Should I rent or buy?

Question

Ok, here's the deal. A good friend and I currently rent a two million dollar house on Wrightsville Beach, NC. It's right on the water, it has a boat slip, and it's great for having people over. However, I also feel like I'm throwing money away renting. So should I rent a two million dollar house, or buy a two hundred thousand dollar house?

Ok, I'm getting a lot of answers saying that the whole renting a 2 million dollar house is fishy. I live on Wrightsville Beach, NC. I pay $1300 oer month in rent. The tax value of the house is closer to $1.4 but the house could easily sell for 2. The house next door is on the water too, has one more bedroom, and is listed for 3. Wilmington and Wrightsville Beach are among the top ten property investments locations in the country right now. Anyway that is all beside the point. THe point is deciding between an incredible location (fabulous views, waterfront, being a block away from the beach) or the equity of home ownership.

Answer 1

So this was a $400,000 house just 4-5 years ago and the owner has to lag in raising the rent in order to keep it rented? Of course, you are getting a great deal renting now, but how long will it be before the rent is $2,500, then $3,000 and then $4,000 a month. Then you won't be able to afford to rent there.

While you have this great bargain renting start your search for an under valued property. It may take a while as all Beach properties (like Myrtle Beach where I live) have gone up 100%-300% in the last 4-5 years. And unlike some areas of the country show no sign of dropping. Hopefully, you will find a great property at a great price and be able to buy. That is your best bet for the long term.

In the meantime enjoy the great deal you have.

Answer 2

Just so you have a little background, I have been in the mortgage industry for more than 8yrs. Currently I am the Vice President of operations for a mortgage co.
The basics to this question is very simple. Everyone will tell you that it is better off to buy. But that is only if your lifestyle supports your purchase. If your lifestyle is changing say getting a family or you really want something that is yours, then purchase. If you like where your at, don't buy until your lifestyle changes enough to where you find yourself wanting to own. There are advantages to both. The question is what best fits you now? Then you have your answer.

Answer 3

The best thing you can do for yourself, it to ask your tax preparer. The interest deduction on a $200,000 home would not amount to much as a write-off. But, if you can buy a home and save thousands every year in taxes, plus eventually own a place outright. Than, it would not hurt you to take a look at what's available in your price range. If you find something you love, great.......But, your place sounds great, and I wouldn't pack any boxes quite yet. Who knows, if you invest your money wisely you may be able to buy the home your renting some day.

Answer 4

I'm not familiar with your market, but you describe it as "one of the top 10 investment places in the country". That, to me anyway, is a big sign for smart people to NOT buy. Speculators are likely a large portions of the buyers in your market, leaving you vulnerable to price declines in the future when the speculators flee to the next town.

If you plan on staying more than, say, 7 or 8 years, then I *might* consider buying in this market.

To all the responders who said buying is "always" better, I'm assuming you didn't buy in Southern California in the early 1990s. There was a big crash then, and currently prices starting to decline once again.

Answer 5

You rent a two million dollar house and all you can afford to buy is $200,000??? That makes no sense. Sounds like BS. Rent for a 2 million dollar home would be way more than a measly $1500 on a mortgage for a janky $200,000 house. Where do you live, Montana??

Answer 6

BUY my friend, BUY. And then rent out the house you buy, and rent the 2 million dollar house from your friend and live there. Who says you have to live in what you own? Once you have that first piece of property, it becomes easy to buy more. Just keep buying and renting or selling. Eventually, you will be able to buy your friend's 2 million dollar place.

Answer 7

Lol.

I always suggest buying over renting any day. Although obviously for lifestyle reasons you may prefer to rent.

Personally I would buy. But I'm an old married guy with kids... If I were young and single.. I think I'd have a different opinion :)

Answer 8

together as you have no commitments, marriage or little ones i could say to get into the valuables marketplace, in case you may handle to pay for to. Even an investment supplies. it rather is plenty tougher as quickly as you're taking the step to get married, have little ones (in case you ever replaced your ideas it extremely is) by way of fact the cost of living recently (nicely, we are in australia) is sooo costly. we are renting by way of fact we won't be able to purchase at this evaluate time yet i could say, in case you may handle to pay for to purchase, do it! A mate of mine is 24 and he's single, no little ones and he has labored his way as much as 3 investment residences so a ways. And he can handle to pay for to, too. He has no commitments rather. he's guffawing all a thank you to the economic employer!

Answer 9

well, those kind of figures are above my income. but=== buying is always preferable to renting, if you buy within your present and future means. you throw money away renting, and you gain equity when you own, i have always owned my own home, and always sold it for more than i paid for it, even after living in it for a no. of years. never regretted it.

Answer 10

2 million dollar home rentals are rare.

I would suspect anyone who can afford to do that would be better off owning something.