To Rent or Not to Rent???

Question

Me and my hubby to be are trying to decide what would be best,

to try and get a loan for a small one room trailer (we dont really have much credit built up at all!) (we're 19 and 21)

or

to just rent an apartment???

what do you think.. pros and cons?

Answer 1

What are the differences in cost for the apartment and the loan payment on the trailer? If the trailer is close to the same, no more than $100 a month more, it might be better to buy, because you will be building credit faster than paying rent. You may not build up much equity, or none at ll, since mobile homes tend to not go up in value. New ones depreciate as much as a card does. Existing depreciate much more slowly and may even hold steady while you pay down the note. But you will have to sell it at some point and retire that debt, and if you don't make your payments on time, it will hurt you toward buying a house later.

Renting has no financial benefits whatsoever except for no risk of losing money (should the value of the trailer be less than what you still owe when you go to sell it). When you buy a house, you can just move out, which is an advantage. You don't build up credit, as landlords don't report generally that you pay on time, but they often do report you if you don't pay. You're not hurt anywhere near as bad as defaulting on a loan, though.

Both options have plusses and minuses and a determining factor could be quality of life. There are some nice parks and some crappy ones, and the key is how nice a trailer in a nice park can you get for close to what a nice apartment will cost?

When I had my real estate license and counseled young buyers, I advised them to continue to rent something affordable that would let them save for a down payment and keep building their credit by making small credit card purchases for things they had the cash to pay for, like gas and groceries, but to make sure that cash went to pay the bill. I didn't advise mobile homes, but that is because the available quality options did not exist in this area. It may be different where you live, and worth considering.

Good luck!

Answer 2

This is different from the usual buy a small place or rent a better place question. Usually when you buy a place, it will at least keep its value and may go up in price before you sell it, so people will tell you that renting is throwing your money away--and if you buy, you pay interest and get most of the rest of your money back when you sell it. With the trailer, you'll get back less money when you sell, so it isn't the same thing.

The trailer is only worth it if you are buying real estate to put it on (and if that's the case, check into modular homes). It won't go up in value, and you need to find out how much you can expect it to go down. If the amount you'd pay in rent for the trailer lot and your trailer payment are equal or less than what the rent would be for the apartment it would be a good deal. But don't make yourself house poor by trying to own a trailer.

Apartments and trailers have a lot of the same disadvantages for general living--mainly the neighbors. Take a look around the places you would live and see which one you want to make your neighborhood. Another disadvantage to the trailer is that it would lock you in for the term of the loan unless you sold it--leaving an apartment will never take longer than your one year lease, and most apartments let you leave with two months notice and paying a penalty.

Answer 3

Generally speaking, the biggest pro in terms of buying is that it's an investment. But when buying a trailer the price will depreciate rather than appreciate, so you're already not receiving the main benefit of buying.

In addition, taking out a loan to buy the trailer puts you in a more tenuous financial position than if you are renting an apartment--you'll have much more flexibility to breake the lease on an apartment if you have to, while if you can't pay off the loan your credit will take the hit.

Answer 4

Rent CHEAP, save HARD, and in two to three years, you can BUY a house with a FICO score of 0, as long as:

1. You pay your rent EARLY or on time, EVERY MONTH

2. You put down at LEAST 20%

3. You apply for a 15 year FIXED rate mortgage with a payment of NO MORE THAN 25% of your TAKE HOME pay


To address some misconceptions:

"Renting has no financial benefits whatsoever except for no risk of losing money"

That is about the same as saying that food has no financial benefit whatsoever. They need a place to LIVE. Renting an apartment gives theme a place to live. Buying a trailer is a BAD financial plan. It is STUPID.

Answer 5

At your age, you should rent an apartment and in the meantime, build your credit and save for a down payment on something better than a trailer.

Answer 6

rent an apartment.
it'll be a way to build credit.
and a trailer.... no.
get an apartment because atleast you'll have help from the management for fixtures and maybe some utilities (depending on where you are, i dont have to pay the water bill cause the apt. covers it).
and you can prob find a decent apt community with nice people. trailors just dont make it... thats an arkansas thing.

Answer 7

Please save your money and when you have 10-20% to put down, look to purchase something. Meanwhile, build your credit, pay all your bills on time, and when you are ready qualifying for a loan will be far easier.Buying a home is not just about buying it...it is also about having enough money to stay in it and maintain it.

Also, always keep some credit in your name only...unfortunately we never know what will happen in our relationships and marriages.
Good Luck

Answer 8

Well, a trailer is never a good idea. They depreciate worse than a car.

Rent and save up your money and build your credit for a house.