The Conservative Cave
Current Events => The DUmpster => Topic started by: ScubaGuy on August 07, 2011, 01:20:27 PM
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I love when the DUmmies discuss any economic issues.
Yes, I know there are situations where renting is a better choice than owning, but those situations are rare.
The smartest people on the Intertubes (http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1684198#1684331)
mzteris Donating Member (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Sun Aug-07-11 01:28 PM
Original message
owning a home vs renting...
Question - economically speaking, which is better in today's economic climate?
I have a home that is now "too big" - and some maintenance issues adding up, though each is not that large an issue, added up they're getting there. I didn't put it on the market with prices the way they are, but an acquaintance of mine is a Real Estate agent and has a family who needs a bigger house that may be interested in it "as is".
I probably wouldn't "make anything" out of the sale, but I should get about what I paid for it (I've been here three years). Though I probably wouldn't recoup what I put in to it when I moved in, either.
If I rent a condo for about what I'm paying for Mortgage plus what I set aside each month for Real Estate taxes (pretty high here), how does that play out in the long run economically? I'd no longer be able to deduct the interest (6.25) or the RE taxes portion, but how much is that really? How much less - if any - "less rent" (percentage wise) would I need to pay to come out even over the year?
Of course we wouldn't have to mow or shovel, or take care of the other maintenance issues (repairs) etc., either!
Just not sure in these economic times if it's better to hold on to the house - at least until the market turns around, or get rid of it while I have the chance!?!
I'm 55 & a single mom. Good job for now. (Though who knows anymore?) Plan on staying in the area for at least another 6 years. After that? Depends on where the kids all go.
Demeter Donating Member (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Sun Aug-07-11 01:35 PM
Response to Original message
2. If you have a mortgage, you are still renting
you are renting the money.
And as stated above, you still pay rent to the State in property taxes. Every year.
taught_me_patience Donating Member (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Sun Aug-07-11 01:40 PM
Response to Original message
5. You need to compare comparable costs
If the interest + taxes + maintenence - mortgage interest deduction > rent then you should rent. It's really that simple.
Interest = cost of "renting" money from the bank
taxes = cost of "renting" from the county
maintenence = unavoidable cost of owning
The nice thing about that 'rent' that I'm paying to the bank is that in less than ten years my 'rent' goes to $0.
Only a DUmmie would think that the landlord is paying for taxes and maintenance.
BiggJawn (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Sun Aug-07-11 02:09 PM
Response to Original message
20. Ask 12 people.
6 will say "Buy!"
6 will say "Rent!"
Me, personally, I'll rent the rest of my life. Tried the "American Dream" and got raped bloody by it.
I have a decent landlord. Repairs are taken care of in a few days, I do the simplest stuff (unclog drains, etc.) myself, it's a holdover from when I was a homeowner, but the big stuff I just call it in and it gets done.
Rent this month was the same it was 13 years ago.
But, as in all things, YMMV.
Sounds like 50% of DUmmie biggjawn are DUmmies too.
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Long story and it involves commercial property, not a home.
A distant relative was buying a building on a piece of prime real estate. He was making the payments and struggling along. A rich fellow I have worked for went to him and told him he needed to sell his property and rent/lease some space in his new mini-mall. Now I thought that was stupid so I asked him about it after he had sold and moved into 1/2 of the mini-mall.
Here's the deal. The rich guy explained how he had all this money tied up in real estate when what he really needed was more stock on the floor and in the warehouse to sell. The rent/lease was an expense right off the top where the real estate he was buying could only be depreciated over a 33 1/3 year time frame. He was paying income tax on a good portion of that real estate payment while he could deduct rent/lease payments.
Long story short...he has done damn well. As a matter of fact, after 5 years, the rich guy came back and explained to him how it would now be advantageous for him to purchase the mini-mall. ...and the rich guy financed it I think.
This is how the rich got that way and get richer....they think. They look and think about things from several angles.
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DH and I would like to buy but not knowing if he will be stationed somewhere else in a year is putting us on hold for home ownership for a while. We have great landlords but we want something that is ours.
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mzteris Donating Member (1000+ posts) Journal Click to send private message to this author Click to view this author's profile Click to add this author to your buddy list Click to add this author to your Ignore list Sun Aug-07-11 01:28 PM
Original message
owning a home vs renting...
Question - economically speaking, which is better in today's economic climate?
I have a home that is now "too big" - and some maintenance issues adding up, though each is not that large an issue, added up they're getting there. I didn't put it on the market with prices the way they are, but an acquaintance of mine is a Real Estate agent and has a family who needs a bigger house that may be interested in it "as is".
I probably wouldn't "make anything" out of the sale, but I should get about what I paid for it (I've been here three years). Though I probably wouldn't recoup what I put in to it when I moved in, either.
Gee, don't tell me, got divorced? Bought the home during the ridiculous market uptick thinking *the sky's the limit?* and then found out that using common sense would have been better?
:whatever:
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You bought it three years ago and it is suddenly too big? You were not thinking ahead DUmmie. Oh, and if you think you will get what you paid for it after only living in it three years in this economy you are an idiot.
And another thing, did you consider realtor fees when you were planning this? Take 6% (sometimes 5.5% if your Realtor is willing to take less) right off the top.
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DH and I would like to buy but not knowing if he will be stationed somewhere else in a year is putting us on hold for home ownership for a while. We have great landlords but we want something that is ours.
In a normal market, I'd say buy something where you KNOW you want to retire. But if you and husband still have several years to go, better to stock away money for down or paying cash for property outright. I'm going to make a wild guess and say that property values aren't going back up for a while (read: years.)
Had I stayed on AD, it would have been difficult for me, considering I would have likely done the Pearl/SD/Bremerton/Guam/possibly Yokosuka route. Only Bremerton about 10 years ago would have made any sense to buy a house still on AD.