Why I rent after owning and thankfully....

[Aviation Pro]

...selling three houses in the past 20 years.

Simple, economics. I just refuse to pay over the course of thirty years three times the original mortgage and that's just the tip of the iceberg. When the elite talks with great rapture about the joy of owning a home they fail to mention the maintenance costs, the taxes, the insurance and the other incidentals that go into home ownership. (They, as elites, have no clue about these tie downs since, being elites, they pay for their outsized mansions in cash or use sweetheart deals with their banks, feh). Owning a home is economic slavery to the vast majority of home owners as they shell out - in my particular case and I'll use this as a base - 40% to 50% of their gross income toward servicing their house. (This suits the elite just fine because it keeps people in line).

As a renter, and as a prudent steward of my economy, I pay less than 15% of my net income towards housing, the money that I don't use servicing a house is saved Since I eschew luxuries with great disdain (and still live a robust life), I can save for my children's education, save for my retirement, and take care of the valuable things in life rather than the things that accumulate (also known as clutter).

Finally, renters represent about 32% of households (source here) and yet are treated like red-headed step children by the elite (again, the elite like slaves, renters have more freedom of movement than homeowners). This is a sizeable voting bloc and should be used as such. I urge the blogsphere to start using its influence to start considering renters as better economic bets than homeowners.

[Subdivisions]

1. And also, if the hot water heater, AC, or plumbing goes bad,

we don't have to pay for it. Our landlord does.

Because I refused to be drawn into a McMansion sweetheart deal, suspecting it was too good to be true, I have absolutely NO debt.

[pitohui]

16. talk about living in a dream world

i used to rent, far from if something went bad, the landlord fixed it, if something went bad, the reality was that either we fixed it or we would have to do without

my house is paid for, and i can see by running the numbers that what i paid in mortgage, interest, and so on turned out to be about 12 years worth of rent -- and rents still keep going up -- yikes! people rent around here because they have terrible credit or some kind of difficult mental or health problem that keeps them from getting it together financially even a little bit -- and, as always in the real world, it just plain costs more to be poor


what will people do in old age after a lifetime of renting? they will have to pay ever higher rents, that go up every year or so, while the person who bought a home and paid it off (even if it took her the whole 30 years of paying it off which it shouldn't in the reasonable louisiana or texas real estate market) no longer has that huge financial obligation

when we're both drawing $1,800 a month in social security, but i don't have any rent/house note and half or more of your income is going just to the rent, what kind of life are you going to have when you get sick? and we're all going to get older one day, that's pretty much the only known we have, is that we're either guaranteed to be older or to be dead, there is no option where we stay young and at the top of our earning abilities forever

i can't believe the crazy rents people are paying around here nowadays, if you have a huge income, well, good for you, but most renters are putting themselves in a terrible situation -- the day never comes when they have a paid off home they can either live in, or if need be get a reverse mortgage or sell for cash -- all they have is a hole in their pocket where the money used to be

i don't necessarily blame the fox for saying the grapes are sour, i am sure there is a sad story why you lost your home, but let's not kid ourselves that this is a wise or prudent choice for people who hope to retire one day

[Subdivisions]

95. Well, let's see...

"i used to rent, far from if something went bad, the landlord fixed it, if something went bad, the reality was that either we fixed it or we would have to do without"

My property management company needs only to have a problem reported in order to fix it. We live in a nice apartment complex and we've had absolutely no problems. But, if we did, they would be tended to immediately.

"my house is paid for, and i can see by running the numbers that what i paid in mortgage, interest, and so on turned out to be about 12 years worth of rent -- and rents still keep going up -- yikes! people rent around here because they have terrible credit or some kind of difficult mental or health problem that keeps them from getting it together financially even a little bit -- and, as always in the real world, it just plain costs more to be poor"

I ran some numbers too. We pay $700 per month for a two bedroom apartment with all the amenities. If we were buying a $300,000 home (you know, one worth having), it would take 30 years to pay off. But we can continue to pay rent for another 6 years and that's doesn't include interest on the home. In other words, we are saving money, 6 years' worth, on payments vs. rent PLUS we have no maintenance costs. And, your blanket assertion that people who rent have bad credit is elitist and classist stereotyping of people who choose not to be enslaved by a credit system.

"what will people do in old age after a lifetime of renting? they will have to pay ever higher rents, that go up every year or so, while the person who bought a home and paid it off (even if it took her the whole 30 years of paying it off which it shouldn't in the reasonable louisiana or texas real estate market) no longer has that huge financial obligation"

Nope. In my case, I already know that I will be getting my parents home, which is paid for.

"when we're both drawing $1,800 a month in social security, but i don't have any rent/house note and half or more of your income is going just to the rent, what kind of life are you going to have when you get sick? and we're all going to get older one day, that's pretty much the only known we have, is that we're either guaranteed to be older or to be dead, there is no option where we stay young and at the top of our earning abilities forever"

Wrong again. If I make it to that point and beyond, the nature of the way in which I earn my living will still enable me to continue earning until I die - unless I get ill and can no longer work, at which point social security will cushion the blow to my finances. I am also vested in my union retirement plan as well as 401k. It is actually more difficult today to live and pay the bills that it will be when I am old and, perhaps, ill.

"i can't believe the crazy rents people are paying around here nowadays, if you have a huge income, well, good for you, but most renters are putting themselves in a terrible situation -- the day never comes when they have a paid off home they can either live in, or if need be get a reverse mortgage or sell for cash -- all they have is a hole in their pocket where the money used to be"

There are plenty of rent levels people can choose from based on what they are able to afford. And, you're right. I will never, as far as I know right now, see the day that I pay off a home. In the meantime, I have a completely comfortable, stress- and insurance payments-free, gated and secure place to keep my stuff and lay my head at night. And, if I want to go live in Virginia or the Virgin Islands, all I have to do is pack my stuff and go. No working around selling the house and all that goes with it. As for reverse mortgage, perhaps you got me on that one. But I'm fairly resourceful and I don't see that changing with age as long as I am healthy.

"i don't necessarily blame the fox for saying the grapes are sour, i am sure there is a sad story why you lost your home, but let's not kid ourselves that this is a wise or prudent choice for people who hope to retire one day"

I'm guessin the fox and the grape thing is a fable I'm not familiar with, but nowhere did I say I lost my home due to a "sad story". I've never "lost" a home. As for retiremnt, I'm technically already there at 44.

[Fireweed247]

155. "Nope. In my case, I already know that I will be getting my parents home, which is paid for. "

Good thing they weren't just renting eh?

[Subdivisions]

157. Well, they rented for ten years until my dad got a settlement

from KBR. He was a quality assurance inspector and, after KBR failed his inspection of 300 feet of steam pipe at a nuclear power plant, they fired him for not falsifying his report to pass the welds (which were pitted).

So, he bought a house. And some other stuff too.

[Fireweed247]

159. Was this in the US?

That is dangerously (sort of) hilarious.

[Subdivisions]

162. Yes it was in the US. Right here in TX. And I live near that nuke plant. In fact,

it provides the electricty that powers my computer.

Gee, I wonder how much they got away with out there.

[lukasahero]

161. "We pay $700 per month for a two bedroom apartment with all the amenities."

Are you serious? I paid $200/month more than that for a one-bedroom in 1999! Chances are slim to none that you could even find an apt for that price here in New England let alone want to live in it if you did.

Most telling statement in all that you've written: "Nope. In my case, I already know that I will be getting my parents home, which is paid for." Must be nice to have your cake and eat it too.

[Subdivisions]

163. "Must be nice to have your cake and eat it too."

That sounds heavily sarcastic. Why is that? Is there no one you know who will inherit their parents' estate? Am I too feel shame for being one who will?

Besides, you make it sound as if I don't buy my own house because I'll get my parents' home. That would be a bad assumption. The decision that I would get their home was made just months ago. It was to go to my brother, but he fucked that up a couple years ago.

[Prophet 451]

134. Depends on the landlord

I've had both kinds, the scumbags you're talking about and good ones. My current landlord is fantastic. I rent because some stupid mistakes in my younger years mean I can't get a mortgage. The chances of me living to retirement age are nil anyway.

[bettyellen]

148. and when you're old and need 24 hour care - they'll take your house to pay for

the nursing home. unless you defraud the govt, that's how it works.
you never really own anything, ashes to ashes.

[Matariki]

151. Do you honestly think you're NOT paying for the maintenance of your rental?

I don't suppose I could interest you in the rental of a bridge...?

[Subdivisions]

164. Well, duhhhh! What a stupid fucking thing to say. n/t

[Matariki]

168. "we don't have to pay for it. Our landlord does" - that's what YOU said

so 'duh' yourself, sucker.

[high density]

166. Yeah the economics for renting works out well for me

The lawn is mowed in the summer and the snow plowed in the winter. When something bad happens it's not my problem. We had a tree blow over the other day, and fixing it was as easy as calling up the landlord to let him know. I fix small problems that I can by myself but I'm not afraid to call them up either. So far I think it's averaged out to less than two calls a year.

If a landlord doesn't react to issues then it's time to find another place to live. I am confident there are more good landlords out there than bad ones. Otherwise it seems like they'd just have a revolving door of tenants at the end of the lease, and that messes up their bottom line (advertising, empty units, the time of showing the unit, etc.)

[Fridays Child]

2. Mitch Hedberg pretty much nailed it when he said...

"I need to go to the Apartment Depot. Which is just a big warehouse with a whole lot of people standing around saying 'We don't have to fix anything.'"

[Aviation Pro]

4. Excellent....

....

[Subdivisions]

5. Right on! n/t

[Fireweed247]

156. Buy a piece of land- build your own home

Freedom to live a life instead of living to pay for your home you never spend time in.

[pitohui]

19. sounds like somebody who doesn't live in the real world

who are these landlords who actually fix things? because i rented for about 15 years and never met one

[Aviation Pro]

22. Again....

...renting from a homeowner is the worst of all possible situations. If you're lucky, the homeowner contracts to a management company that services the house, condo, etc. and takes care of maintenance and other home issues. More than likely, because of the fee, most homeowners opt to "do it themselves" and they are woefully inadequate to take care of the job.

The voting bloc solution would force developers to build apartment and housing complexes that would meet the needs of renters without the headache of dealing with homeowners with visions of being real estate magnates.

[pitohui]

33. yeah i've had some dealings with those management companies

plenty of them are just as expert at not doing anything

[raccoon]

154. Amen/Ramen to that!

" Again....
...renting from a homeowner is the worst of all possible situations. "

Not only that, they bitch, moan and groan that YOU tore something up, when in reality whatever it was was older than dirt, needed to be replaced ages ago, etc.

They want the rent but don't want to spend jack on maintenance. It doesn't work that way.

[paparush]

47. I'm a landlord and I bust my ass for my tenants.

We have two rental properties that we own free and clear. The rent pays the mortgage on the house we live in. I work my tail off for my tenants. I work full time, but if I get a call, I'm there.

[CrispyQ]

101. Good for you!

You are a rare landlord, in my experience.

:thumbsup: :thumbsup:

I've never understood landlords that didn't want to maintain their property. Why wouldn't you want to get things fixed & have happy tenants as opposed to disgruntled ones that might do damage to your units in retaliation? There are a lot of just plain cheap bastards out there.

[paparush]

103. I will say this - we are very discerning about who we rent to. I interiew a potential renter

personally. They know up front what we expect of them, and they know what they can expect from us. We've had very good tenants who take care of, and in some cases, actually improve the property.

Its a win win! :-)

[CrispyQ]

99. I worked for a man who owned a construction company.

He also had a slew of rentals -- approx 20. He was making good money on his construction company. About half of his rentals he had owned for over 10 years, so the rental fee was more than covering the mortgage. The other half were units he had bought more recently, so he was breaking even on the rent vs. mortgage payment, but with taxes & insurance he was not making money. He didn't gouge any of his renters for rent, but he used that as an excuse to not fix anything.

It was an awful job. I dreaded answering the phone because so often it was a renter who had something that needed repairing & he would drag his feet for weeks, sometimes months, before fixing anything. They would call & call & call & very often get belligerent with me. I didn't blame them when they got mad at me, but I finally quit. He asked me, "Why am I losing the best office manager I ever had?" I told him, "Because you won't take care of your rental units & I'm sick of eating shit for you."

When I was a renter I had better luck with places that were managed by a property management company as opposed to the person who owned the property.

[Left coast liberal]

106. You're right. I am a property manager for a living and one of the good ones...

I actually get things done promptly and have very good repoire with tenants. But, the reason why I am so busy is because most are not like that.

If you have found a good rental thing then more power to you. But, what happens when the owner of your apartment building sells or changes hands. Hopefully you get another respectful owner or property manager who maintains the property. But, if it doesn't work out then the onus is on you to move on.

I guess I like the assurance of consistency with owning a house for myself, my kids. If I want to sell or fix it up - I can. Yes, it costs a lot to maintain a house but there are considerable tax benefits too.

So, there is certainly room for all of us: renters or home-owners.

Live and let live.

[Pharaoh]

114. around here.....

if they don't fix stuff you can just legally withold rent..........you'd be suprised how fast things get fixed then.

[TroubleMan]

116. I've been renting all my life, and never had a problem with landlords.

Every landlord I've had fixes stuff promptly or close to promptly. The one I have now, the association has to fix all the stuff. We make a call to the landlord, he calls the association, and the repairman is out here the next day.

[galledgoblin]

142. same here

although bigger but unimportant fixes (improvements) take awhile... it's an old building with a number of issues, so fixes to FIX something get priority.

[tavalon]

125. My landlord got notified of a leaky hot qwater heater last Tuesday

We had a new water heater on Wednesday. I'm actually renting a house. Now, that's the upside. The downside is that a foreclosure notice was put up on the house two days ago.

I owned once and I got in over my head and ended up in foreclosure. I have to say it's a lot less stressful when it happens to my landlord.

People say I'm throwing money away in rent and they may just be, but I don't care to have the stress of ownership anymore.

[Guy Whitey Corngood]

165. In the real world there are these things called "leases".

In them there are all kinds of stipulations as to what the tenant and the landlord are responsible for. I just sgned one of those thnigs 2 months ago. If the landlord were to try to get cute you put that money on "Escrow" (which is another term used our fantasy world).

[BlooInBloo]

75. I love rice!

It's perfect for those times when you want 500 of the same thing.

:rofl:

I'm soooo glad I got to see him 2x before he kicked the bucket. Fucking hilarious drunkard of a comedian.

[Sheets of Easter]

147. ....

:rofl:

Loved Mitch Hedberg! He is missed...

[tulsakatz]

3. I'm a renter too..........

although I've never owned a house, I've always wanted to. I never even considered the other expenses.......thanks for explaining that.

Another good point about renting, I live in an apt and whenever anything breaks, I just call someone to fix it!! No charge!! I like that part....

[Warpy]

6. Renting can make sense in some markets

especially urban markets where ownership means a condominium which combines the worst aspects of ownership with the worst aspects of renting, plus a monthly hit to the bank account two to three times the cost of rent when all fees are added in. Some renters have found themselves holding the bag if they're renting a house or condo and the owners have defaulted on the mortgage, though, so it pays to know who your landlord is and have enough money stashed away to get another place fast if need be.

Renting also makes more sense for people who are likely to move in less than five years, which means most working folks.

Ownership makes sense in markets that didn't see the price bubble and where rentals are scarce and/or with rising rent.

Feeling free to paint the walls purple and the ceiling black is overrated and certainly no reason to buy a house. Buying a modest place with a fixed mortgage as a hedge against rapidly rising rent is a good reason to buy a house.

I bought a shabby fixer 12 years ago and was at the break even point between mortgage and rent within 2 years.

[grasswire]

7. in order to pay only 15 percent of income toward rent...

...in the town I live in, our income would need to be six times what it is. We pay about 45 percent of our income for rent. So please keep in mind that not everyone lives in an area with reasonable housing, or has a small family that allows a small dwelling. Yes, we could cram three adults and two big lanky teenagers into a tiny apartment for less. But until the teens are on their own, we get along much better in this three-generation family when everyone can have a little privacy and that means four bedrooms.

[Aviation Pro]

12. Four bedroom apartments in Denver....

...are rare to non-existent. Renting a house is never a bargain (I know one homeowner who forces his renter to cut the grass to the homeowner's specifications or hire a service). This is the reason why renters should use their collective voting power to drive the elite to build apartments or other suitable housing to fit large families such as yours.

[intheflow]

119. Four bedroom apartments in Denver are hard to find, yes.

But four bedroom houses are easy enough to find and rent.

Also, you're really lucky to only pay 15% of your net income on rent. According to the 2000 census report, the median gross rent paid as percentage of household income was over 25%. I believe that percentage has gone up since 2000. Urban areas are becoming gentrified by people now fleeing the burbs due to high commute costs driving up the costs of rent, and no doubt recent foreclosure rates are having a huge effect on available rental housing, making the market more competitive and the rents rising according to the market forces. In places where disasters have hit (hurricanes, floods, and fires), available, affordable rental units were lost in the disaster, again making the rental market highly competitive and subject to extreme shifts toward higher rents. No where in the country is reporting higher wages to compensate for higher rental costs. Grossly under-employed that I am, I am only surviving in the Denver rental market by relying on financial help from a friend. If I didn't have his help, my rent would be 80% of my net monthly monetary intake--and believe me, I do not live in a fancy place.

I owned a house in the past and in spite of the taxes and the plumbing (or whatever) problems, it was well worth it for me to not have to rely on a landlord when the roof leaked, the house became infested with mice, or the garage door-opener broke. If you have a good landlord renting is ok, but if you have a non-responsive landlord, it can be a nightmare. Another thing about owning as opposed to renting is that you can be foreclosed on if you don't pay your mortgage, but you won't ever have a bank telling you you have to move because they're selling the house/wants to rent to friends/wants to demolish it to build condos in spite of your having paid the rent faithfully every month for years. Nor will you ever have your mortgage doubled (assuming you get a fixed rate mortgage), but a landlord can do that anytime his little heart desires.

[rucky]

8. But renting has it's disadvantages, too.

You're paying for someone else's mortgage, maintenance, taxes & insurance. They're not losing money on you.

You're not building equity or getting the tax break on the interest paid. Granted, if you wouldn't benefit much from a tax break it seems insane to pay so much in interest. If you could invest a chunk of your income other ways, you are avoiding alot of the headaches involved with home ownership.

[Aviation Pro]

14. Take a look at how a municipality....

...assesses houses and you'll see that single homeowners never make out (it is an urban myth that renters pay for all the mortgage costs because homeowners cannot charge that much when confronted with the overall cost of renting in a local area).

[uncle ray]

18. equity isn't much of an advantage

when you lose your home to foreclosure. all that money you thought was yours goes in the pocket of your mortgage company. or when housing prices tank and you are left owing more than the house is worth, that equity is meaningless, it might not as well exist.

[rucky]

25. Equity can disappear as easily as it appears.

Just like any other risk-based investment. The way I figure it, if you're going to invest, it may as well be in something you can use. Everybody's gotta live somewhere.

[dysfunctional press]

62. if you can't make a mortgage payment to save your house- how do you intend to pay rent elsewhere...?

equity isn't meaningless. not by a long shot.

[Aviation Pro]

70. Can you eat equity?

Not a pithy question. Again, what worked for you worked for you.

[dysfunctional press]

76. no. can you eat rent?

:eyes:

but if you could- i'm guessing that equity would be A LOT tastier.

[Aviation Pro]

84. No....

...but I can eat what would have gone into the maintenance of the house, the taxes, and the other incidentals that go into homeownership.

Remember, I've been there, done that and have the t-shirt.

[dysfunctional press]

91. and i can take out a home-equity line of credit and buy food.

(psst- let me tell you a secret, coming from when i was a landlord- when you're a tenant, you ARE paying for the maintenance, taxes, and other incidentals that go into renting a unit. and the REAL beauty of that is that since the landlord does the actual writing of the check for those expenses- HE'S the one that gets to claim the sums on his income taxes as an 'expense'...:hi: )

[noamnety]

94. On top of that, you pay more for the maintenance many times as a renter

as a homeowner, you have the choice to do the repairs yourself or call a repairman.

If you do it yourself, generally you can do it for a fraction of the cost. If you rent, often your lease forbids you from tackling repairs. So the cost you have to absorb in rent increases not only pays for profit for the landlord, but also includes surplus for profit for the maintenance people.

If I can fix my dishwasher with a $15 dollar part and some sweat, that's a cheap repair. If it's an apartment, I call the landlord, they call a repair guy, it's probably going to be $50-100 for a simple repair, and that's eventually paid for by me, one way or another.

[dysfunctional press]

98. the only time i had a contractor/repairman do any work on my two-flat it was to replace the roof.

everything else i did/do myself. having formerly been in the construction trades really pays off sometimes.

[Crazy Dave]

9. I've come to the same conclusion recently

And I even own my home, no mortgage. Just the property taxes, city fees (they call them fees instead of taxes) and the homeowners insurance costs me $360 a month alone.

That's not counting the wood deck I need to replace (estimated at $1900) or the $9000 metal roof I had to put on three years ago, etc.

[gateley]

10. I agree - it's freedom compared to owning. nt

[flashl]

11. Great points. nt

[Texasgal]

13. I'm with ya!

My husband and I sold our home last year after being caught up in an ARM. Nobody would re-finance us because our what we owed and the value of our house was at 90%.

So... screw them! We sold... our house was on the market SIX DAYS! Annnnnd we got FULL price. Made a little money too.

We rent now, a lovely home that is even better than what we "owned".

I am almost 40 years old and I will never buy again, by the time the damn thing is paid off I'll have one foot on a banana peel and the other in the grave!

[noamnety]

15. I'm not sure about all that.

I think renters save money because they are more apt to live in smaller spaces, with smaller (or no) yards. But that's not an inherent thing about renting. Homeowners have the same option.

But the landowner still has a mortgage, and you can generally bet that the renter is covering the full cost of that mortgage, plus enough to cover their taxes, plus enough to cover maintenance, plus profit for the landowner. And they are in their rent covering the cost of the landlord's insurance, plus sometimes buying renter's insurance depending on the cost of their junk. Renting just funnels more money into the pockets of landowners in addition to the banks. At the end of thirty years, you've paid $500 or $1000 a month, less or more depending on your choices either way. And at the end of one of those options, you own a home. If you rent, at the end of 30 years you've paid three times the cost of your landlord's mortgage. How is that better?

Us, we have a 15 year mortgage which I think (? lost track) we are about 1/2 done with. That's at 4.5% interest. Paying a mortgage for us from about age 35-50 and being able to live just for the cost of taxes, insurance and maintenance beyond that on into retirement is a huge savings, and being here permanently meant we could do long term things like plant fruit trees from cheap little bareroot stocks, or perennial edibles like asparagus, rhubarb, berries, and so on. And we don't have to worry about our rent going up over the years keeping pace with inflation.

Mobility is a plus when you may need to move around for jobs ... but being stable and being able to homestead to some degree or another and live off the land is also a plus. And you don't need a whole lot of yard to do that.

[Aviation Pro]

21. Again....

...what most homeowners fixate on, and I did too, is the overhead burden of the mortgage. Start including all the additional costs, which are ongoing and not fixed, not deductible and don't end with the mortgage, and you'll see that the economics of homeownership are far more than just the bank loan.

[noamnety]

35. Same with renting, though

If you think landlords don't figure maintenance costs into their rent, you're kidding yourself. They don't suck up the cost of replacing a furnace because they are altruistic. It's a for profit business, and they pass their expenses right onto their customers, like any other business.

We probably get on better than most because we do a lot of our repairs ourselves. For me when I was a single mom and a homeowner, having the house and no money actually was a good thing for me, because it forced me to learn some skills to be self-sufficient. When part of the roof went bad, I bought some plywood and tar paper and a ladder and fixed it myself.

Same with my car - when my brakes went bad, I fixed them myself. I know there are some people that think leasing a car is a better deal than buying, but if you hang onto your cars for ten years or more, and have the skills to maintain them, it's way cheaper to own.

Maybe that's the deal with home ownership as well. If you call in an outside person to do every little job instead of learning plumbing skills or electrical skills, yes, that adds to the cost. I'm lucky because my partner is good with maintenance and more organized than me, so large expenses are often avoided. For $100, we added a backup sump pump. It took a little plumbing skills, but nothing huge. Other home owners might have paid labor for outside help to install it. Most don't put one in at all ... they wait til their pump fails, and then have to pay in some form when it floods. Things like appliances, we learn to fix.

You can look at things with all different perspectives. I view that joke about renter's depot with people standing around not fixing things as a sign of what's wrong with our culture. We have to employ servants to do basic life skills for us that we should be doing ourselves. As a society we've lost those urban survival skills but we still depend on them.

[Aviation Pro]

57. True enough....

...but can a landlord raise the rent in the middle of the lease (answer, no). And if he/she announces to the tenant their intention to raise the rent to cover (pick one) roof repair, hot water heater replacement, sprinkler repair, etc. in the next lease the tenant can politely say, "thanks, but no thanks," and leave. If the area is in a downturn (and name an area, other than Houston, that isn't in a downturn) what are the chances that the landlord can get another tenant on short notice?

See the spiral?

[noamnety]

64. Most leases are annual. We get that.

So landlords can raise rent annually to cover increased maintenance costs. And often do.

A mortgage company (assuming you don't have an adjustable rate mortgage) can't raise the rent for 15, 30 years, whatever the term is. So you are paying 1980 prices in 2008 for your home.

[Aviation Pro]

66. Again....

...and this time look at this from other than the mortgage expense. A 15, 20, 25 or 30 year old home has an aging issue (roof, insects, HVAC, etc.) plus a valuation and taxation issue. As the mortgage is paid off and earnings remain flat, the other expenses start to add up.

[noamnety]

71. All that is figured into your rent as well.

A 30 year old apartment has the same roof, insect, HVAC issues. And gets taxed at rates that increase. Did you imagine your landlord isn't passing those costs on to you? You are still paying those costs, and paying for her profits on top of them.

I guess the alternative is to advocate tearing down all housing that is over 10 years old, and rebuilding new housing in their place. Somehow that seems less than environmentally responsible, though.

[Aviation Pro]

77. And if the landlord does not keep the house in good condition....

...he will not get the renters. And if he charges some insane rent he will limit the pool of available renters. The onus will always be on the single homeowner. Apartment complexes are a horse of different hue.

[dysfunctional press]

72. and when the renter decides to move- there are more costs entailed.

the time and expense of the search for a new place- then generally the security deposit/1st month's rent has to be paid before the security deposit from the 1st place is returned- IF it's returned. and then the cost (plus time plus hassle)
of moving itself.

as far as finding tenants during a downturn- when lots of houses are being foreclosed on, it means a bigger demand for rental properties.
when we had our two-flat in chicago, all we ever did was put up some signs in the neighborhood, and it never took us more than a week to get a tenant from when we put up signage. over 10 years, we had 3 different tenants for the upstairs unit in our two-flat.

[Midlodemocrat]

90. Every apartment I ever rented, and there were a total of four

had the rent raised annually. My last apartment was approximately 600 sq feet and when I moved out, the rent was the same as my 2400 sq house's mortgage.

Different states, to be sure, but here, I couldn't rent a house for what my mortgage is. And, an apartment would be out of the question here. Not nearly large enough. We both work from home and have three kids.

[pitohui]

30. this poster has it right

i love how the pro-renters find some million dollar house (that they probably couldn't have qualified to buy anyway) and use it to pretend that they have saved money because they rented instead of buying this

by that standard, jesus, how much money did i have by instead buying a $55K house, now worth twice that?

you could say that we've ALL saved millions by not buying million dollar homes but the reality is that most of us weren't going to buy million dollar homes anyway

compare apples to apple, the people who recently moved out who lived next door to me were paying $1,500 (!) rent for the same plan of 3 BR, 2 bath house, same size lot, same everything, while my original mortgage from the early 90s was only a bit over $400 a month -- and now it is zero because i paid the thing off early

if you are a greedy person and feel your only choice is to rent some snooty apt overlooking the marina or else buying a macmansion, then maybe renting does save you money

for most people, renting HAS to be a huge loss of money, because you are not just paying to occupy the house, you are ALSO paying some surplus that represents PROFIT! that's pretty much capitalism 101, folks, the landlord and the owner class is not losing money by renting to you -- a little logic here -- it's bitterness that makes people argue that, oh well, they're better off not having anyway, but let's be real, it's better to be a have than a have not and that's all she wrote

[noamnety]

41. surplus - that's the word I was looking for.

Thanks, yes, it is capitalism 101. You don't magically get ahead by adding one more person into the profit chain.

You get ahead by cutting people out of the profit chain, in whatever ways you can, and by consuming less so you aren't in the chain at all wherever possible.

If you "consume" 2,000 square feet of living space plus an acre of prime real estate, you need to compare the total costs of consuming it as a renter vs. as a homeowner.

If you consume 800 square feet of living space plus no yard, you need to compare the total costs of consuming that as a renter vs. as a homeowner. And in each case, you need to figure in inflation over 15, or 30 years, or whatever the mortgage is. A renter's rent will keep increasing. My mortgage payment won't - it holds steady until it disappears completely. And there is no way I could rent anything even remotely comparable for what I pay in insurance, taxes and maintenance alone.

[raccoon]

158. Excellent point,

"If you "consume" 2,000 square feet of living space plus an acre of prime real estate, you need to compare the total costs of consuming it as a renter vs. as a homeowner.

If you consume 800 square feet of living space plus no yard, you need to compare the total costs of consuming that as a renter vs. as a homeowner. "

[elocs]

17. I live in a mobile home, so I have 1 foot in each side,

but since my home was paid off years ago I only have my lot rent: $210 a month plus $4 for taxes. Even in this small city (although it is a college town) I could not even get a decent efficiency apartment for $214 a month. This place suits me perfectly. I am in the city and just 1 block from the river (but amazingly, not in the flood plain) and in the early spring I can see eagles as common as robins. It's a nice, quiet, peaceful and inexpensive place to live and I have become very spoiled. At this point in my life (55) I have absolutely no desire to ever own a traditional house. My only fear is that the park owner would sell it so condominiums could be built here (this land is valuable) and there are a lot of older retired duffers living here, of which I'm nearly one.

[Aviation Pro]

23. I miss Florida too....

...lol.

[RebelOne]

150. I also live in a mobile home here in North Georgia.

My lot rent is $332, which includes water and garbage pickup. I am just northwest of Atlanta in a really nice mobile home park. Everything is conveniently located. I have 3 large supermarkets, a Target, Lowe's, Home Depot, BJ's and plenty of other stores all within a 2-mile radius of my house. I also have the fear that the park owner would sell the park for condos to be built. There was a trailer park directly behind me that was sold a year ago. Condos were supposed to be built there, but so far nothing has been constructed. My neighbor said that she heard a rumor that our park was going to be sold within 5 years. Hope she is wrong. I'm and 69 years old and still working full time. I was hoping to retire next year. But if I end up being kicked out of my home and have to move to pay rent, I will probably be working until I die. I am collecting social security, but I could not live on that alone.

[Phoebe Loosinhouse]

20. Home ownership is freedom and slavery combined

Freedom because you can have your pets and paint and decorate as you like and you have the security of knowing that you can't be displaced or lose your lease because now your landlords daughter wants the house or something similar.

It's slavery because now you are physically tied to a non-liquid asset that takes time to dispose of. That's why real estate was NEVER the vehicle of choice until the last couple of bubbles. It requires time, trouble, maintenance and tenants and you may or may not make a profit, depending on the real estate market in your area.

It's also a big problem how cities and towns over rely on property taxes and are crushing home owners (even if you rent, these costs have to passed along as part of a renter's expenses, too, so no one really escapes.) One sign that pointed to a clear bubble was when the costs of homes so rapidly outpaced the costs of renting. YOU might be willing to pay 2 or 3 grand to own your castle, but no one's going to pay that kind of rent for it and you will LOSE money by renting it. What kind of "investment" gives you an ongoing negative cash flow for the foreseeable future?

[stray cat]

24. A one bedroom 700ft condo without fees goes for at least 250,000

in any county surrounding my work. The 20% downpayment and mortgage costs would prevent any build up of equity so I get to either pay the bank or the landlord. Even so, rent is over 1200/month for a 6-700 foot apt.

[Aviation Pro]

26. East or West coast?

....

[stray cat]

31. East coast - NY in Westchester county is work.

No way can I get into the buyer market requiring 20% down. The condo fees alone are almost half my current rent.

However, I'm in a specialized field and lucky to have a job anywhere in the US - I just won't be buying a house or putting away much cash for retirement.

[Aviation Pro]

56. As a former native New Yorker.....

....I understand. I do not know how people other than the Masters of the Universe on Wall St. make it every month.

[DailyGrind51]

27. The benefits of homeownership are too far in the future and only

when the home is paid off. My house is paid off, but I spend my weekends and vacation time on do-it-myself projects, because I can't afford to hire professionals. However, if I am still alive in twenty years, however, I can either sell the place and move into a retirement home, or, if I am still healthy, get a reverse mortgage.

[NNN0LHI]

28. I can see your point if you have owned 3 houses over the last 20 years

At that rate you more than likely never paid a nickel down on the principal of any of them because for a 30 year fixed mortgage it takes about 18 years of paying just about pure interest to before you begin paying on the principal. So yes that is a losing proposition at best because turning properties over and over again or refinancing just restarts the huge interest process all over again from the beginning.

My house is a few years from being paid for and I have kept it up well inside and out.

I paid $95,000 for it in 1989 and it was recently appraised at $245,000.

I personally could not deal with some landlord having the right to enter the dwelling I live in on a whim. I am too private for that. But what ever works for you is great.

Don

[Aviation Pro]

45. First, congratulations. Unfortunately....

...moving around the world has its disadvantages. However, since I live in an apartment complex, no landlord has the right to enter my place unless I give permission. Most rental contracts with single homeowners stipulate the same and are required by state laws.

[CrispyQ]

104. This article indicates that the new FISA bill gives "persons assisting the government"

the right to enter without a warrant or your consent.

Forget Retroactive Immunity, FISA Bill Is Also About Prospective Immunity
by Matthew Rothschild

http://www.commondreams.org/archive/2008/07/11/10286/

snip...

The prospective immunity extends beyond telecom companies and ISPs to include even landlords and custodians, and it is not limited to the provision of communication contents or records.

Check out Title VIII: “Protection of Persons Assisting the Government.” A “person” is defined as “an electronic communication service provider” or “a landlord, custodian, or other person who may be authorized or required to furnish assistance. . . .” Note how wide open is the category of “other person.”

And “assistance” is defined as “the provision of, or the provision of access to, information (including communication contents, communications records, or other information relation to a customer or communication), facilities, or another form of assistance.” Notice how wide open is the category of “another form of assistance.”

All of these “persons” providing “assistance” are now immunized by this bill for their future actions so long as the Attorney General certifies them in court.

Look what’s happening here: The combined powers of the Executive Branch and the private sector are now arrayed against the individual.

===
(bold emphasis added by me)

I haven't seen this article discussed on DU. I don't know if this author's points are valid or not, but if they are, it is alarming. That said, I believe the Patriot Act has a provision where they can break into your house without your knowledge, although I believe they still need a warrant. Sadly, the point is, if they want in your abode badly enough, landlord or not, warrant or not, with your knowledge or not, they'll find a way in.

We are so fucked.

on edit: I realize your post was referring strictly to the landlord entering, not the government.

[LWolf]

29. On the other side of that coin,

My taxes, insurance, and interest are tax deductible. I have a 30 year fixed mortgage at 5.6 %. My mortgage will NEVER go up. I can pay as much additional principal each month as I choose, significantly reducing the amount of interest paid over the term of the loan.

Nobody can tell me what color to paint, what kind of landscaping to maintain (with the exception of hemp, lol,) or anything else about my place. I can do what ever the fuck I want with it.

Since mine is a beat-up, run-down old mobile home that is not worth the $$$ it would take to fix it, I'm considering having it hauled off and living in a travel trailer. I could rebuild a real house, slowly over time. Or investigate any number of alternative, greener housing solutions. Meanwhile, I could not rent the fenced 6 acres, barn and living quarters for what I pay for mortgage, taxes, and insurance. Board alone for my horses somewhere else would cost me 3/4 of that, without renting somewhere.

If you take into account location: dead end of a private road, next to many miles of public land, a hot attraction for any horse owner, I'd pay more than my mortgage to rent such a place.

[jobycom]

32. You are paying all the costs of ownership, plus a reasonable profit, to someone else.

No landlord is charging you less than it costs him to own. He's charging you mortgage, taxes, insurance, maintenance, and a reasonable rate of return. No one is in business to break even.

In addition to your rent, you have to calculate how much you would have to pay into savings to equal the long-term gains in equity you would get by paying down a mortgage and letting inflation increase your investment. Buy a house with a steep mortgage, and in five years that mortgage is managable. In ten years it starts to become trivial. When the mortgage is paid, you pay nothing but taxes. But rent, and your payment rises with inflation every year, so that inflation works against you, instead of for you.

Having said all that, I rent. :) But it's temporary. The advantages to renting is that short term you don't pay as much, and you have more freedom to move. But you pay for that freedom. So it depends on your lifestyle. If you're anchored in one place, and you are renting, you are paying a mortgage, taxes, and maintenance, but all for someone else. All for their savings account, instead of yours. That's very generous, but very expensive for you.

[pitohui]

36. exactly

people are renting because they have some problem so severe that they can't get together credit/down payment

i would hope the problem is youth and that with time and increased earning ability, that problem will be overcome

otherwise, as i said upthread, renting is another example of how it costs money to be poor -- over your lifetime you pour profits into someone else's pocket

[Aviation Pro]

49. 32% of all households rent....

...are you going to paint every renter with the same broad brush? That's like me saying that all homeowners are one medical crisis or a layoff away from foreclosure. Go here to find out more: http://www.angryrenter.com

[jobycom]

65. That's a little misleading.

A lot of that 32% will buy when they get the chance, while others will take their place as they move out on their own. The number looks constant, but it's not a constant group. There are a lot who rent by choice over a long time who could afford to buy--it's certainly better for some lifestyles. But not the whole 32%. Her point wasn't that all renters are poor deadbeats, I don't think, it's that a lot of people rent because they can't afford to buy, and would buy if they could, but since they can't they are having to pay to make someone else rich.

Those who can afford to buy but rent anyway are a different story--they get what they want for what they are paying. But you can't claim they come out ahead economically. They are paying more to rent. But they are getting what they want for what they are paying.

[Aviation Pro]

69. Personally, I do....

...and again, I am very prudent with my economy. It's not for everyone, but it's a choice.

[GoneOffShore]

117. Interesting little web site that - Run by Dick Armey - What a surprise!

Masquerading as some sort of front group for renters and actually is run by people who want to get rid of Social Security along with some other "libertarian agenda" foolishness.

:eyes:

Are you promoting these guys as actually being "progressive"?

[Missy Vixen]

149. You (and the website you tout) paint every homeowner

with the same broad brush. We've heard story after story after story of unscrupulous lenders who sold ARMs to prospective homeowners. Of course, they're just to pull themselves up by their own bootstraps, aren't they?

I'd also like to add that there are significant tax benefits to owning a home. If you don't need those, that's great. When one lives in an area of the country that renting is equally as expensive (if not more) than purchasing, and renters lose any tax benefit as well, there really is no alternative.

Julie

[stray cat]

37. If I bought right now I would barely put any equity in the place so I'm just paying the bank

And besides I don't have 40,000 plus saved up for a downpayment (20%)or the additional closing costs and taxes on a cheap house in this area.

[jobycom]

58. You're paying the bank if you're renting. You're just paying into someone else's account.

That's what landlords do. They charge you whatever they have to pay to buy the house (apartment, whatever), then they pay the bank with your money. And they raise rents to match inflation, so you pay more each year, and they pay the same, so their profit increases, and your bank account does not. If you buy, your payment stays the same (as long as you stay away from ARMs). And while your first couple of years of payment go largely to the bank as interest, your house increases in value because of inflation. Even when the market falls, as it has been doing, over time values go up. Ask someone what their payments on a mortgage were 20 years ago, and it's laughably trivial by today's standards. The same will happen 20 years from now--you'll be paying a fraction of what the same house would cost to rent then. And all that money you've been paying for 20 years will have doubled or more in value, rather than doubling for your landlord.

As for buying now, with the HUD and FHA programs out there, you can buy with about 3% to 5% down and finance your closing costs into the loan. In a couple of years your house will have gone up in value, especially now with prices so low, and your equity will equal to 20% you need to eliminate the PMI. Or you can refinance on better terms. Or you can sell and cash in the equity and buy a bigger house--only if you do that too frequently, you do eliminate the gains of ownership. Or you can even get an equity loan and pay off other debt if you have it, and the interest is tax deductible--dangerous habit to get in, but if you do it once it can be beneficial.

In twenty years, you own a house with more equity than you could hope to save through a bank account in that time, and you won't be paying whatever exorbitant rate landlords are charging then. The rate they charge is always going to be roughly what the cost of buying that property would be at that time, anyway.

Rent is buying. It's just buying for someone else.

Now, if you plan to move a couple of times in the next five years, buying isn't worth it. You pay too much in closing costs and interest to break even. The break even point is supposed to be four years, although with prices getting close to rock bottom, they will at some point begin to jump up, so the break-even point might be closer to two or three years, depending on what happens. But, if your cutting it that close, renting is probably safer.

[Aviation Pro]

61. There has been....

...a paradigm shift that created a mobile society in this country. The old paradigm of homesteading for 20 to 50 years is becoming a distant memory with globalization and the movement of jobs from formerly stable areas to areas that offer corporations more incentives. Unfortunately, the dream of being able to live in one area long enough to own a home (no mortgage) is fading.

[jobycom]

68. That's true.

If you can't live in a place more than five years, you probably won't do more than break even buying, and if you live somewhere for less than three, it will be cheaper to rent. But I don't think that most people move that often. Most of the people I grew up with live within 50 miles of where they grew up. I don't, but they do. Most are blue collar sort, but even some of my white collar engineer buddies live in the same place.

[Aviation Pro]

48. Again.....

...I am paying less than 15% of my net take home pay to rent (got the spreadsheet to prove it). Yes, I understand somebody is making a profit, but that's the way capitalism works. However, I also look at my bank accounts and show a net profit per month, which I'm able to move around at will. Also, again, I am a prudent steward of my economy and do without the things that clutter one's life.

However, I do take hikes along some pretty fabulous mountain trails along the continental divide. Costs, about $40 in gas, $5 in food from my refrigerator to feed a family of four for lunch and $0 for the scenary (I do however have to haul my rucksack with me).

[jobycom]

78. Whatever you're paying

you could pay roughly the same to buy, since what you are paying is based on what someone else is paying to own the structure you live in. Over time they will have the equity and you won't. Depends on what you want out of life, but you are still paying more to rent than to buy, long term. You may like what you get for that money, but you aren't saving money.

And ironically, I am about to head out for a hike in my area. You've made me jealous, I just have the hills and canyons around Austin to hike in. Not bad, but not what you have! :)

[Aviation Pro]

83. And yet....

...I look at my accounts and say I am. Have a good hike.

[rainbow4321]

34. I've owned a house since 1994 and really want to downsize to an apt.

My youngest child is 17, oldest is 21 already out on her own while she attends college. I look at all the repairs/upkeep I have spent (and need to spend) $$ on and truly think I want to move into an apt. My youngest is saying "not til I move out" so it may be a year or 2 (she's going to stay at home and go to our county college for right now).

[NNN0LHI]

38. What are you going to do when your children start bringing your grandchildren over by the bushel?

With their spouses and all the kids toys and all their luggage to stay for a few days? Or weeks? Because they will. I have discovered children tend to do this. You will too.

I just emptied my house out that has been full since Wednesday. Love to see them come. Love to see them go. Miss them already. Yep.

Don

[rainbow4321]

40. They will be more than welcome to stay

My plan would be to get a 2 bedroom apartment, they could use the second bedroom.
As a single mom since 1995, I have sacrificed alot for both my kids..kept the house, worked extra shifts if I wanted us to go on vacation or needed extra repairs, worked a night shift for 8 years so they would have rides to and from school..the list goes on and on.
So if they resent or are bothered by the fact that at age 45 (how old I will be when I probably get to fulfill my wish of downsizing to an apartment) that mom lives in a smaller place, then they will have to just be resentful and deal with it.

I know as a new parent, when *I* went to visit relatives who offered to let me stay with them instead of renting a hotel, I was just grateful to not have to spend money on renting a hotel room. Didn't matter to me how much room I had to spread my stuff out or that me and the kids shared the extra bedroom. My kids have slept on relatives couches before or shared their cousin's room. Like I said, we were just happy to be seeing the family and grateful that they offered us a place to stay.

[NNN0LHI]

43. I currently have a 3 bedroom house and am seriously thinking about putting on an addition

Thats how crowded it is getting around here when the whole shootin match pulls into the driveway.

You might want to wait and see? Once they start having kids there is no end.

Don

[hobbit709]

39. The average rent around here is $1000/mo

I'm not making $7K/mo net. Our house payment is $495/mo including escrow-that's for a 3Br 100 sq ft. We couldn't rent a house for that money and any place we could find cheap wouldn't let us keep our dogs. They're our kids and we wouldn't dream of giving them up.

[Aviation Pro]

50. Most rentals here run between 500 and 900/month....

...yes there are luxury rentals for far more, but those are for people afflicted with statusitis. Also, the majority of rentals understand the relationship between renters and pets and are far more liberal with policies concerning pet ownership (they want people to rent and are not willing to halve their pool of potential customers).

[REACTIVATED IN CT]

127. Here in southern CT almost all ads for rentals say NS NP

No Smokers No Pets. You must live in an unusually pet-friendly area.

In my town, a 2 bedroom apartment is at least $1000 month plus utilities. My mortgage is $740 a month, taxes are $250 - so its a wash in terms of cash outflow. But I don't pay income taxes on my $990 a month and I can have my dogs. Yeah, I had more free time when I was in a rental since someone else did the yardwork and snow shoveling, but I could chose to pay someone to do it for me if I didn't need the exercise. Someday I may trade the house in for a condo or a nice mobile home - if they allow pets. edited to add : I could buy a mobile home today for the equity in this house -its value has doubled in the 10 years I've owned it.

[Midlodemocrat]

42. My mortgage is less than the rent here for a similar space.

Granted the house is almost paid for, but still... :shrug:

[Aviation Pro]

52. Again.....

...homeowners, such as I did, are always fixated on the mortgage as the only expense. Homeowners should calculate all the expenses first and then make their arguments.

[Liberal In Texas]

79. And a lot of people buy houses they can barely afford.

If anything unexpected happens, like illness or job loss, there is no cushion to fall back on.

When we were looking for a house we were amazed at what the mortgage company qualified us for. If we'd bought a house for what they said we could afford, we'd be scraping by unable to buy any extras. As it is, we have a nice house in an older neighborhood that is appreciating in value. If one of us ever gets to where we can't work, we can still make the mortgage payments, no problem.

Yes, people don't realize that maintenance is part of the deal. When the water heater went south, we were able to pay more (because we weren't strapped with a high mortgage) for an on-demand tankless that will save us energy costs from now on. We just replaced the AC system with a 2 stage 16.5 SEER rated system that is greatly more energy efficient than the old one. Again, because we're not house-poor from the mortgage, we can put in things like this that are a little nicer.

And that is one of the advantages of ownership. I can pretty much do whatever I want to the house and nobody can tell me I can't. I can also get and enjoy nice solid infrastructure rather than stuff that's "good enough for the renters."

[Midlodemocrat]

88. Excellent point.

What's 'good enough for the renters' here, isn't what I want. We just redid our kitchen with upgraded appliances, granite, etc. and I certainly wouldn't be able to find that here in a rental for what I pay for my mortgage.

[PeaceNikki]

80. But the owners of rentals will adjust rent to cover those SAME expenses

:wtf:

[noamnety]

85. No, not really.

Not if you live in magic-world where dancing fairies come along and pay the cost of maintenance and taxes instead of renters covering those expenses in their rent.

[PeaceNikki]

92. Silly me.

[Aviation Pro]

87. And the renters will leave at the end of the lease....

...

[noamnety]

93. And when they go to look for another one

will they find that on average lease prices have gone up? Or down?

I know there are pockets of extremes based on location, but what's the national trend on that?

The fact is, they leave, they are probably still going to wind up paying more for less in each move.

[Aviation Pro]

100. Depends on the area.....

...if you are renting from a homeowner who needs to replace the roof the rent will rise well above the average rental in that area. Again, I advocate apartment complexes because the maintenance costs are shared among all the residents. And again, if renters became a voting bloc developers would build more four bedroom rentals in apartment communities.

[noamnety]

111. I don't really want to do anything

that encourages developers to build more. Actually, I don't want to do anything to support developers in general.

That goes back to capitalism 101, and who is sitting at the top of the money-skimming pyramid. You seem very happy to continue to transfer money into the pockets of developers, who can accumulate more and more assets. I have a problem with that just as a basic concept.

[Midlodemocrat]

86. Well, I certainly don't pay $1000 in maintenance

which would be the difference between my mortgage and renting the same sized property.

And, I like the security that in 3 years, it will be all mine with the exception of taxes (extremely low) and insurance. We've upgraded and maintained out house with the thought of living out our lives here, so I think we've actually done the best thing possible for our family.

[Lorien]

107. Mine too; significantly less. Owners also get to write off the interest

come tax time. I also run a business from out of my home, so I get additional tax savings there too.

Equity; I have 300k of equity in my home. A few years ago I had several hospital bills that my insurance company wouldn't cover, adding up to 32k. I took out a home equity loan with a 5.25% interest rate to cover the expense. I can write off the interest during tax time. Using a credit card to cover those expenses would have ruined me.

Another factor; the place I rented before I bought my home was sold as a timeshare, so I was evicted. Three months before I moved the new owners started changing the landscaping by cutting down all of the 200 year old live oaks that made the complex beautiful and replacing them with palm trees. I endured three months of constant chainsaws and environmental devastation before I could find a home and move. It was heartbreaking. At least only I and mother nature decide if a massive old tree comes down on my property now!

[Midlodemocrat]

146. Plus, I really like the fact that I OWN this place.

That it's mine. I can have people over anytime I want and I don't have to worry about others in the building.

I just love that. We can sit in the backyard for hours listening to the birds, or the cicadas and frogs and it's ours.

[Lydia Leftcoast]

44. I rent a spacious, 2BR well-maintained apartment for less than $900

plus electricity ($25) in a pleasant, convenient neighborhood where houses for sale are averaging $400,000.

To buy at that price, I'd have to live on the edge of some desolate cornfield halfway to South Dakota with a five mile drive to the grocery store. No thanks!

Better yet, I can leave on a month's notice.

Frankly, I wouldn't buy a house unless I could pay cash.

[noamnety]

67. Are you comparing apples to apples?

What is the average size of that average $400,000 home?
What is the size of your apartment?

[Aviation Pro]

73. $400,000....

...will buy an enormous house in the mid-West, but the average salary will not allow the majority of people to get within sniffing distance of that house. On the other hand, 400K in San Francisco, the Valley or Greenwich, CT will get you a closet.

[noamnety]

81. That wasn't my question.

I was asking her if she was comparing apples to apples. Not comparing her rent in one location to a house in another. Or comparing a house here to a house there.

I was asking her to compare the cost of renting a space in a particular location to the cost of owning a similar space in the same location.

Please don't fixate on the cost of renting a small apartment compared to the cost of buying a mcmansion - that's poor logic.

[Lydia Leftcoast]

105. I could buy a WORSE apartment in the neighborhood for more money

Most of the apartments I looked at (and rejected) in this neighborhood when I first moved here have gone condo.

Mortgage payment plus taxes plus association fees add up to quite a bit more than I'm paying.

The houses start at converted old lake cottages and go all the way up to humongous Victorians. This is an old neighborhood.

[Wcross]

46. Why I own.....I pay only 2% of my income towards housing.

Paid it off, now its just taxes + insurance. Oh, no landlord is going to increase my costs. I have total control over my living quarters, no snoopy- creepy landlord or maintenance guys. I can have pets. I can have guests who are loud & smelly if I like.

No way would I go back to renting.

[Aviation Pro]

51. Your choice....

....not going to judge it.

[Greyhound]

53. Agreed. Owning houses and condos has cost far more than the "profit"

realized at sale. The problem lies in people's willingness to accept lies told them by "authorities". Of course there are exceptions and they are the stories you hear about.

No time to look it up now, but there is a famous quote that goes along the lines of "If you want to control a man, give him a mortgage". I think it was Rockefeller.

[Aviation Pro]

54. Good one....

....

[JAYJDF]

55. Rent vs Buy decision, to me, depends upon where a person is in their life.

I was in the military for 10 years so I started the process after most.
After two houses and raising a family, a divorce, moving out of state, starting a small business and filing bankruptcy, I am currently caught up in the housing bubble costs. Making payments on a house I know I can't afford and owe more than it's worth.
Renting looks pretty good to me.
Comparable houses to rent in the area would cost just about half of what my mortgage is.
Renting looks good to me at this point in my life, as I see no way of ever paying off or down a house.
Not complaining, just explaining how I believe it depends on where one is in the ole battle of life.

[dysfunctional press]

59. i've only sold two homes in the past twenty years- but i will NEVER rent again.

we doubled our money on the first property- a co-op unit in evanston; and came close to tripling our money on the second- a two-flat building in chicago. we now have a semi-rural place on a little over an acre that we could have purchased outright with the proceeds from the sale of place number two- but we decided to pay off about 75% of the cost, and finance the rest with a low-rate 15-year mortgage, to have money for remodelling. we're also making at least an extra payment every year applied directly to the principle, so we hope to pay it off in under 10 years.

in the vast VAST majority of instances- renting is in no way shape or form a better or more prudent "economic bet" than owning. and it boils down to a one-word reason: Equity

[Aviation Pro]

63. Worked for you....

...congratulations.

[dysfunctional press]

74. it works for the vast majority of people who do it.

nt

[Aviation Pro]

82. Afraid you'll have to back that up.....

...because I hear too many homeowners, who aren't in distress but bought in the last eight years, who are constantly complaing about their loss of equity and value. Again, you can't eat equity (and unfortunately in the last eight years too many homeowners used their houses as ATM machines, which speaks to the issue of financial discipline).

[dysfunctional press]

89. what kind of numbers/info are you looking for as "back up"...?

because over the long haul, those people who bought over the past eight years will still end up with equity and value in their homes.

and last i heard, you can't eat rent- BUT a bank WILL give you a loan against your equity(home equity line of credit) with which you can purchase food to eat. do renters have any kind of arrangement like that?:shrug: other than food stamps?

[Aviation Pro]

102. And yet, cash in the bank beats out an equity loan everytime....

...yes, you can take out an equity loan, but you have to pay that back, and unfortunately, many less fiscally disciplined people did just that and bought (take your pick), two Harley's with all the trimmings to take to Sturgis or Daytona Beach, a monster SUV, or several watercraft and are now stuck with clutter plus two or three or four equity loans.

Meanwhile, and this is just me, I keep a sizable cash reserve (earning interest, albeit small) for use at anytime.

[noamnety]

110. What you just described isn't an issue of renting vs. owning

it's an issue of mismanaging money. Apples, oranges. Logical fallacies.

Many apartment dwellers also get into debt spending money on dumb shit.

[dysfunctional press]

137. actually we have both- the availability to take out a loan if we like...

and a 6-month reserve of cash for unforeseen circumstances.
we didn't buy any extravagances with our last home equity loan- we used it to finish up the work on our two-flat to sell it.
we haven't taken a home-equity loan out on our current place, but we did just refinance- to both get a lower rate over a shorter term, and also to take out some cash to cover the cost of having a new detached 3-car garage built. the house has an existing attached 2-car garage- but we're turning that into a wood/metal shop.

[Adsos Letter]

97. I think it is the "bought in the last 8 years" that accounts for much of the difference.

[Fumesucker]

60. We have owned since 1992

Best thing we ever did.

1,100 sq ft, 3br, 2ba with double car garage and basement underneath, we paid $60k and our combined mortgage and upkeep are considerably less than apartment rentals in our area now.

I have my business in the garage, which means I don't have to rent a commercial space and we are planning finishing the buildout on the basement side to allow us to rent a room, which will bring in probably 1/2 to 2/3 of our mortgage payment.

When we retire we plan to build out the garage side as well and rent that out too. Combined with a reverse mortgage and Social Security the income should allow us to live fairly comfortably.

Thanks to huge medical bills we do not have any savings at all, so our home is our only investment.

[Adsos Letter]

96. I think those who factor in life situation, as Aviation Pro has noted, are closest to the mark...

We are almost finished paying off our home. Despite the housing bubble, it is still worth almost 3 times what we paid for it. The tax breaks were a necessity for us because of income level. Our mortgage has been fixed from the outset at 5.25%, and only eats up about 20% of our net. The neighborhood is very nice, and we only have one adjoining neighbor (Green belt on the other three sides).

I was in the construction trade for 30 years (now retired at 53, and pursuing an MA in History; my wife still works as a Director of Pediatrics) so I have the skillset, and we have enough income to afford materials, to handle the majority of maintainence issues involved with ownership (I still refuse to do concrete anymore... :) )

We have not been forced to move since purchasing this place over 20 years ago; it has been a stable "home" for our kids, and I do enjoy the lack of landlord issues (we rented 6 different times prior to purchasing). It is 15 minutes from my wife's work, and was rarely more that 45 minutes from mine (going to different job sites).

So...this place has worked for us. But that has been dependent on our situation, and our desires.

[Catherine Vincent]

108. This would be a good place to ask this question...

I am thinking about paying off my house but with some of my 401K money. I know it is supposed to be for retirement. But I would be able to save more if my home is paid off. Any suggestions?

[mahina]

112. If you have any income, and are still getting the mortgage interest deduction,

you'll need to add the tax you will have to pay to the equation.

[mahina]

109. Whatever is best for you, but I don't understand a couple of your comments.

A "I urge the blogsphere to start using its influence to start considering renters as better economic bets than homeowners."

and
B "This is the reason why renters should use their collective voting power to drive the elite to build apartments or other suitable housing to fit large families such as yours."

Regarding A, do you mean bloggers should influence banks?
Regarding B, do you mean that voters should somehow make people build rentals?

And for what it's worth, my mortgage and maintenance costs total about 350. a month less than rent is for comparable property. Sure would be higher at today's prices though.

[ileus]

113. rent if you want, as for me I'll always own.

It's mine, I work for it, I pay taxes on it, I maintain it 100%. I rented when I was a kid, but lucky for me I'll not have to ever do that again.

There's no one to keep we awake if I rent an apartment. There's no one to bitch if I knock down a wall.

[azmouse]

115. It really comes down to what kind of lifestyle you lead.

I never liked living in apartments. Too crowded and too noisy for me.
I love having my own home. I'm a homebody. I don't need to be out and about, being on the go all day.
When I lived in an apartment I got bored. There was nothing to do, no yard to work in, no privacy.
With my own home, I always have something to do. I don't mind housework, my home stays neat but in no way am I a slave to it. This is the life I want. It has nothing to do with financials. I'm well-off and will own my house in just 2 more years. For me, it's about the type of life I want to live and I couldn't live the way I want to while renting.

[Catherine Vincent]

120. Same here.

I got tired of hearing other people have sex. :)

[Pacifist Patriot]

122. Me too.

Selfish brat here, but I love having my own pool. It's hard to skinny dip legally at the apartment complex swimming pool.

[hedgehog]

128. I had to scroll all the way down here to find someone with the right answer!

I have four siblings and we all live in different types of houses including a rental. Stick any one of us in another's house and we'd go nuts in a month. I live on an old farm with a bunch of animals. The dog hair alone would send my suburb dwelling sister around the bend! Put me in another sister's gated community and I'd be planting bombs in a week. Nothing is stupider, IMO, than seeing someone buy a big house with a huge lawn that they have to mow when all they really want to do watch the game on week-ends!

[TroubleMan]

118. It depends on the area and situation you're in.

There's no one size fits all solution to this. In some cases it's more advantageous to rent and in some cases it's more advantageous to own.

[Vinca]

121. I don't think I could go back to renting. It's a psychological thing.

Plus my cats like being able to scratch the hell out of the back door. We once owned a house with a rental unit and the only thing worse than being a tenant was being a landlord. No matter how hard you check people out, it seems you have a problem. One woman cooked something quite often that stunk up the whole property. Haven't a clue what it was. Another guy turned out to be a raving lunatic who put holes in the wall. We finally turned the apartment into a home office. Never again.

[Control-Z]

123. Where, oh where

have you found rent so low? It costs as much, or more to rent in the area where I live.

[Aviation Pro]

131. I live well below my means.....

...my rent is close to 900/month and yes I could afford a lot more, but I choose not to. If you're in the Denver area, I looked at DTC and thought, "Why?" I then found a place which is close to work (5 miles), clean and has adequate services. This did it for me.

[SoCalDem]

124. The downside to renting is that you are limited on pets and redecorating

Having to ask permission to paint a room or haiving to promise to not rescue a kittie or a puppy, is more than many want to put up with..

Renting probably makes a lot of sense for single people, allergic people, or people whose job requires frequent moves..

Most families prefer to live in a house they are "buying".. Not all manage to pay it off, and some will lose that home, but for most of the rest, they deduct the interest on their taxes, and once that's factored in, if they were smart and did not buy more house than they could afford, it's a good deal..

Single family homes in neighborhoods where the rest of the homes are also being purchased, tend to be more stable neighborhoods, with better schools.

Many times, rentals are in marginal neighborhoods, where bad schools & crime could be a factor as well..

Cities & towns often fight against apartment construction, and when they do build them, they can be in areas where there is very little in the way of transportation or facilities..

Some people are lucky , and find a single family home to rent, in a good neighborhood..one that is owned by a kindly landlord..but lots of rental properties are not that way at all..

[Aviation Pro]

132. I previously mentioned....

...that many rental communities are now pet friendly. As far as painting a wall, many now allow a renter to paint a wall or walls with one of several colors at a nominal fee. As far as bad neighborhoods and bad schools, not so for my area and U.S. law allows parents to place their children at superior schools as long as there's a place in the school and the parent provides transportation.

[raccoon]

160. In my neck of the woods (SC) many rental communities are now pet friendly.

Have been for at least 20 years. They may charge you a pet deposit though.

[MiniMe]

126. Part of it depends on if you already have a home and when you bought it

My mortgage right now is 1K per month including PITI and I can deduct the interest on my tax return. I couldn't find an apartment for that price now in my area, or anything close to it. I would have to move in with my mother.

[ThoughtCriminal]

129. I'm living the worst of both worlds

Trying to sell my house in another city, while we rent. We moved due to employment change (needed the health insurance) and our house sits vacant in a neighborhood full of "For Sale" signs. At least the house is paid for, so we don't have a mortgage dragging us down. But a lifetime of hard work sits there depreciating in an imploding bubble. We've dropped the price a few times, but it seems that there just aren't enough buyers at any price.

We're not enthusiast about becoming landlords and the rental market in the area is not that good either.

[GoneOffShore]

130. Why are you promoting a site run by Dick Armey?

He was one of the most conservative repukes out there and still is.

The site you promote is for privatization of Social Security and abolishing the income tax. And is overrun with Repukes.

:wtf:

[Aviation Pro]

133. Because it provides statistics on renting and homeownership....

...nothing more.

[Name removed]

135. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Name removed]

136. Deleted message

Message removed by moderator. Click here to review the message board rules.

[sendero]

138. I hate to break the news...

.. but, barring unfortunate timing there is no way to come out ahead renting over buying.

Renting homes is a business, and landlords buy from the same pool as everyone else. And they make a profit on their transactions, as all businesses do over the long term.

You are paying, with your rent, the mortgage, the taxes and the maintenance on the property whether you realize it or not.

There are good reasons to rent, chief among them not being tied down. But not among them are economic advantage, except in brief, exceptional situations.

As for the 30 year argument, that is dumb, nobody should finance a house for more than 15.

[bedazzled]

139. i figure you never own your house, even if it's paid for, with taxes like they are

especially in florida. it's not like they won't
take your house away from you if you're not able
to pay taxes. there's no way to get it paid off
anymore.

between the taxes and the insurance being out of
control, i'm a happy renter.

[yardwork]

140. I rented during 2005-2007 and at first I thought it was great.

I'd separated from my husband and moved into my own cute little apartment. Got a reasonable price on the rent. Loved it. Then the company who owned the well-maintained, beautiful, new units sold it to the country's largest rental unit owner/manager. The new company changed all the signage and things started going downhill. When my lease was up they offered me another year at a whopping increase. I went down to the office and said, "I'd like to stay but I'd prefer to keep my same rent." That worked (!) for one year. They charged me for my cat, though. Meanwhile the complex went further downhill. The next year they offered me another renewal at another whopping increase. This time I could only talk them down a little. Shortly afterward I bought a condo and moved. My condo mortgage will cost me the same every month for the next thirty years. It's very reasonable and I can pay it off early with no penalty.

I feel that the fixed rate mortgage of the condo I own is a much safer investment than the rapidly increasing rents around here. And I can be reasonable sure that the unit will be maintained on the exterior (it's a good HOA) and I control the interior.

[Aviation Pro]

144. I've rented since 2001 and have not had a problem....

...in fact, during the height of the housing bubble the management company lowered my rent by 10%. That was surprising.

[yardwork]

145. It definitely makes a difference where you live.

I think that renting does make sense in some communities. I'm not disagreeing with you, just describing my personal experience.

Both rent and housing costs have been rising steadily in my area, even through this recent housing downturn. I felt it was best to go ahead and buy now, locking myself into a reasonably priced condo in a safe neighborhood.

Someplace else the wise decision might well be to rent, like you are doing. And I agree with you that there is no reason for anyone to look down on renters. The media perpetuates that stereotype because, as you say, their products and their advertisers sell better to people living in the suburbs in big houses. Everyone wants to sell us a gas grill, an alarm system, a brand new kitchen, etc.

[Extend a Hand]

141. I once thought that owning a home free and clear would make me secure

you know, at least I'd always have a place to live but I have in the last few years changed my mind. Our property taxes have more than doubled in the last 5 years (my income sure hasn't). I'm really just renting from the government.

Now that we are close to retirement we'll be needing to move to help out parents but right now the real estate market around here is DOA. At our current listing price our house will have garnered less that 3% appreciation per year since 1994. That doesn't even keep up with the Fed's really bogus numbers on inflation and I expect to have to go lower to sell.

Renting or owning-- 28 years of Reagan's trickle down economy has really screwed the pooch :(

[galledgoblin]

143. for now I rent, since I'm a student who will likely move a significant distance soon

in the future I may buy a home... but it's going to be a CITY property, not a new house from plans in some suburban development. a fixed up city property in a secure region will be worth a good deal more money in 20 years than what is put into it now.

[Matariki]

152. "the elite"?

are you referring to anyone who owns a home instead of rents?

Your post reads like a college sophomore who's just discovered Marxism.

[raccoon]

153. I've done both. I'm happy renting now but MAY buy a house in the not too distant future.

Tt's not a one-size-fits-all decision.

Some landlords/property managers are real good to fix things. Mine are. IME, it's better to deal with property managers than deal with an individual owner.

If you're a person who's able and willing to fix up a house, that can make owning a good decision for you. If you're a person who can't do much of any fixing up, maybe not. And if you're not careful you can buy a house and pay tons of money renovating it.

If you're not sure you'll stay in an area for a long time, IME renting is definitely the way to go.

Renters are treated like stepchildren by the society in general, it seems to me.

[mainegreen]

167. Owning is cheaper than renting here.

Sorry. It depends on where you live.