You'll be throwing money away either way. Insurance + Interest + Maintenance. Plus you will rarely if ever get a house as nice as an apartment that costs as much total per month, and there is far less risk of depreciation.
JTsyo
Lifer
- Nov 18, 2007
- 12,038
- 1,135
- 126
As I was looking at houses I noticed that the property tax would be about what we pay for rent. So buying a house would mean, paying what we're already paying plus the mortgage on top of that. But there are many rewards to owning a house other than financial.
Another thing I calculated was that we could save for about 8-9 years and buy a house outright or get a mortgage and spend 30 years paying it off. Of course when we need the room, we'll have to get a house but until then I plan to save up. After a few months I would probably pay a bit quicker if the savings hold up.
Another thing I calculated was that we could save for about 8-9 years and buy a house outright or get a mortgage and spend 30 years paying it off. Of course when we need the room, we'll have to get a house but until then I plan to save up. After a few months I would probably pay a bit quicker if the savings hold up.
I put in my data in that NYT chart and it showed that renting is pretty much always better for me with an average annual savings of $14,000... $900/month rent vs $300,000 home on a single income.
my credit is fine, but saving up thirty grand for a down payment in the near future isn't incomprehensible without moving into my parents basement or something. truthfully, I don't really mind renting. easier on the budget, I don't have to worry about upkeep expenses or home/property maintenance, and if something comes up like a job opportunity on the other side of the planet, there's nothing really holding me down.
if I had a partner with a second income it'd probably be a different story, but as a single, middle-class guy who likes to move every 4-5 years, owning a home isn't something that's really in the stars for me at this point in my life.
my credit is fine, but saving up thirty grand for a down payment in the near future isn't incomprehensible without moving into my parents basement or something. truthfully, I don't really mind renting. easier on the budget, I don't have to worry about upkeep expenses or home/property maintenance, and if something comes up like a job opportunity on the other side of the planet, there's nothing really holding me down.
if I had a partner with a second income it'd probably be a different story, but as a single, middle-class guy who likes to move every 4-5 years, owning a home isn't something that's really in the stars for me at this point in my life.
I find it interesting when people say that renting is like "throwing money away" because you don't get anything at the end. When paying rent, you are paying for the right to live somewhere, be it a house, an apartment, a condo, etc. Just because what you receive for your money isn't tangible does not mean you're not receiving anything.
I pay $250 a month to live in a 3 bedroom townhouse with 2 other people. That's less than the property taxes on most houses...
I'm gonna live here until I save enough for a nice down payment on a house and until I am positive of where I want to live long-term. You'd be stupid to buy a house if you were only gonna live somewhere for a couple years.
I'm gonna live here until I save enough for a nice down payment on a house and until I am positive of where I want to live long-term. You'd be stupid to buy a house if you were only gonna live somewhere for a couple years.
it's also a function of uncertainty and other debt.
i rent now in nyc because i dont really know about my future - well that and i can't afford to buy shit in this city - but i'd like to think uncertainty plays a big role in it. i dont know that i'll be here for like the next 5 years.
i rent now in nyc because i dont really know about my future - well that and i can't afford to buy shit in this city - but i'd like to think uncertainty plays a big role in it. i dont know that i'll be here for like the next 5 years.
Beating a dead horse at this point, but...I rent because:
A) Renting is almost always cheaper in the short term because of closing costs, taxes, and maintenance. In the beginning stages of my career I can't guarantee I'll want to stay in any given place for the 3-5 years it will take to break even on all the expenses. I've already been relocated once by my employer.
B) It's convenient. I don't have to worry about maintenance, repairs, or yardwork. Even pest management is taken care of for me.
A) Renting is almost always cheaper in the short term because of closing costs, taxes, and maintenance. In the beginning stages of my career I can't guarantee I'll want to stay in any given place for the 3-5 years it will take to break even on all the expenses. I've already been relocated once by my employer.
B) It's convenient. I don't have to worry about maintenance, repairs, or yardwork. Even pest management is taken care of for me.
Fayd
Diamond Member
could make that argument about a house.
you live in it and live in it, but at the end of it, all you got is what you put into it. you dont make any money off it. now... if you rented it out, you could make money.
dude, it costs money to live. get over it.
Typically you will not make money on your primary residence if you buy a home, assuming you take a loan out. Between taxes, interest, home upkeep, and insurance what you sell for will most likely equal what you put into the house, if you stay long term.
Of course the last decade or so with the bubble, it seems everyone was making money.
- Jan 21, 2005
- 17,722
- 6
- 81
Thanks a lot guys... It makes a lot more sense now to rent, especially because I am only 22 and will be done with college in a year.
People with bad credit rent apartments? That's ridiculously stupid logic. Maybe you should come out of those corn and soybean fields in the midwest and try buying a house in some parts of California where houses are $350-500 a square foot. The only people around here my age who have houses are people who are married and have two incomes or people whose parents give them everything.
I rented for 4 years during college, and since have rented 4 different places in the last 2.5 years. I plan to keep renting for the next 5 years. Why? Because I am never satisfied with where I live. I love to move and get new scenery. I'll buy a house when im in my 30s and have a kid.
If you have a down payment saved up and are sure you are staying in an area for 3.5-4 years, then it makes sense to buy.
DrPizza
Administrator Elite Member Goat Whisperer
If you search online, there's a calculator that will help decide which is better in your circumstances - renting or purchasing. You, of course, have to make some assumptions, but it will give you the number of years until you break even on purchasing.
However, that calculator looks at it only from a financial perspective. Each individual has to weigh the merits of the advantages and disadvantages of either situation. There was a thread here recently about what a pain in the neck it was going to be for someone to move their computer to another room - no outlet for the cable (or cat 5e, or whatever it was.) I, for instance, would hate the lack of control over my surroundings. If my drain backs up, furnace stops working, I have electrical problems, or any of a myriad of other "headaches" associated with home ownership happened to me, I'd MUCH rather have the first crack at fixing the problem and dealing with it myself than have some other person contracted to come in and fix it for me. i.e. home ownership provides a hobby for those so inclined. My wife loves the freedom that comes with walking through a home improvement type of store, seeing a wallpaper she really likes, and deciding to re-wallpaper the dining room or something. So, even if we were coming out slightly behind financially, those benefits have a value to us.
Compare that to a guy I used to work with. He couldn't even hand a knick-knack shelf in his house. Not because he didn't want to - because he couldn't have figured out how to do it. His son was even worse - he allegedly put up a shelf in his kitchen - a heavy shelf that was loaded with heavy materials (albeit momentarily) - with one finishing nail. It didn't end well. Having someone else completely responsible for their living quarters was a perfect arrangement.
However, that calculator looks at it only from a financial perspective. Each individual has to weigh the merits of the advantages and disadvantages of either situation. There was a thread here recently about what a pain in the neck it was going to be for someone to move their computer to another room - no outlet for the cable (or cat 5e, or whatever it was.) I, for instance, would hate the lack of control over my surroundings. If my drain backs up, furnace stops working, I have electrical problems, or any of a myriad of other "headaches" associated with home ownership happened to me, I'd MUCH rather have the first crack at fixing the problem and dealing with it myself than have some other person contracted to come in and fix it for me. i.e. home ownership provides a hobby for those so inclined. My wife loves the freedom that comes with walking through a home improvement type of store, seeing a wallpaper she really likes, and deciding to re-wallpaper the dining room or something. So, even if we were coming out slightly behind financially, those benefits have a value to us.
Compare that to a guy I used to work with. He couldn't even hand a knick-knack shelf in his house. Not because he didn't want to - because he couldn't have figured out how to do it. His son was even worse - he allegedly put up a shelf in his kitchen - a heavy shelf that was loaded with heavy materials (albeit momentarily) - with one finishing nail. It didn't end well. Having someone else completely responsible for their living quarters was a perfect arrangement.
indeed. ultimately id like to own again, but i had an apartment for a while and not having to deal with anything was so, soooooooo nice.
/and i hate yardwork
I'm living in Phoenix now. The market is dropping out of the sky. Really glad I don't own anything here. I hate to move furniture around (sold most of mine when leaving grad school, stored the rest at parents), doing any sort of home repair seems to be just a huge waste of time.
You pay money to eat food. In the end you shit it out. Shelter is a need first, investment second. If you can afford to invest, you get a 2 for 1. If you can't, then you just get a place you can live. Just because you don't get something material doesn't mean you don't get anything at all. By living in an apartment, even though you do not obtain ownership of property, you still gain in a certain level of sustained living quality (ie not being homeless). This living quality offers security in your environment, and the ability to live comfortably.
Gooberlx2
Lifer
- May 4, 2001
- 15,381
- 6
- 91
I've always seen the cost per sqft as much higher when renting. Like Icebergslim mentioned, these scenarios get twisted and broken when living inside a big city. Where I'm living, however, I absolutely get more house/sqft per dollar with my mortgage vs what I would renting.
Red Squirrel
No Lifer
That's the logic I go by as well. I'm 22, I *could* be living in an apartment instead of with my parents, but why throw away money when I can sacrifice 1-2 years of staying at home and pickup enough money for a house? In the end it will be well worth it.
Gooberlx2
Lifer
- May 4, 2001
- 15,381
- 6
- 91
Originally posted by: Tiamat
Originally posted by: Gooberlx2
But that mortgage starts after a 60,000$ lump sum... so when you factor that it, apartment living is much better sqft/dollar.
3% down FHA here. ~$7K out of pocket. Obviously it depends on many factors for different people, and it'll still take a few years for me to break even (assuming the house's value doesn't fall) with downpayment + a higher mortgage payment vs my rent at the time. But, in my case, I have about 200% more space with 35% more monthly payment vs what I was getting when renting.
Originally posted by: Gooberlx2
Originally posted by: Tiamat
Originally posted by: Gooberlx2
But that mortgage starts after a 60,000$ lump sum... so when you factor that it, apartment living is much better sqft/dollar.
3% down FHA here. ~$7K out of pocket. Obviously it depends on many factors, and it'll still take a few years for me to break even (assuming the house's value doesn't fall) with downpayment + a higher mortgage payment vs my rent at the time. But, in my case, I have about 200% more space with 35% more monthly payment vs what I was getting when renting.
I realized that different people have different downpayment structures, so I deleted my post. Here in Boston, the downpayment is 60-120k (20%). I can't afford that, my parents live in upstate NY, so I have no choice but to go apartment.
Ill probably be renting for at least 3-5 more years before I can afford a downpayment.
In Boston, a 1 br apartment goes for 1200-1500$ per month. Mortgage would run 2500$ per month on similar sqft and quality.
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