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My beef on rent/buy arguments.


               
2011 May 15, 12:34pm   5,471 views  28 comments

by swebb   follow (0)  

They are, in a word, simplistic.

I will pick a few of my pet peeves.

1. If the price is less than X times annual rents, it's reasonable to buy.
I know this has been pointed out many times, but there is more to this than just rent and sales price. Interest rates (for one) play a big role, but this is often overlooked. Property taxes, HOA fees, too.

2. Using some fixed % figure for maintenance.
This one is the biggest pile of horse hockey. There are so many things wrong with this "rule of thumb"...The type of exterior is a good place to start. The environment/climate the house is in...and the big one -- the fact that in some places the land is worth (far) more than the structure...yet the 1% (or whatever) rule of thumb factors in the entire cost. I think this could be off by a factor of 2 in many cases..

3. "You can usually rent an equal house in the same neighborhood for less than you can buy"
Except for when you can't. I have found that it is rather difficult to rent a house in the neighborhoods I want to live in here in Denver. I did, however, find a house in a good school district and at a fair price. It's not really that nice, but in all it's fine. After a year and a half here we are facing the housing hunt again -- why? Because the owner is selling...So even when you can rent a house for less, there is no guarantee for how long.

Owning and renting aren't equivalent. Owners and renters aren't equivalent neighbors. I'm sure different as a renter than I was as an owner.

Ok, I feel better now.

#housing

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27   corntrollio   @   2011 Jun 6, 9:45am  

swebb says

So, I object to this fairy tale part of the “buy vs. rent” argument that gets sold daily.

You can object to it, but I think you'll find anything I personally have ever stated to be far more nuanced than a simple buy vs. rent calculation. I can't speak for other people.

28   Shawn   @   2011 Jun 6, 9:49am  

Katy Perry says

but what I really want to say is
“look I do rent and own zero of this house but in real numbers I own more of this house than you own of yours. Zero is a larger number than any Negitive number I know of,…right.”

Nice.

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