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What's the problem with renting? Banks don't get their interest income; Realtors don't get their commission.

That's just plain un-American.

wthrfrk80 says

What's the problem with renting? Banks don't get their interest income; Realtors don't get their comission.

That's just plain un-American.

I agree with you. So, we either become a landlord or just play sheeple, right? (maybe both)

No problem at all if it is the best thing for you. I have been renting the last 6 years even though I own rental properties in a different area. The cost of renting vs buying in my area is nuts. But I put the difference in the bank which is where most people fall down.

2000 or years before that were definitely good buying times. However, maybe I did not point this out, I am talking about current market. For example, the house I am renting now is definitely underwater. There is no chance for him to sell this house and as long as I am paying the rent, there is no danger of foreclosure. Plus, due to the weak economy in my area, I do not see raise in rent. Therefore, the landlord is more like begging me to stay rather than wanting to kick me out. However, I understand the market in CA or other areas can be very different.

Mobi says

I do not see the drawbacks of renting from a FINANCIAL point of view.

Renting makes perfect sense in insane areas where the rental cost is lower compared to the mortgage.

Even in relatively reasonable areas where rental parity to house prices are there, it may still make sense to rent because of an uncertain job market, shaky economy etc.

Overall it is a combination of personal and logical choices that one needs to make between renting and buying.

Buying just shouldn't be ONLY personal (which basically fed the housing bubble and wreaked havoc on millions of people).

Do what's cheaper: renting the house, or renting the money to buy that house. Remember that a mortgage is just "renting" money, where the "rent" = interest. Like rent, interest is "money down the drain."

So do whichever option results in less "money down the drain." And like Uomo says above, be sure to factor in "risk." Buying is often riskier if you live in an area with a volatile RE market. Or if you have a less-than-secure job.

Why I rent:

- Moving is easier if I need to or want to. Job loss, bad neighbors, crime, etc.
- Don't have to worry about unexpected payments to fix/replace things such as water heater, furnace, sewer pipes, etc.
- I believe property values have a long way to fall, and don't want to buy into a depreciating asset.
- There are no homes worth the money to "own" where I live (Bay Area)

But I don't always want to be a renter. One day I'd like to buy. Here's what needs to happen, though:

- It's where I'd want to live for the next 30+ years.
- The price is not bubbliciously high
- It's in an area where I don't have to make extremely top dollar just to be able to afford a fixer-upper.

Right now the Bay Area violates all three of those above. I'm happy renting here, but there are absolutely no homes I'd want to own for the prices currently being asked, and while I wouldn't say I make "top dollar", it's up there.

This is another one of those gray area questions. For some people buying is better. For others renting is better. Its going to boil down to individual situations. For example, we've been renting the same 4 BR house for 9 years and never had the rent raised. We share with a housemate who is seldom home. Our rent as a couple is $1100 per month. That is almost unheard of today. Even if we bought the absolute cheapest house in our area the cost of buying would be drastically more than what we now pay. We make good incomes and as a result of having low monthly expenditures thanks to cheap rent we manage to save almost half our incomes. At this point we could very easily buy a house in the Bay Area. Its just that for us its like- why? As long as the situation we're in doesn't change we're still paying significantly less for housing regardless of renting or buying.

Everyone's situation is different

I think stability is an issue for renters. What about the landlord kicking me out or selling the house or raising the rent. Here is what I did (intenationally or unintentionally) to help the situation:

1. Rent a house which is underwater. So, the landlord does not have a chance to sell the house. (For some of those houses, the landlords are forced to rent them b/c they tried selling but in vain. You can easily tell from the listing history.)

2. Pay them reasonable rent so the house (hopefully) does not go into foreclosure/short sale. Luckily, the housing price in my area is not insane so I'm pretty sure my rent covers it up.

3. Lock up longer term contract (longer than a year) if you like the house and are confident about the job security.

wthrfrk80 says

Do what's cheaper: renting the house, or renting the money to buy that house. Remember that a mortgage is just "renting" money, where the "rent" = interest. Like rent, interest is "money down the drain."

So do whichever option results in less "money down the drain." And like Uomo says above, be sure to factor in "risk." Buying is often riskier if you live in an area with a volatile RE market. Or if you have a less-than-secure job.

More often than not, living in an area where rents are high because the demand is high (buying may or may not be even higher) is the real issue.

It's just as Michael Bloomberg and Judd Gregg have both said in the last year or so. We are handing to our children a nation in which they will not be able to afford to live.

It's a lot of things. It's the Baby Boomer money being handed to the next generation, especially in places like Danville, Alamo and Walnut Creek. It's all those Dollars coming back to us from China.

Had we not been at the right place at the right time, we would have continued to rent or left the area. We may have ended up building a house in Ramona.

Yes, stability is an issue. I don't like up and moving unexpectedly, especially with kids. But I'd hate more to be tied to a house I hate living in.

I don't think the house I'm living in is underwater (landlords bought in '97), but I don't know the re-fi/equity loan status.

I pay reasonable to possibly just a tad higher than the going rate. It's hard to determine going rate, though, as rents do seem unstable (high/low... erratic)

I don't know if I'd want to sign a two year lease, but I'd consider it. If they kept the rent the same (or even lowered it a bit)... maybe. I'm not one to call the landlord unless it's a major thing (nothing so far, yet, thankfully), so, to them, I'm a check they get every month. I'm hands off and that's how I like it, and I have to think they do, too.

generallyfd says

I don't know if I'd want to sign a two year lease, but I'd consider it. If they kept the rent the same (or even lowered it a bit)... maybe. I'm not one to call the landlord unless it's a major thing (nothing so far, yet, thankfully), so, to them, I'm a check they get every month. I'm hands off and that's how I like it, and I have to think they do, too.

I just signed a 18 month lease and got a $50 off monthly. I tried not to bother the landlord too much, too.

rootvg says

More often than not, living in an area where rents are high because the demand is high (buying may or may not be even higher) is the real issue.

Agree with you. That creates unstability or rent raise. But those are the areas with jobs. So, I guess that's one reason to struggle between rent & buy.

The problem I have with renting is there's no way to improve your lifestyle without spending money on pure consumption items.

I'm constantly improving my environment with upgrades to the house. About to purchase a $200 hanging pendant light fixure for the kitchen. A new toto eco drake low flow toilet. I can do these things without a ton of regret because it adds value to the house.

When you're renting the only way to improve your environment is by spending money on money losing items like a big screen TV or new sofa.
I guess you could move to a new rental and pay more money in rent but that's not much better.

That doesn't make any sense. Of course, you never do.

toothfairy says

The problem I have with renting is there's no way to improve your lifestyle without spending money on pure consumption items.

Of course there is. We've landscaped the back yard, painted the bathrooms, installed antique light fixtures ( which we will take with us when we move), decorated the interior with antiques, built shelves, and so on. Yes we rent. But that doesn't mean we can't have pretty much the exact same lifestyle as a homeowner.

You landscaped your landlords backyard? You mean you planted flowers i doubt your ll would alLow you to relandscape

toothfairy says

The problem I have with renting is there's no way to improve your lifestyle without spending money on pure consumption items.

No way is too strong of a word but I see where you come from. To be honest, I might have bought a house with 3.5% down had I live in a non-recourse state. Living in a recourse state makes me think twice.