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Thread: Buying vs Renting

  1. #1
    Senior Member landrover's Avatar
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    Buying vs Renting

    I've already done the buy vs. rent calculators, but wanted member feedback. First, I'm a C4/5 quadriplegic. I currently live independently in a relatively upscale 2-br apartment. I have a steady, FT job that should be relatively secure. Rent is high, but given the cost of homes in this area ($250k-280k), the mortgage would be comparable. Last year I began setting aside $ for a downpayment, but I occasionally have second thoughts if buying a house is in my best interest. I'm in favor of owning a property with a little back yard, but I have to then pay for upkeep of that back yard, along with house maintenance/repairs, which now only require a quick phone call to resolve. I like the thought of owning, and doing what I wish to the house, along with the personal satisfaction of having a house. Thoughts?

  2. #2
    Senior Member willingtocope's Avatar
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    Age?

  3. #3
    According to "landrover's" profile he is 38 years old.

    Heard a report this morning on a business news program that referenced Trulia's Rent vs Buy Report: http://www.housingwire.com/articles/...r-than-renting
    There is an interactive map link in this article that is area/city specific. The map indicates that it is 46% cheaper to buy in Philadelphia than rent.
    "To compare the costs of owning and renting, Trulia?s model assumes buyers get a 4.5% mortgage rate on a 30-year FRM (Fixed Rate Mortgage) with 20% down payment. Further, it assumes buyers itemize their federal tax deductions and are in the 25% tax bracket; and will stay in their home for seven years. Under these assumptions, buying is 38% cheaper than renting nationwide, taking into account all of the costs and proceeds from buying or renting over the entire seven-year period."

    When mortgage rates are low and rents rise sharply (inventory of homes to buy is low) buying becomes cheaper than renting. The rent vs buy discussion changes with changes and fluctuations in the economy.

    Of course, a lot depends on what you buy. What is the general condition of homes in your area in your price range? You will want to consider the costs of a fixer upper vs. a home in good condition. Watch out for homes that look good cosmetically, but are a disaster under the skin. The most important words in real estate after Location, Location, Location are Inspection, Inspection, Inspection. Even if the house is in good condition, you will probably have to make alterations to most homes that able bodied buyers wouldn't have to spend money on right away. You will need certain accessibility features in place to stay independent.

    Here is a good article on how to estimate how much to save each year for home maintenance. The author recommends an average of the 1% rule and the square foot rule plus adding 10% for each of these factors that adversely affect your home (weather, condition, age, location, type). http://budgeting.about.com/od/budget...nd-Repairs.htm

    My injury level is at c6/7. I've owned two homes. One I owned for 4 years before my injury. I lived there a total of 12 years. I have lived in the home I own now for 24 years. Granted, Ive seen tremendous volatility in the housing market, but all in all I am satisfied with my decision to own vs rent.

    All the best,
    GJ

  4. #4
    Senior Member willingtocope's Avatar
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    Given a choice...I'd rather buy...but...

    Things don't always work out the way you plan. 7 yrs ago or so (age 62), my wife and I bought a house in a good market. The house needed work, but at the time, I was still mobile and we had experience both DIY and paying for remodeling. The house we bought was sound structurally and the pick of the litter in its price range. We didn't put much down, but figured the investment would grow.

    A couple years later, I get dx'd with MS. No DIY from me...and our spare cash went for my care. A couple more years, my wife passed away. So, I'm now living in an assisted living facility...and, I'm still paying on a house I can't live in and can't sell (the market has really dropped...I'm underwater by about $50k).

    So...IMO...consider your long term costs for dealing with your injuries coupled with the costs associated with living by yourself and paying for care of the house.

  5. #5
    We are a two paraplegic couple and have owned our own home for over 30 years. I love where we live, even satisfied with the costs for what we call our "paraplegic support team". These are about 7 folks who do various jobs for us for pay. We absolutely do not like having family or friends do work for us, and thankfully have the budget to allow for our workers. Several of the team members have been with us for years and things run well. Of course there's always the unexpected expense, such as new roof, big tree fall-down, but that's regular house ownership for you. We were in our late 30's when we bought our home, a fixer-upper. If you find a place you absolutely love, I say it's worth the trouble/expense.

  6. #6
    Super Moderator Sue Pendleton's Avatar
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    At the end of the tax year buying is better than renting for anyone who does not get all of their federal withholding refunded.

    GJ said inspection. Up that to a home inspector you choose not a real estate agent and one that will look in attics, down basements and up a ladder at roofs. You need a frame under the pretty paint jobs that can hold ceiling lifts when needed and bathrooms you can rip out and replace without mold under the tile. Get someone with general contracting experience.

    A well planned landscape can cut your maintenance costs considerably. Most nurseries will do the planning free or pay a landscape architect and then get a nursery to implement your plan as you can afford it. Trees with large leaves, evergreen bushes/flowers like hollies and azaleas along with grown coverings and mulch will keep the mowing bill to what you and a local teen can work out. Have a company or
    your nursery do a spring time spruce up of new mulch and fresh edging and skip the fertilizers that up licensing costs and your bill.

    Oh, and never buy anything with a flat roof unless you live in a desert.
    Courage doesn't always roar. Sometimes courage is the quiet voice at the end of the day saying, "I will try again tomorrow."

    Disclaimer: Answers, suggestions, and/or comments do not constitute medical advice expressed or implied and are based solely on my experiences as a SCI patient. Please consult your attending physician for medical advise and treatment. In the event of a medical emergency please call 911.

  7. #7
    Yes, buying is more than likely your best option. Plus you can make mods to the house for your injury to make it more comfortable for you without worrying about the landlord raising hell you changed things around with their place, they could make you put it back to original when you move out.
    "Life is about how you
    respond to not only the
    challenges you're dealt but
    the challenges you seek...If
    you have no goals, no
    mountains to climb, your
    soul dies".~Liz Fordred

  8. #8
    Senior Member lynnifer's Avatar
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    Bought and in love with where I live .. but never have any spare cash anymore! Had lots when renting. Something always needs to be fixed at home.
    Roses are red. Tacos are enjoyable. Don't blame immigrants, because you're unemployable.

    T-11 Flaccid Paraplegic due to TM July 1985 @ age 12

  9. #9
    Senior Member darty's Avatar
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    As a real estate investor I can tell you that in most cases owning a property is much better than renting a property. You can find all sorts of advice on real estate both pro and con all over the web but a simple rule of thumb is if you intend to stay in an area more than 5 years you should buy, under 5 years you should probably rent. Being a property owner regardless of if you have a mortgage or not offers several tax breaks, peace of mind, control of your own destiny, rental income, yearly deprecation of the property on your taxes and hopefully appreciation of the property's actual value. You need to know your numbers, buying a house or condo is not an emotional decision it's a financial one. Down Payment, Loan Amount, Points or no points, Term of mortgage, Closing cost, Property taxes, Title search, Insurance cost, Fix up cost, Maintenance cost, HOA fees if any and many more so take your time and do your due diligence.


    The first 3 rules of real estate are:

    1. Location
    2. Location
    3. Location

    No matter how nice the place is you cannot move the property! I would rather own the smallest house in the nicest neighborhood than the largest house in a poor or turning neighborhood.

    My .02

    P.S. Read Rich Dad Poor Dad by Robert Kiyosaki it's a good place to start
    ^^(A)^^

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