Renting vs owning

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Lablover0505
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Renting vs owning

Post by Lablover0505 » Thu Oct 23, 2014 3:39 pm

I was wondering how many bogleheads rent by choice? I have owned two homes before ( sold both at a profit), yet I am currently renting and am enjoying it. I am taking the difference in monthly expenses--about $ 1000 per month ( I live in a high cost of living area) and investing it.

Any others doing the same? Is it possible for me to come out ahead in the long run if I continued to do this?

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max12377
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Re: Renting vs owning

Post by max12377 » Thu Oct 23, 2014 3:53 pm

I am renting by choice. I love it. In my area it's cheaper to buy but I don't care. I am a single guy and renting is perfect for my lifestyle. I have owned 2 houses over my lifetime and it would take a lot for me to jump into another. Right now I have no worries about lawn maintenance, home repair, snow removal, multiple trips to home depot... & I don't miss any of that!

So although I would likely benefit financially by owning a home, the fact that my stress level has dropped significantly after I started renting makes it worth every penny. Now I get to go on weekend trips on a whim and worry very little.

I will also add that I am in a townhouse style apartment, so no one is above or below. It's a quiet complex. Someday that all may change but so far so good.

Rodc
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Re: Renting vs owning

Post by Rodc » Thu Oct 23, 2014 4:02 pm

There are many pros and cons, which is a better financial deal in the long run is highly location dependent, or even highly specific property dependent. And as noted above it is also a lifestyle choice, some would even say mostly a lifestyle choice.

There is nothing generically wrong or right with renting.

If it is working for you great. And if at some point it stops working, well, you can stop renting. :)

You might try doing a site search: there have been many fairly heated discussions, or at least very long partisan discussions.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

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Re: Renting vs owning

Post by placeholder » Thu Oct 23, 2014 4:38 pm


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Phineas J. Whoopee
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Re: Renting vs owning

Post by Phineas J. Whoopee » Thu Oct 23, 2014 5:08 pm

I rented by choice for a couple of decades, in four different regions of the US, until I settled on the location in which I want to stay, and found what was, for me, a compelling deal. The seller, who had the place on the market for over a year when I made the offer one mid-December, didn't know it was compelling for me, but I knew it was so for them, so I negotiated yet further compelosity, followed by their fixing every issue my real-estate-attorney-recommended licensed professional home inspector discovered.

I achieved my primary goal in the transaction, which was to live somewhere I like the inside of, in a serviceable if not fashionable neighborhood, at low enough cost that I can save dramatically more toward retirement, while not needing to accumulate nearly so large a nest egg.

I was clear with myself I wasn't looking for a starter home, but for a finisher.

I'm happy with my earlier self's decisions to rent, for then, and to buy, for here on out.

To the OP: in real estate the three things that matter are location, location, and location. In personal finance, they're personal circumstances, personal circumstances, and personal circumstances. If renting works for you, I say keep doing it.

PJW

tj
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Re: Renting vs owning

Post by tj » Thu Oct 23, 2014 9:00 pm

max12377 wrote:I am renting by choice. I love it. In my area it's cheaper to buy but I don't care. I am a single guy and renting is perfect for my lifestyle. I have owned 2 houses over my lifetime and it would take a lot for me to jump into another. Right now I have no worries about lawn maintenance, home repair, snow removal, multiple trips to home depot... & I don't miss any of that!

So although I would likely benefit financially by owning a home, the fact that my stress level has dropped significantly after I started renting makes it worth every penny. Now I get to go on weekend trips on a whim and worry very little.

I will also add that I am in a townhouse style apartment, so no one is above or below. It's a quiet complex. Someday that all may change but so far so good.
Why not buy a townhouse? I mean, if it's financially beneficial and you won't have all the maintenance,

avalpert
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Re: Renting vs owning

Post by avalpert » Thu Oct 23, 2014 10:08 pm

tj wrote: Why not buy a townhouse? I mean, if it's financially beneficial
Without knowing the current price and rent of the townhouse in question how on earth can you know that? It could be financially detrimental just as easily as it can be beneficial.

AddingUp
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Re: Renting vs owning

Post by AddingUp » Thu Oct 23, 2014 10:41 pm

I rent by choice….happily. I like to go away on weekends and take vacations without worrying about a vacant house. Over the years, I've lived primarily in apartment complexes so I deal with a management office instead of an independent landlord. I've often thought about buying a house, but I'm not keen on doing maintenance, and I like my free time to be truly free.

That said, a great advantage of owning a house is that no one enters your home without your key and your permission. The place where I currently live allows the maintenance guys to perform semi-annual inspections so, during these times, they can enter units when tenants aren't home to check air filters/replace smoke alarm batteries, etc. I honestly don't care for this policy. I know this also occurs in condo complexes (as I used to rent a unit in such a place). I would never own a condo for this reason! If I buy a place, I do not want anyone to enter when I'm not home. Not sure if this happens in townhouses as well, but it's an uncomfortable situation.

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Zabar
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Re: Renting vs owning

Post by Zabar » Thu Oct 23, 2014 11:59 pm

I rent by choice. I've owned a condo loft in a converted warehouse (Minneapolis) and a large Victorian house (Boston suburb). Right now, I'm renting a condo in a HCOL area at a discounted rate. (The owner is a relative who likes having a tenant he can really trust.)

I used to feel driven to live in a place that I owned. Now I feel much less so, and enjoy the flexibility of having more-liquid investments with minimal transaction costs.
Lablover0505 wrote:Is it possible for me to come out ahead in the long run if I continued to do this?
It depends upon what you mean by "ahead." Lots of variables here are unknowable, e.g., future value of home, future value of other investments. But by investing an extra $1K/month, as you state, you'll probably do just fine.

Rodc
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Re: Renting vs owning

Post by Rodc » Fri Oct 24, 2014 7:36 am

avalpert wrote:
tj wrote: Why not buy a townhouse? I mean, if it's financially beneficial
Without knowing the current price and rent of the townhouse in question how on earth can you know that? It could be financially detrimental just as easily as it can be beneficial.
Well, tj is responding to someone who said, "In my area it's cheaper to buy but I don't care."

I don't see how you can fault tj for simply accepting what max12377 stated as a fact for their situation.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

dolphinsaremammals
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Re: Renting vs owning

Post by dolphinsaremammals » Fri Oct 24, 2014 7:59 am

I rented for a number of years involving two apartments. The lack of privacy is a big reason why I would not do so again. I know managers/landlords are supposed to give you sufficient notice before entering an apartment, but that was very laxly observed in both cases. I really don't want someone basically having access to my living space on demand and my having to rush to get dressed and so forth. In one case the manager was in the apartment and I was not aware of it because I hadn't heard him knock because I was in another room with the door closed.

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Phineas J. Whoopee
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Re: Renting vs owning

Post by Phineas J. Whoopee » Fri Oct 24, 2014 2:04 pm

Naturally this thread has, as most similar ones seem to do, descended into a comparison of free-standing houses, or in one instance row houses, with apartments in a complex.

One can rent a house. One can buy an apartment.

If we're arguing over whether houses or apartments are better let's at least be explicit about the fact.

PJW

stoptothink
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Re: Renting vs owning

Post by stoptothink » Fri Oct 24, 2014 2:20 pm

We currently rent by choice. Have a 2.5yr old and a second child due in the spring. While I believe that I will be at my employer for a long time, my wife is just venturing into a new industry (pharm sales) and we are going to see how that works out. While we do think we will stay in the area, if her career blows up we could move.

We have over the past year saved nearly enough (should be there in ~3 months) in cash to be able to put 20% down on a home in our range. Our current rent is probably about 10% more than we would pay on a 30yr FRM for the same residence, but we both enjoy that we are not responsible for any of the maintenance and in the past year there has been a ton. I could be perfectly happy renting our entire lives, but she really wants to buy; we are just waiting until we have strong inclinations that we are going to be here for a long time.

Ignatious P. Daily
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Re: Renting vs owning

Post by Ignatious P. Daily » Fri Oct 24, 2014 2:29 pm

I rented by choice for many years. When I was single and in my 20's I didnt want to be house poor or confined to one area. I wanted to be able to move an explore. When I got married, my wife and I wanted to live in the trendy part of the city with the great food, bars, and brunch. Again, did not know if we wanted to stay for a long time and chose to rent. Then just a few months ago we had a baby. Priorities changed. Wanted great schools, good weather, slower pace of life. Bars became less of a priority. We moved one last time and just bought a house for cash. We wanted to customize the home and have stability for our baby.

In total I moved 9 times in the last 18 years. I have loved every place I moved and feel that I really got to explore myself. I will likely stay put for the next 18 years. Who knows after that. May just go buy enough time share points at the Ritz to travel the globe year round living wherever we want, whenever we want. Maybe not.

Hope this helps

Rodc
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Re: Renting vs owning

Post by Rodc » Fri Oct 24, 2014 3:11 pm

If we're arguing over whether houses or apartments are better let's at least be explicit about the fact
Compared to other such threads I'm not seeing "argue". Also all I see is people giving the specific of their own experience for contex, which in some cases is with apartments, townhouses or free standing houses. I don't see an argument about which is better.
We live a world with knowledge of the future markets has less than one significant figure. And people will still and always demand answers to three significant digits.

retired recently
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Re: Renting vs owning

Post by retired recently » Fri Oct 24, 2014 5:00 pm

I lived overseas for most of my working career and lived in a rental. When I moved back we bought a house after renting condos for a few years. I like the privacy a free standing home offers compared to the condo. The noise used to be nonexistent where I live until neighbors moved in with barking dogs so that plus is gone (I now really dislike dogs, although I realize it is really their owners I dislike...). It seems every month or three, something breaks which I need to either fix, get fixed or replace.

We will probably keep this house until my son goes to college, then I think we will sell and downsize and hopefully travel quite a bit. I do not think I will buy another house, I preferred renting.

tj
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Re: Renting vs owning

Post by tj » Fri Oct 24, 2014 5:39 pm

avalpert wrote:
tj wrote: Why not buy a townhouse? I mean, if it's financially beneficial
Without knowing the current price and rent of the townhouse in question how on earth can you know that? It could be financially detrimental just as easily as it can be beneficial.
I don't. I was referring to the quoted poster's own words, "So although I would likely benefit financially by owning a home,"

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