom in that sense.

3) HOAs are pretty rare with a house. Some HOA's, usually with a townhouse, under $200 can provide good things like paid water or garbage, maintenance. Anything over that is too much.

4) Study prices in Zillow. A good portion of the country is a seller's market, desirable places people WANT to move to. But just a hop, skip and a jump away (i.e. Pueblo, Co.) everything is cheap.

5) Texas property taxes can be a problem, in my view. Way too high but some areas aren't.

6) Maintenance? A good house in good working order won't require much maintenance. You can buy an insurance policy but I'm not interested in those, unless you're in a weather-prone area.

7) You buy, you're stuck until you can sell. As a renter, you can just bail much easier.

8) R.E. usually goes up in value, but right now we may be at a peak. It's more like cash in a bank. Long-term though the returns can be impressive, i.e. 15+ years.

9) I personally think some of these areas are over-priced, like Provo Utah. And unless you can afford it, a humble home under 200k is a better investment than 300k and up. Under 200k, there will always be a market for those homes no matter what.

So those are some things to think about.

mrp_1844 · 2018-02-02T02:17:18+00:00

Consider tinyhouses. Here is a neat channel: https://www.youtube.com/channel/UCVF1gW8SbEx2WSEPLSQrGhg

Also read Robert Kiyosaki.

HanginnChad · 2018-02-02T03:01:38+00:00

I’m 38 and have owned 5 houses in my life, the first one with my sister and she bought me out. I built the next two and sold, and bought another two and sold both. Each and every single time I fucking hated the idea of being trapped in a location with a mortgage.

Through sheer frugalness and good old fashion tight-ass(ness), I’ve accumulated enough savings to buy a house cash. I’ll be wiped out financially but I’ll have my house freehold.

Still no interest though. I like being able to give my notice and move on when I want. I get bored with areas and homes. Maybe it’ll change later in my life and then I’ll have the means to buy cash.

For me, the ability to have the freedom to move around is worth far more than being stuck in one place

squidracer · 2018-02-02T05:41:10+00:00

I bought a small house because I've always lived in this area. If you wanna move soon then don't get into a mortgage

Long_Range_Shooter · 2018-02-02T16:20:44+00:00

I rented for most of my life and got fed up with the rising rent. My 600 sqft 2 br apt is renting for $1200 a month. My 1700 sqft home costs me around $370 a month with taxes and insurance. My utilities are on average $20 more a month over the apartment.

It's more work because now I have snow to shovel and a lawn to mow. It's mine and as well as my condo in Fl are appreciating assets. The home has appreciated a little over 40% in the last seven years and the condo has averaged about $25K a year since I bought it and worth almost six times what I paid for it back in the late eighties.

As a home owner figure in about 4-5% of the value for maintenance and repairs per year. That includes updating and major problems like roof, AC an Furnace replacement as well as remodeling like bathrooms, Kitchen and finishing a basement. You won't see that 4-5% every year but over 20-30 years it pretty much averages out.

If you build new use a 2-3% rate over the same time period.

I lived in a high cost housing area like California, NY, DC, Boston I'd probably rent.

Spungo1 · 2018-02-02T23:35:04+00:00

say to rent until you can buy a house cash.

That might be the most retarded thing I have ever heard in my entire life. No joke. The cost to rent my condo would be $1100/mo. The net cost of owning the condo is about $360 for the condo fee plus about $300 in interest expense and about $100/mo for property taxes and $20/mo for insurance. This makes the net buying cost about $780.

In 10 years, the net cost will still be about $780 because the interest expense decreases as the debt is paid but the condo fee increases with inflation and the age of the building. How much would the equivalent rent be? $1400? $1500? More?

I've said it before and I'll say it again. Dave Ramsey is a retard.

Owning vs. Renting?

Comments

This is actually HIGHLY debatable.

Nearly 20 years now... ZERO regrets.

Like a lot of things: the WORST ones get all of the news -- the "sane" (BEST) ones, no one ever talks about (what's to talk about??? There's nothing "sensational" or egregious so it's not "newsworthy.")

Title	Owning vs. Renting?
Author	freedomloverdropout
Upvotes	8
Comments	41
Date	February 2, 2018 1:13 AM UTC (8 years ago)
Subreddit	Posted in /r/MGTOW
Original Link	https://old.reddit.com/r/MGTOW/comments/7unpn1/owning_vs_renting/
Archive Link	https://theredarchive.com/r/MGTOW/owning-vs-renting.598850 https://theredarchive.com/post/598850