someone break my logic about apartments

[Saint Nick]

Okay... so I've always thought that apartments are sort of a waste of money... you pay a montly rate for a certain period of time... but at the end of the deal, you don't come out with anything. No actual property. Do you guys know what I'm saying? Its like leasing a vehicle... you keep making payments but never end up with a car. Whereas, you make house payments and end up with a house.

Does that logic make sense? Are apartments a waste of money in your opinion? I am looking at some that are very close to my work right now and many of them look nice, but I guess I don't want to "waste money".

 

[FoBoT]

i think it comes down to credit

people with good credit buy houses
people with bad credit rent apartments


expect for that whole real estate bubble based on giving loans to noncredit worthy people thing that has destroyed the economy and is likely to keep us in an extended recession for a few years or so


but other than that...

 

[TuxDave]

Or vice versa, you end up with an upside down mortgage so not only are you tossing 90% of your money in interest but you're spending $300K for a house worth $200K. So you renting isn't ALWAYS worse. It's a far less financial burden to rent first while you save money before jumping into housing.

 

[FP]

Depends on how much house you can get per $ compared to renting.

If I can rent the same house for less than a mortgage then it might be better to save the difference and earn interest on it.

 

[PepePeru]

in light of the circumstances over the past year, the merits of renting should be apparent, for some.

however, renting is convenient, b/c if something major happens, say, the bottom of the hot water tank gives out and floods your house, you're the one stuck w/ the repair bill. plus tack on insurance + taxes, renting just makes sense for some people.

 

[speg]

That's how it is - but it's not as bad as it seems. Home owning comes with a whole set of expenses like repairs, maintenance, taxes, interest, insurance, etc.

If those expenses are greater than your apartment rent - then you would be better off renting. Renting also allows you to easily move if you are not going to be staying in the same city long term.

 

[MrChad]

It's been posted before, but this little flash app is handy:

http://www.nytimes.com/2007/04...7_BUYRENT_GRAPHIC.html

 

[nakedfrog]

Yes and no. If you're not going to be in a house for a certain amount of time, an apartment is probably the better choice.

 

[Dr. Detroit]

Most every rent vs buy scenario has the renter coming out ahead.

Home ownership is 100% the way to go if you want a house and like the responsibilities that come along with home ownership.

If you dislike those responsibilites than renting may be the best answer.

 

[dullard]

If you stay somewhere for a short time, apartments are cheaper. If not, houses are usually cheaper in the long run.

For example, suppose you were to live somewhere for 1 year. Lets say the apartment/rental is $1000/month. Total cost to you: 12 * $1000 = $12000. Lets say a house in the same area is $1500/month (mortgage+tax+maintanence). But you also have to spend $5000 in closing costs and $10000 to have a realtor sell the house. You might by then have $1000 in equity built up though. Total cost to you: = 12 * $1500 + $5000 + $10000 -$1000 = $32000.

Once you move out at the end of the year, you have NOTHING in either case. But the apartment cost $12000 and the house cost $32000.

In the long term, the house will stay at $1500/month (and eventually drop to only a few hundred per month when you have it paid off and only have property tax left) when the apartment will soon become $3000+/month and always going higher. Plus, in the long term you will have a house to sell with lots of equity. In that case, the house usually is better financially.

 

[Ns1]

Originally posted by: NightDarker
Okay... so I've always thought that apartments are sort of a waste of money... you pay a montly rate for a certain period of time... but at the end of the deal, you don't come out with anything. No actual property. Do you guys know what I'm saying? Its like leasing a vehicle... you keep making payments but never end up with a car. Whereas, you make house payments and end up with a house.

Does that logic make sense? Are apartments a waste of money in your opinion? I am looking at some that are very close to my work right now and many of them look nice, but I guess I don't want to "waste money".

1. You don't pay maintenance
2. You don't pay property taxes
3. It's cheaper
4. You are not locked to your house

 

[vi edit]

Tell that to the people in any number of major cities the last 5 years that bought a house and watched it lose anywhere from 10% to 50% of it's purchase price value.

Renting is a perfect option if you:

A) don't want to worry about upkeep on a home.
B) don't want to outlay a huge pile of cash for a down payment
C) don't know how long you are staying in an area (typically takes 3-5 years to break even on a home)
D) are for very good reason scared to death about the current housing market
E) wanting to live in a desired area where houses simply aren't available/affordable

 

[DawsonsDada]

My family and I are in this same situation. It may not be a waste of money depending upon your situation. If you find an apartment that allows you to SAVE some money towards the down payment on a house in the future then it isn't a necessarily a "bad" decision. Especially if they are nice apartments and near where you work. You would have to figure in the amount of time it would take you to get to work if you bought something versus living in an apartment closer to where you work.

In my situation I have a 50 mile (one-way) commute every day. My rent is $1200 a month where I live currently. For me to rent somewhere that shortens my commute, my rent would be over $2000 per month. I can not even begin to afford to buy something closer to work due to the cost of housing in this area (around D.C.) We are doing our best to save money every month to buy something soon so we will see how it goes. YMMV but these are just my thoughts.

 

[Lorax]

as i've been learning, once you're a homeowner, you have to pay to upkeep the thing. (just bought a new water heater)

 

[DawsonsDada]

Originally posted by: FoBoT
i think it comes down to credit

people with good credit buy houses
people with bad credit rent apartments


expect for that whole real estate bubble based on giving loans to noncredit worthy people thing that has destroyed the economy and is likely to keep us in an extended recession for a few years or so


but other than that...

Don't like to disagree but I have decent a decent credit score (700+ FICO score) and am renting right now. Prices for buying, until recently, were exorbitant in my area so we couldn't buy anything.

I DO agree with you that there were a lot of people who got loans that they probably shouldn't have taken out though.

 

[compuwiz1]

Originally posted by: FoBoT
i think it comes down to credit

people with good credit buy houses
people with bad credit rent apartments


expect for that whole real estate bubble based on giving loans to noncredit worthy people thing that has destroyed the economy and is likely to keep us in an extended recession for a few years or so


but other than that...

That's some pretty ignorant shit right there. A relative of mine manages a group of apartments and townhouses. They require good credit to be able to rent there. Many people rent because they do not want the responsibility of maintenance that comes with homeownership. They also do not want or need as much space as some houses have. For many of them an apartment is much cheaper than a mortgage, property taxes and maintenance. An apartment is also not a long term comittment.

 

[aceO07]

I'd love to buy if I could. Here's the deal, ~$1k a month rent or $3-4k a month to buy. That makes for a simple choice. Also I'd need a big stack of money before I can buy the privilege of paying $3k a month and taxes.

 

[Kelvrick]

I have good credit, as does my wife. We don't have 40k to put down on a house, so we rent. Current rent for a master bedroom is 600 total, no utilities or anything. We currently have 2 car payments of 450 a month that ends in a year and a half.

People don't come out of college with 10-20% down to buy a house. They gotta live somewhere before they buy.

 

[dlx22]

I've been renting since august of 07 and probably will continue until I find a job that i'm satisfied with.
like others have said about renting-no property tax, no yard maintenance, generally access to a fitness center/pool, something breaks you don't have to fix it, lease terms are generally around a year,

cons: you are throwing the money away, apartment living is only as good as your neighbors and the construction of the building

 

[dlx22]

Originally posted by: Kelvrick
I have good credit, as does my wife. We don't have 40k to put down on a house, so we rent. Current rent for a master bedroom is 600 total, no utilities or anything. We currently have 2 car payments of 450 a month that ends in a year and a half.

People don't come out of college with 10-20% down to buy a house. They gotta live somewhere before they buy.

this, your lucky your rent is so cheap

 

[compuwiz1]

Originally posted by: Kelvrick
I have good credit, as does my wife. We don't have 40k to put down on a house, so we rent. Current rent for a master bedroom is 600 total, no utilities or anything. We currently have 2 car payments of 450 a month that ends in a year and a half.

People don't come out of college with 10-20% down to buy a house. They gotta live somewhere before they buy.

But.....the elitists would have you to believe that you have bad credit and somehow rank lesser because you rent. :roll:

Repeat after me: There is nothing wrong with renting if that's what suits you.

 

[Jeff7]

Originally posted by: G Wizard
in light of the circumstances over the past year, the merits of renting should be apparent, for some.

however, renting is convenient, b/c if something major happens, say, the bottom of the hot water tank gives out and floods your house, you're the one stuck w/ the repair bill. plus tack on insurance + taxes, renting just makes sense for some people.

Exactly.
Some bad stuff that's happened here in the past year or so:
- A tree fell gently on the building, and was left leaning against it. There was no structural damage, but the thing still needed to be removed without crushing the part of the building it was leaning over.
- A highly skilled driver rammed her car into the front of the building, apparently mistaking "Drive" and "Reverse."
- The chimney was leaking water into the one bedroom.

Guess how much the repairs cost me.


No money, and very little aggravation. My landlord got to deal with calling up the tree removal service, and the contractors to deal with the other damages.

What do I come out with at the end of it? I didn't have to live on the streets or in my car for the past year.

 

[IceBergSLiM]

logic regarding renting does not apply outside of the burbs. If your in a city you have to rent unless your a real baller. irregardless of credit.

 

[Baked]

Renting and living w/ other people in an apartment complex is a nightmare, especially if you have children or your neighbors have children.

 

[dartworth]

Originally posted by: FoBoT
i think it comes down to credit

people with good credit buy houses
people with bad credit rent apartments


expect for that whole real estate bubble based on giving loans to noncredit worthy people thing that has destroyed the economy and is likely to keep us in an extended recession for a few years or so


but other than that...

/facepalm