Rent or Buy

jrw1621 wrote: What are your thoughts on the economy? Will buying a house today still be affected by further slumps? To buy into a $200k house I need to write a $20-40k check - which I have and then about $1,300 per month with taxes. To rent at $900 I am out only first and last ($1,800) with $38.2k still in the bank. A commitment to waste $900 per month or a total of $10,800 per year.

Will the value of the house fall by $10,800 or more in the next year? if yes, then rent. If no, then buy.

Is your personal situation volatile enough that you think you need that $38k in the bank to bolster your rainy-day survival potential? if yes, then rent. if no, then buy.

does your loss calculation include the tax benefit you received from paying mortgage interest and property taxes during your time of ownership?

here in detroit, the engineering situation has pretty much recovered from the crash in '08 as far as i can tell. in early '10 i sold the house i bought in '04 and lost $50k. in late '10 i bought a 20% smaller house in a one-step-down neighborhood for nearly 50% less money, and now have a 15-year note that's $100 per month less than the rent i paid on a crappy house in between stints of ownership.

if your industry is stable and you're good at what you do, i say buy.

Buying has the enforced savings benefit built in also.

I am a fan of ownership but that's the Aussie way and its instilled early downunder.

I passed on the rental as of Sunday night. The rental was not something I went looking for but rather a sign I came across in a desirable neighborhood. If I was going to live in this town for less than 5 years I would have rented for sure. Instead, this purchase has the intention of being a long term residence. At 44 we are even shopping like senior citizens, which we will be in a few short years, for features like single level or at least a first floor master.

As far as the shopping goes, I am taking my time and refuse to fall to the hype of the Realtors. There is not really anything on the market right now in my small town that I am interested in. I like the Realtor I am working with and he is doing a good job pointing out the new listings but I can also search this myself through the MSL website.

I feel that I have placed us in a strong position.
My wife was driving 45 minutes from the condo to her job. I was driving about 45 minutes the other way. My job changed and I could be anywhere in Ohio working from the home and the car. In an ironic turn of events I discovered that a friend's father had inherited a home. This 1200sq ft bungalow had not really been lived in for 5 years while his mother was in a nursing home. Basically, the place had the grandma - funk. In exchange for cheap rent, we pulled all the carpets (hardwoods) and my wife and her sisters painted every interior surface to resale beige. Chainsaw needed to tame the shrubs that had grown up over the windows. Basic GRM-home repair and maintenance. Bottom line, $300 rent per month for 3 bed, 1.5 bath, 1 car detatched. It sounds great but it also sits on a major 4 lane road. To get out of the one car wide driveway you back out onto 4 lanes - sucks. The rent price is about equal to what my wife was paying to commute. The best part is she is 1.5 miles from the school she teaches at. All the while, for about 2 years, I continued to pay $1k per month on the condo that I was not living in - also sucked but did not break the personal bank.

Now, the condo is sold.
We are not bound by a lease so we can act quickly but we do not need to go so we can also take our sweet time.
We have credit scores of about 790.
We have real downpayment money!
This I think puts us into a strong buying position.

In my conservative nature, my intentions are to only spend 1x our combined annual salary which is about $160k. Cheap Midwest cost of living helps as well.

Remember it's a buyers market, and foreclosures abound

Then there's this rental prices are rising

Rental rates are rising at a rapid rate. It's the law of supply and demand.

Not to bleed a stone ask friend to apply $200 dollars of rent as a credit towards purchase in case you decide to buy the house . If any knows of anyone in need of housing 55 yrs or above Marie and I have a 14 by 70 trailer in park with porch in Homosassa Florida . Shed and community room . Complete with furniture /washer dryer new carpet . Dogs Ok for sale or rent .Quiet and safe, pub down the street and close to shopping and flea mkt .

Ever seen this website? Zillow.com It's got some data you might like to see as a buyer. It's not completely accurate. What is? But it's still good information to have when checking out homes.

My thoughts are that the economy is about to taking assuming something catastrophic doesn't happen like a new 9/11, bank crisis, etc. Home prices and loan rates are low. Buying now should be a safe bet. But I'm not an economist, investor, etc.

ZILLOW's data is about as wrong as you can get. They are nothing more than a magnet site to get referrals for Realtors and Lenders. If you get anything useful off the site it's coincidental.

They are being sued by the software company because they modified his software so much that the numbers are so inaccurate he can't get anyone else to buy the product.

jrw1621 wrote: I passed on the rental as of Sunday night. The rental was not something I went looking for but rather a sign I came across in a desirable neighborhood. If I was going to live in this town for less than 5 years I would have rented for sure. Instead, this purchase has the intention of being a long term residence. At 44 we are even shopping like senior citizens, which we will be in a few short years, for features like single level or at least a first floor master. As far as the shopping goes, I am taking my time and refuse to fall to the hype of the Realtors. There is not really anything on the market right now in my small town that I am interested in. I like the Realtor I am working with and he is doing a good job pointing out the new listings but I can also search this myself through the MSL website. I feel that I have placed us in a strong position. My wife was driving 45 minutes from the condo to her job. I was driving about 45 minutes the other way. My job changed and I could be anywhere in Ohio working from the home and the car. In an ironic turn of events I discovered that a friend's father had inherited a home. This 1200sq ft bungalow had not really been lived in for 5 years while his mother was in a nursing home. Basically, the place had the grandma - funk. In exchange for cheap rent, we pulled all the carpets (hardwoods) and my wife and her sisters painted every interior surface to resale beige. Chainsaw needed to tame the shrubs that had grown up over the windows. Basic GRM-home repair and maintenance. Bottom line, $300 rent per month for 3 bed, 1.5 bath, 1 car detatched. It sounds great but it also sits on a major 4 lane road. To get out of the one car wide driveway you back out onto 4 lanes - sucks. The rent price is about equal to what my wife was paying to commute. The best part is she is 1.5 miles from the school she teaches at. All the while, for about 2 years, I continued to pay $1k per month on the condo that I was not living in - also sucked but did not break the personal bank. Now, the condo is sold. We are not bound by a lease so we can act quickly but we do not need to go so we can also take our sweet time. We have credit scores of about 790. We have real downpayment money! This I think puts us into a strong buying position. In my conservative nature, my intentions are to only spend 1x our combined annual salary which is about $160k. Cheap Midwest cost of living helps as well.

While I agree that now is a decent time to buy, if you've got $40k in the bank, bring in $160k a year, and have a $300/month rent that you can hang on to for some time, I'd be really tempted to live cheap and bank $100k+ over the next 12-18 months, and then pay cash. Even if this truly is the low point, stuff isn't going to appreciate much in the next year.

Above post "WINNING"

In reply to DILYSI Dave:

Agreed, but. The cheap rent, favor thing has gone a year longer than planned. My good deal is coming to an end, somewhat. The guy that owns it wants out of it soon or at least reasonably soon . I have really just been paying the taxes and the insurance.
I know he would like to sell or at least get something out of it and if I was paying a more market worth of $600 I would rather live somewhere else.

At best, I see saving $2k per month or $24 in the next year.

DILYSI Dave wrote:

jrw1621 wrote: I passed on the rental as of Sunday night. The rental was not something I went looking for but rather a sign I came across in a desirable neighborhood. If I was going to live in this town for less than 5 years I would have rented for sure. Instead, this purchase has the intention of being a long term residence. At 44 we are even shopping like senior citizens, which we will be in a few short years, for features like single level or at least a first floor master. As far as the shopping goes, I am taking my time and refuse to fall to the hype of the Realtors. There is not really anything on the market right now in my small town that I am interested in. I like the Realtor I am working with and he is doing a good job pointing out the new listings but I can also search this myself through the MSL website. I feel that I have placed us in a strong position. My wife was driving 45 minutes from the condo to her job. I was driving about 45 minutes the other way. My job changed and I could be anywhere in Ohio working from the home and the car. In an ironic turn of events I discovered that a friend's father had inherited a home. This 1200sq ft bungalow had not really been lived in for 5 years while his mother was in a nursing home. Basically, the place had the grandma - funk. In exchange for cheap rent, we pulled all the carpets (hardwoods) and my wife and her sisters painted every interior surface to resale beige. Chainsaw needed to tame the shrubs that had grown up over the windows. Basic GRM-home repair and maintenance. Bottom line, $300 rent per month for 3 bed, 1.5 bath, 1 car detatched. It sounds great but it also sits on a major 4 lane road. To get out of the one car wide driveway you back out onto 4 lanes - sucks. The rent price is about equal to what my wife was paying to commute. The best part is she is 1.5 miles from the school she teaches at. All the while, for about 2 years, I continued to pay $1k per month on the condo that I was not living in - also sucked but did not break the personal bank. Now, the condo is sold. We are not bound by a lease so we can act quickly but we do not need to go so we can also take our sweet time. We have credit scores of about 790. We have real downpayment money! This I think puts us into a strong buying position. In my conservative nature, my intentions are to only spend 1x our combined annual salary which is about $160k. Cheap Midwest cost of living helps as well.

While I agree that now is a decent time to buy, if you've got $40k in the bank, bring in $160k a year, and have a $300/month rent that you can hang on to for some time, I'd be really tempted to live cheap and bank $100k+ over the next 12-18 months, and then pay cash. Even if this truly is the low point, stuff isn't going to appreciate much in the next year.

I like this idea. Saves money and gives you more buying power. Especially since it could easily take a year to find the right house anyways.

jrw1621 wrote: In reply to DILYSI Dave: Agreed, but. The cheap rent, favor thing has gone a year longer than planned. My good deal is coming to an end, somewhat. The guy that owns it wants out of it soon or at least reasonably soon . I have really just been paying the taxes and the insurance. I know he would like to sell or at least get something out of it and if I was paying a more market worth of $600 I would rather live somewhere else. At best, I see saving $2k per month or $24 in the next year.

If he had to evict you you could ride it another 6 to 8 months , kids involved a year easy

carguy123 wrote: ZILLOW's data is about as wrong as you can get. They are nothing more than a magnet site to get referrals for Realtors and Lenders. If you get anything useful off the site it's coincidental. They are being sued by the software company because they modified his software so much that the numbers are so inaccurate he can't get anyone else to buy the product.

I agree. Which is why I posted:

Xceler8x said: It's not completely accurate. What is?

Interesting about the lawsuit.

92CelicaHalfTrac wrote: I like this idea. Saves money and gives you more buying power. Especially since it could easily take a year to find the right house anyways.

He's actually found the right house already. Two of them, in fact. One for sale, one for rent - hence the dilemma.