2006-08-30 07:14:57 · 50 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
Buy vs. Rent.
As housing market slump, it is easier to calculate "Rent vs. Buy" scenario. Because "appreciation" is no longer a factor.
Mortgage payment consists of two parts: interests and principal. Interests are like rent, which doesn't add to the equity to your house. It simply disappear as your pay it.
If interests portion of the mortgage payment is roughly equal to rent of equivalent property, then it is a decent buy.
For example, let's buy a $500,000 condo with 0% down and apply interests only loan (just like renting a place). Mortgage payment would be $3250/month. It is a bad buy, because you can enjoy same property for $2000/month.
Please note that I assume the tax benefits from home cancel out fees from home association and property tax. For more accurate calculation, consult with your CPA or accountant. But NOT your realtor, whom will say anything to get the deal to go through.
And again, if you like a particular property, then paying more may be reasonable. You are the only person who can decide how much more premium you are willing to pay.
2006-08-30 09:44:32 · answer #1 · answered by Price is what you pay for value. 3 · 0⤊ 1⤋
If you're willing to pay for the present average rent, you might as well buy your own house.
If you're budget is less than $1,000 only per month, buy a preforeclusure house or buy a condo.
Buying doesn't normally means that you're stuck with it for 15/30 yrs. You can sell your house after 2/3 yrs depending on your prepayment penalty (so you don't have to pay it) and buy a much better one. You can also refinance to get some cash and use that cash to do some uprades in your house or buy other houses/ condos for rentals.
It is the buyer's market this year, so take advantage of it if you're ready. You can get 100% financing wether or not you're a first time home buyer or an investor. Just talk to the right people...
2006-08-30 08:28:48 · answer #2 · answered by janette_d 1 · 0⤊ 0⤋
A house will always bring you equity and even with a mortgage will always earn you money and be an investment.
Mind you very few people starting out can earn enough to buy in today's world...so renting is obviously cheaper.
If it doesn't matter to you whether you end up with anything by the time your life is over...then rent...you're not paying for taxes...you're not paying interest...you don't have to pay for home repairs which cost you an arm and a leg...you can move any time you want without paying all those lawyer fees and taxes etc.
But if you own and when it's yours...as you age you'll appreciate having it there as you may need to re-mortgage and borrow from it...especially when you got kids going off to college or university...so if you can afford the downpayment, it's better to let your money work for you.
2006-08-30 07:25:00 · answer #3 · answered by Anonymous · 0⤊ 0⤋
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2016-07-19 05:51:14 · answer #4 · answered by ? 3 · 0⤊ 0⤋
If you buy a house with a small deposit and a 25 year mortgage you can expect to pay about three times the amount of the home. Therefore, you need to consider the cost of the house over the long term and whether you would be better off renting somewhere and investing the difference you would pay towards the mortgage, taxes and fees if you want a home for more emotional reasons. If you are strictly looking at it as an investment and you have the opportunity to buy something that you are willing to part with when the value goes up it can be the better route.
2006-08-30 07:27:14 · answer #5 · answered by superrrmodel 4 · 0⤊ 0⤋
Depends on what you want.
Buying, to me, is always better because your not throwing that money away, it's going to you owning what your paying for.
Renting is like putting cash in the trash can each month. You never see it again.
However, Renting is usually less expensive monthly (unless someone charges you more in rent than their mortgage is) and you can rent just about anywhere, whereas to own a home you need a loan from a bank or some pretty large amounts of cash on hand.
2006-08-30 07:18:17 · answer #6 · answered by Kevin J 5 · 1⤊ 0⤋
Whatever you can afford. Buying is a good option if you have the money to do it. Not just the down payment and the monthly payment, but also money to pay for things that break and need to be fixed.
Renting is good for those on a fixed income that can not afford to have multi-thousand dollar repairs. Leave that for the landlord.
however if you rent you are just paying someone elses mortgage.
Right now where I live you can rent cheaper than you can buy. So that is not a good time to buy. The mortage on my house would be about 2400 if I bought it today, and I can only rent it for about 1800.
2006-08-30 07:25:28 · answer #7 · answered by Anonymous · 0⤊ 0⤋
It all depends on how long you plan on living there. If you plan on staying less that 3 years, then renting is better. If it's more than 3 years then you should buy a house and build up equity. That way when and if you decide to sell the house later, your house will be worth more and you can save money when filing your income tax.
2006-08-30 07:19:53 · answer #8 · answered by mandm 5 · 0⤊ 0⤋
It depends on your prospective and how much money you have. Buying is great. You are building equity in something for the long term, and real estate is one thing that can't be manufactured. On the other hand, you are also buying all the expense of upkeep and repair, which can bankrupt you and make you to lose everything including the house. Renting on the other hand, is a simple, 'pay your rent and enjoy'.
2006-08-30 07:29:45 · answer #9 · answered by oldman 7 · 0⤊ 0⤋
Buy a house and then rent it. And then rent. Do it for 5 years. Its amazing what happens.
2006-08-30 07:20:21 · answer #10 · answered by Anonymous · 0⤊ 0⤋