"OT" Renting vs owning

beachbum77
I will admit that I just posted this question on the money matters board but it's not as active as this board so I figured I would post here too. So DBF and I are looking for a new place to live. I'm struggling with rent prices....for some of the prices of apartments, I feel we might as well buy a house even though we have no money down and I am not secure in my job yet. We live outside of philly and the prices range from $700-over $1,000 for a 2 bdrm place. What are all your opinions on renting vs owning?

Pocah323
I like the idea of owning...you have collateral...plus, it's an investment. You rarely lose money in the investment. But, be prepared with the responsibility that comes w/ ownership.

Ascension NOLE
You need to call the Suze Ormond show, she is your only hope. If you don't make the proper decision here it will bite you in the a$$ for years to come, do your homework and study up.

Pocah323
I don't know how old you are beachbum, but Suze Ormond has a great book called "The Money Book for the Young, Fabulous, & Broke"...it's a really great, easy, and informative read!!

OCDB
It all depends. Rents here for a 2bd are 1100-1500. But with the median home price between 550k-600k thats not that bad of a deal.

Guuuut
Owning is usually better but it does depend on circumstances. In an appreciating market you build equity on your investment. In a stagnant or declining market you lose money and you would be better off investing the same money. You want to get a mortgage you can afford (the current foreclosure problems are created by people getting outside of their means). Without a downpayment your chances of getting a loan are small as credit has tightened. A more important point is since you are not married you would need to have in writing who is paying for what and who owns what. Neither of you have any protection. If the house is in bf's name and he suddenly dies his family (as heirs) could kick you out and take the property. And visa versa. If it is joint ownership and one dies the heirs become co-owners. You would both need wills designating the other as heir. Gets complicated doesn't it. The current loan problems were created by loans such as NINJAs (No Income No Job or Assets).

beachbum77
I don't know how old you are beachbum,I'm 25.

Que_Sera_118
Beachbum, I think whether you have the choice to rent vs own is dependent on how much property values sell for in comparision to rent, and your standards for where you live.For example, where I live, a 1 bdrm apt will run you about $950-$1100/month for a decent place. However, a house in need of some repair will be at least $300k. You can't find a nice townhouse/condo for under $275k. I'm a single woman, and I make a nice living, but between the mortage and ~$12k/yr in property taxes, I can't afford to buy. I'm also not big on DIY projects, so a "fixer-upper" is not an option for me. But, I know in other areas, it IS cheaper to buy than to rent. I would research how much homes sell for and estimated property taxes and if the cost is similar to or even a bit more than renting, I think buying is a better option.

WYtumbleweed
I agree with Que, pretty much.Whether you chose to rent or own should depend upon calculations and analysis based on property values, the total cost of owning a home where you want to buy, the total cost of renting, and how long you plan to stay. I would research how much homes sell for and estimated property taxes and if the cost is similar to or even a bit more than renting, I think buying is a better option.Yep. This is the place to start.A couple of additional comments:DBF? I assume that's boyfriend? Not a good idea to buy real estate, or any other large expensive items, with a person to whom you are not married, UNLESS you are both willing to hash out exactly who owns how much of what you are buying and who will be entitled to how much of what you are buying in the event of a break-up. Difficult topics to discuss - but this may save you from serious financial difficulty later on.Also, my rule of thumb is, even if the total costs of owning are comparable to the total costs of renting, if you are not putting 20% down and are not planning on staying in the home for more than 5-10 years - then DO NOT buy a house. With the break-down between interest and principal paid with each mortgage payment, you will not build up enough equity to justify tying your money up that way. You would be better off to continue renting and SAVE that money for a larger down payment on a house later.This is a highly personal decision! Get advice from someone who knows your entire situation and who has some experience in real estate - like someone who has owned more than one house, either consecutively or simultaneously.GOOD LUCK ! !

Ascension NOLE
No offense K, There are two great chapters in this book about exactly what you want to know. And after you read it stay at a Holliday Inn Express and all will be good. Seriously this book will provide what info you need and you can understand.

DeliriouslyHappy
LISTEN TO GUUT...before reading the responses to your post, what guut said was exactly what i was thinking...it doesnt matter that rent is less of a payment, even though youll never own anything while throwing your money away...and...it doesnt matter that you earn equity or lose equity in an upward and downward market, respectively...if you are not legally married....DO NOT buy a house together...oh and btw...suzy ormond SUCKS!!!...she killed my annuity business!!!

Ascension NOLE
If you listen to the callers on her show you can defiantly say they are a different "breed" for sure. That book i posted goes over exactly what the poster wanted to know and then some, very helpful book. oh and btw...suzy ormond SUCKS!!!...she killed my annuity business!!! Dem is fighting words.........Seriously how did that happen?

DeliriouslyHappy
fixed annuities and variable annuities are two separate vehicles meeting the needs of different financial goals...she grouped both as the same type of product and put an unnecessary fear in millions of people...

Ascension NOLE
Wow I did not know she had that sort of market power, thats crazy. I would love to see her yearly earnings due to this.

-gypsy-
Beachbum - I bought my house with my ex-hubby long before we were married, and getting through the hoops was a mess. You'll need a lot of patience. Buying a house doesn't make much sense to me if you don't have the security to keep it, you'll end up in the long list of foreclosures... I think it would be better for you to rent.

DeliriouslyHappy
I would love to see her yearly earnings due to this.look at it this way...she makes her money from touring city to city spewing her words of financial wisdom than actually sitting in front of a client anymore...she deals more with her PR person than the NASD...

Guuuut
she deals more with her PR person Don't you love these people. They have no real accountability, nobody keeping score. Time for DH to get a show on the local cable channel.

Ascension NOLE
she deals more with her PR person than the NASD... Ya she is kind of "cookie cutter" with some of the stuff that she states. Not to get serious but when i left the "nest" i had no clue how most important financial situations went as far as loans ect. She proves to me that we need to nip this problem in grade school. I feel that i should have know most of this before i was in high school. Just like they take a week for sex ED in grade school they should also go over personal finances for a week, now some will say this is the parents job but there is only so much parents can do working and all that good stuff. In no way am i saying this needs to be a college level coarse but something needs to be done.

DeliriouslyHappy
Time for DH to get a show on the local cable channel.oooo...SNAP!wow guut...that doesnt come out of you very often...besides...wouldnt work for me anyway...Wayne's World was already tapped...

DeliriouslyHappy
im not saying that shes a **** up at all...she is extremely knowledgeable in many areas of finance...i was just **** concerning the annuities...

Que_Sera_118
Nole, I'm with you 100%, but I think grade school is too young, a HS class on managing finances would be perfect. Most kids start earning some type of income at this age, so showing them ways to manage their money, like senior year before they go to college or full-time in the working world would probably work.In addition, with the way some parents ring up debt they probably AREN'T the best people to show their children how it should be done.

Ascension NOLE
In addition, with the way some parents ring up debt they probably AREN'T the best people to show their children how it should be done. Very true indeed, well said. I mean for gods sake remember when you had to carry the sack of sugar a pretend it was a f-ing child, that was so stupid they could at least made us learn how balance a check book instead of how to care for a sack of sugar. Credit cards are a whole different monster i am coming to believe that credit cards are the DEVIL. I got my self in some CC trouble in college (who doesn't) and took me a good 4 yrs to make up for it plus i have nothing to show for the money i borrowed from them. Here is a quote form a old wise man i know.... You should borrow money from the mob in stead of CC companies because if you don't pay the mob back at least they will kill you.

Que_Sera_118
I did the same thing, I had to get a second job for a while, then I had to move back in with my mom because between my cc debt and student loans, I couldn't afford to live on my own. You know, the thing is, everyone knows they are supposed to be careful and they don't believe they are digging themselves into debt, but some people just don't get it until they realize they can't their bills and are really living beyond their means.I'll always be a spender, I like buying stuff, I'm just trying to be much much better about it.

Ascension NOLE
Are you my long lost sister (JK) wow you sound a lot like me. Things got so bad my pops drove from Cocoa Beach to Tallahassee and yanked me up by my britches a dragged my ass home until i finally got the point. I had to take 90% of my paychecks and pay those blood sucking ****. I really think if they start this early enough with the small ones eventually common knowledge will be way up and those FAT CAT CC companies will have to go screw each other. You wait with this housing market being so volatile and the stock market going bonkers, anyone in serious debt is not in good shape.

Que_Sera_118
Some people just don't learn unless it happens to them. Look at all of the people on this board who proclaim "MY relationship isn't like that, you just don't understand". People just have this not me mentality and don't see the warning signs. I'm actually glad the bankrupcy laws have changed. If people know it isn't such an easy out anymore, it might make some a little more cautious.

Ascension NOLE
Why do you think im out here, no way to get into trouble (financial) i have gone from a complete disaster to having not one dollar in debt besides my cell phone bill back home. After my experiences financially this place is like a "safe place" for me. Last time i was home i spent 5,000$ in like a week and a half and on nothing special. I still have lessons to learn, and now my company tells me i will be in Antigua for three months, oh lord here we go. = Ascension Island

Que_Sera_118
Maybe I need to be shipped off to some island where I can't spend money. No, it wouldn't work, if I had internet access I could find a way to spend money. For a while, I considered asking my company if I could go to Iraq for a year as an easy way to seriously stockpile some cash, but I just decided it wasn't worth the risk. So, now I'm stuck "being responsible". YUCK!

Ascension NOLE
Their is a ton of jobs that are not in Iraq believe me, my buddy just got to go to Argentina and work there so you never know. About the internet access thing i cant argue i just purchased 400$ worth of computer upgrades while at work so there is that problem. For me it was easy to come out here i was heading for trouble back home so that was a easy decision. I hate to put money first but if i do that now i can enjoy myself later in life, hopefully.

StarsontheWater
You should borrow money from the mob in stead of CC companies because if you don't pay the mob back at least they will kill youThat is hysterical and so true! Beach, Do your homework and decide what is best for you. Also, consider personal preference. Buying a house is a big commitment and can be a burden. In my area, buying is much cheaper than renting but I have found sometimes that I feel tied to this place and it is a big old pain in the ass. Also consider what and where the relationship with boyfriend is going before you commit to something this important. Good Luck!

-gypsy-
Beach - yesterday my kitchen sink plumbing fell apart. I had to fix it. Or call a plumber, which would have been expensive. If you rent, you call the maintenance guy, and other than the inconvenience of waiting for him to show, there's no problem.Home repairs are something you should also think about.

quickblade14
Owning gives you tax breaks......however, if you're not settled in a job, if you're not legally married - this ownership could all backfire in every way.My suggestion would be to get settled for a year or so into a professional situation. That way if you find you need to move neighborhoods or even states - you can do it easily.At the point that you want to purchase a home, it'll obviously be one of you on the mortgage and that person legally liable for all expenses - unless you're legally married.You'd want to make sure that whatever party is assuming all the legal liability and will have all the legal rights, can make all the payments on this lifestyle alone should the union fail.I'd say there is too much uncertainty in your life to "put down roots".I've known several people who took the idea of "investing in real estate" and confused it with putting down roots and establishing a hub base for thier lives.In purchasing homes, they tied themselves to particular areas professionally that very quickly limited their professional expansion. They also found they'd purchased vs. invested - in the lifestyle with this person - in one case the relationship ended (not so amiably at first), in the other case the partner died unexpectedly in a car accident.Either way - both persons were left with houses they couldn't afford, really didn't want, with professional limitations on themselves, and struggling with financial matters. An investment in real estate is something you're going to turn around quickly and divest yourself of.A purchase in real estate should be made when a large majority of the significant issues in life are already established and solidified.

Magic Eight Ball
Beachbum, there are hidden expenses you don't have to deal with when you rent:Property Taxes, HOA fees (if any), Homeowner Insurance, and anything that can go wrong and needs to be fixed! Not having a down payment means extra mortgage insurance is added. I believe owning is better than just paying someone elses payments in renting, but you have to think this...will you be happy if the equity doesn't increase or you can't sell due to a downfall in the housing market? It is more of a buyers market now and would be a better time to buy, but it is getting harder to get a loan due to mortgage issues- so many people bought and are having to foreclose and the banks can't even pull equity out of the homes...

pixi-lou
At the point that you want to purchase a home, it'll obviously be one of you on the mortgage and that person legally liable for all expenses - unless you're legally married.This is not true. My two best friends (and next-door neighbors) are not married, and they are both on the mortgage and [supposedly] equally accountable.However, still, NEVER buy a house with someone you are not married to. That's a recipe for a future lawsuit.

beachbum77
BF and I just found another apartment!!! Thanks for all the advice...I'm def. not ready to buy a house yet...but hopefully in the near future :) I'll def. take into account all the advice/opinions I've been given and do some heavy research before we decide to buy!!!