The numbers, Renting versus buying our home for over 8 years.

[gpphat]

It usually depends on ones situation, a lot of different factors. I have been fortunate enough where owning has made the most sense to me. But I do see where renting would make sense for a lot of people.

The one way I look at the two is....when owning you are paying for your own property which (depending on the area) you will gain equity which you can borrow against for big projects or investments. When renting you are paying for someone else's investment and equity. I own rental properties and the rent collected far outweighs the cost and work I put into each property.

 

[Rory Sparrow]

Hard not to make money if you bought a home in 2011 and then sold it later. 2011 might have been the nadir of the housing market.

 

[Gustavus Adolphus]

I'm patiently awaiting a specific poster in this thread.

 

[PaytonHighstep]

I'm not sure I follow. Did you read the OP and the breakdown of renting vs. owning? I thought it was pretty clear on what his cost was/what he got out of it. I wouldn't call that nothing. On the other hand, when your lease is up on your apartment, you are literally left with nothing. He also included insurance/taxes which was lumped into his mortgage through escrow. In my personal situation, my mortgage with interest, insurance and property tax is lower than anything I would even want to rent. Saying you get something in return for renting because you get a place to live is laughable. Does a house with equity in it not provide the same things?

I get it, owning isn't for everyone. All depends on your personal situation, where you live, etc. IMO, I would much prefer to own something and have equity in it. My mortgage will be paid off by the time I'm 45 (possibly sooner depending on career advancement), which gives me 20 years of no mortgage payments in my prime career earning years. Then when I'm ready for retirement, I can sell my house, because I OWN it, use that equity in my home to move wherever I please if I want. If you rent your whole life on the other hand, what do you have?

This is my gameplan as well. I'm 43 right now and should have my house paid off by the time I'm 47-48. A bit later than you, but still with plenty of time save/invest my current mortgage payment and create a nice nest egg for retirement.

 

[MDB111™]

I agree there is no real right or wrong answer on this. There are benefits to both, like you mentioned, if you rent you don't have to fix chit. My rebuttal would be, don't buy a piece of shit and learn how to DIY.

i rented a hooker once... I had to give her back to the pimp who OWNed her.

 

[MDB111™]

For real though. You keep using a 30 year note window. Imagine paying a little more each month to pay of earlier. Imagine re-financing when rates drop into a better loan.
Unless you are underwater in a note, OWNing is the way to go. Or maybe of you mice every 2 yrs or so it doesnt make sense to own,but you make money when you own.

 

[nc0gnet0]

I think your breakdown of owning a home is a bit overstated, but I understand what you're saying. Owning a home is expensive. As RacerX mentioned, there are tax benefits to owning a home that you do not get as a renter that helps offset the cost of Interest/property tax. My problem with your post and a question you have yet to answer is, atleast when you sell your home you are recouping some of what you put into it. You're not going to get shit back if you rent for 30 years. So, I ask again, what do you get for renting for 30 years? The answer is nothing. If you play your cards right and buy in a good area, your home value (mainly the land it sits on) will increase significantly. Sure, people have lost their asses over the years, but many people seem to do well (see OP) if you don't buy a complete piece of shit in a bad neighborhood.

Another problem I have with your post - rent will not remain the same for the next 30 years. Completely unrealistic to think you will pay the same rent in 2019 as you will in 2049.

Rent price inflation, 1990→2024

This calculator uses the official Consumer Price Index for Rent from the U.S. Bureau of Labor Statistics. Rent costing $1,000 in 1990 would cost $2,993.55 in 2024.

www.in2013dollars.com

Well, you don't get shit back on the interest you paid, so there is that. Or the new roof you had to put on. Or the three-5 water heaters you had to replace, the one furnace, and the refrigerator, stove, etc etc. You didn't have to pay to have the house painted or sided, the replacement windows. the list go's on and on. There are sooo many hidden costs with ownership that always get neglected when discussing rent vs buy. And using a VA loan as an example is not fair. Property values are not static either, as Spunky mentioned, the housing crash is another example. And while rent does indeed go up, so does property taxes, neighborhood association fees, etc etc. when you add in all these costs, ownership is a more expensive option. The question is, if the renter is paying less, and invests his/her savings, will he/she have made more money investing in the market, or investing in real estate.

If you bought a house in 2000, and had to sell in 2007/2008, how did you fair vs the renter? You can't dismiss the element of risk, either.

For the upwardly mobile younger generation that might be faced with multiple transfers and re-locations, owning is a PITA.

This is not a slam dunk as many make it out to be. it all depends on the market with too many variables to draw a general conclusion.