someone break my logic about apartments

[BoberFett]

Too many variables to say unequivocally that one is better than the other.

My wife and I have lived in our house for the past 5 years mortgage free. Let me tell you, it's nice. We're going to buy a new place and then sell our current home because we want more space. I had trouble finding an apartment with 2800sqft where I could crank up my home theater as late as I wanted without angering the neighbors, especially for $2000 a month.

It really depends on what you want, and how long you plan to stay where you are.

 

[BoberFett]

Originally posted by: Quintox
Condos FTW

I'd never live in a condo. I don't want shared walls.

 

[Gooberlx2]

Originally posted by: Tiamat

Originally posted by: Gooberlx2

Originally posted by: Tiamat

Originally posted by: Gooberlx2

Originally posted by: torpid
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.

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.

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.

Yeah, the price advantage wouldn't be anything like I have now if I lived in/around downtown Denver.

 

[Red Squirrel]

Originally posted by: BoberFett

Originally posted by: Quintox
Condos FTW

I'd never live in a condo. I don't want shared walls.

You'll get shared walls in an apartment too, depending on how it's setup.

The good thing about a condo is that you actually own that part of the building so you can resell it later. But you don't own the property so you can't do stuff like build a shed, garage, pool, wind turbine, or whatever else you could if you owned it.

 

[Old Hippie]

I've never wanted a house and never bought one.

It was always well within my monetary means but I felt renting and the freedom from maintenance that it brings, was just another cost of my semi-hedonistic lifestyle.

I'm sure it cost me more in the long run but I've never enjoyed home repairs/improvements or lawn work.

 

[her209]

Do houses appreciate more than the interest that is paid on them?

 

[Gooberlx2]

Originally posted by: her209
Do houses appreciate more than the interest that is paid on them?

Historically, yes. Right now? Not so much.

 

[Gibson486]

Lets see....

it is dependent on the market....

as a person right out of college...


house = 300,000 - 30,000 due at signing....loan = more than 2K a month.

rent = 1K a month...just double rent due at signing.

 

[Gibson486]

Originally posted by: Tiamat

Originally posted by: Gooberlx2

Originally posted by: Tiamat

Originally posted by: Gooberlx2

Originally posted by: torpid
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.

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.

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.

you are wrong....in boston a 1 BR runs atleast $1600 a month now and even finding that is hard. I am looking to move back from Natick, but dam, i cannot afford it. It's amazing...just 2.5 years ago I rented a unit in back bay for $1275...now that same unit has just hit the market for $1685. To live in a city like Boston requires you to really make bank (or have rich parents). lYou'd think that the bad economy would make rent less, but man, even the areas surrounding Boston have hit Boston prices. I mean, WTF! Renting in MA now cost the same as buying a house if you have the money for the down payment!

 

[duragezic]

Originally posted by: Aikouka

Originally posted by: compuwiz1
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.

I had to have a credit check run and bring in a paycheck before they'd let me rent my current apartment.

Yep. Er wait, that's cause we live in the same place. Actually they had some thing about needing a paycheck for a few months, so I actually had to give them my offer letter. They also have requirements on that the monthly rent has to be a certain % or less of your monthly income. Same thing with your current debt (I'm guessing my student loans don't apply there).

The apartment complex is nice but certainly not extravagant, so I'd have to imagine that a fair number of managed apartments have similar requirements.

 

[vi edit]

Originally posted by: her209
Do houses appreciate more than the interest that is paid on them?

It's not just appreciation vs. interest.

It's the fact that you lock in a rate for potentially 30 years(not counting insurance and taxes). Can you do that with rent?

 

[krunchykrome]

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...

it also has to do with income, and priorities. Some people don't make enough to own a home, and some people would rather buy expensive cars an expensive clothing

 

[TridenT]

Maybe you rent because you cannot afford a house or don't know how long you are going to be in the area...

 

[rgwalt]

Originally posted by: 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

Actually, you do pay 1 & 2, it is figured into your lease. On 2, you don't get to take a property tax deduction (or an home loan interest deduction) on your federal taxes... someone else (your landlord) gets to take those. Home mortgage interest and property tax deductions are some of the very few really good deductions the average Joe gets from Uncle Sam. I'm game for letting the government fund 28% of my interest and property tax payments.

It is not always cheaper to rent than to own. It depends on the going rate of rent in your area compared to cost of a similar home. The key here is the term "similar". You can always find a shitty, old 1 room apartment and compare it to a lavish house and say "See, renting is so much cheaper than owning that house!" Likewise you could find a lavish multi-room high-end apartment (they are fairly common these days) and compare it to a shitty, old, tiny home and expound on how much cheaper it is to own than rent. I could own a home with approximately the same square footage as my two bedroom apartment and pay less per month for the loan and property taxes than I'm paying in rent currently. Plus, the home would be much "nicer" than my apartment. The trouble is that few people want to buy a 1000 sq foot, 2 bedroom condo. It isn't universally appealing.

As far as the money being "wasted" on renting... a roof over your head isn't free. It costs money to live in an enclosed space, whether you own it or someone else does.

 

[rgwalt]

Originally posted by: loki8481
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.

Does your $900/month rent get you the same size/quality of place as the $300K home? If not, you are comparing apples to oranges. Those calculators are useful, but you have to keep in mind the cost per square foot of the apartment you rent versus the home you actually buy in terms of what it costs you to live there per month. Then you need to figure in the value of the furnishing/amenities you get in the home over the apartment (or vice versa), and also assign value to the portion of your lease that goes for upkeep, etc.

 

[nageov3t]

some people like apples

my apartment is a little smaller than I'd like it to be, but a house would be way more space than I could use. my next move will probably be into either a one bedroom with a gigantic living room if I can find out (my ideal), a two-bedroom, or a townhouse (if I can find one that I can afford).

unless my math sucks, I'm paying about $1.20 per sq/ft... a typical house in a near-by area that's not as nice as where I live would be significantly more.

 

[thomsbrain]

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...

Or rather, people with good credit, $100,000 in cash, and two incomes per household buy houses. My credit score is over 800 but I couldn't buy ANYTHING in my area.

 

[Tiamat]

Originally posted by: Gibson486

Originally posted by: Tiamat

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.

you are wrong....in boston a 1 BR runs atleast $1600 a month now and even finding that is hard. I am looking to move back from Natick, but dam, i cannot afford it. It's amazing...just 2.5 years ago I rented a unit in back bay for $1275...now that same unit has just hit the market for $1685. To live in a city like Boston requires you to really make bank (or have rich parents). lYou'd think that the bad economy would make rent less, but man, even the areas surrounding Boston have hit Boston prices. I mean, WTF! Renting in MA now cost the same as buying a house if you have the money for the down payment!

Depends where you look. I can find 1BR going for 3k$ as well...

In allston, the price is closer to 1200$, in the very modern places, closer to 3k$.

For the mortgage that typically runs 2500$ per month, this compares to 1BR that goes for 1200-1500$ per month. For 1BR apt of 3k$ per month, the mortgage runs beyond 4-5k$ per month.

 

[krunchykrome]

Originally posted by: BoberFett

Originally posted by: Quintox
Condos FTW

I'd never live in a condo. I don't want shared walls.

purchase for an apartment? well I guess it's better than renting one

 

[waggy]

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 is so wrong its not even funny.


IF you are going to stay in one place for more then a few years sure get a house (IF you want!).

with a house you have mortgage, insurance, tax's and upkeep. not to mention you need to buy stuff for upkeep. the positive is you own the place, can do what you want to it (within law), it should (you hope) go up in value.

with a apartment you have neighbors attached, little to no parking, etc. but the postives are great. no upkeep and far cheaper!


good thing about a apartment is its cheaper to break a lease and move then worry about trying to sale the house etc.

 

[Riverhound777]

I rent because of the housing costs in my area. Rent here is expensive (paying $765 to rent a room in a 3-bd house) but houses cost anywhere from 500k(for shit) to 1.2mill for a nice 4bd house. Even if I had 100k saved up, i'd be hard pressed to buy a house here(Santa Barbara, CA).

 

[rasczak]

Originally posted by: 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.

If you are looking to buy a 3-4k a month property, while equating that to 1k a month rent, then you would be living WAAAAAY beyond your means. There are plenty of good homes out there for rougly 1 - 1.5k a month.

 

[Saint Nick]

The rent here in Omaha is pretty cheap compared to where some of you guys are saying. There are 1 bedrooms in our downtown for $500/600 a month. 2 bedrooms for $900.

 

[nageov3t]

Originally posted by: rasczak

Originally posted by: 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.

If you are looking to buy a 3-4k a month property, while equating that to 1k a month rent, then you would be living WAAAAAY beyond your means. There are plenty of good homes out there for rougly 1 - 1.5k a month.

depending on the area, it doesn't seem that far fetched.

 

[Demon-Xanth]

It depends on the cost of housing compared to the cost of renting and the duration you plan to stay there. Three years ago, renting made sense. A condo would've run me $1700/mo to own but an apartment was $700. Didn't make sense to get into the condo. I could take the extra $1000/mo and do something useful with it.

Now, I have a $1300 mortgage on a house, and the apartments are $750. Buying makes a lot more sense.

If you're in a place where the cost of buying=renting, then it comes down to maintenance and how long you plan on being there. If you're going to be there for a few years and move somewhere else, just rent. If you plan on doing zero maintenance at all, please for the love of god, either hire someone to do it or rent from someone that will do it.