Indecisive Newbie: Rent or Buy a home?

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BogleMePls
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Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Wed May 02, 2012 12:52 am

I've been torn over this for many months now. I am a single male just turned 30, good stable job making $64,000 a year. This year I've also accumulated $16,000 in freelance.

I have saved $45,000 which I keep liquid in my savings account and also have about $8,000 in my checking which I use to pay revolving debt (roughly $3,000 a month - I know i know not boglizing my budgeting yet). I contribute about $500 pre-tax dollars a month to my 401k which I have accumulated approximately $18,000 in.

I have $8,000 left on a car loan which I pay $400 a month at 2.3% APR. Other than that I have no other debt.

I currently live in a house that my roommate owns. I pay approximately $650/mo and reside out in suburbia living the hermit life. I want to move closer to town which rent looks to be $1,000 to $1,200. This is quite the drastic change, but I believe I can handle it.

Right now, I am also throwing around the idea of purchasing a home which I would like to keep under $200,000 (preferably $150,000 + 20-30,000 in renovations to be rolled into the loan).

According to those numbers http://www.nytimes.com/interactive/busi ... lator.html this site says it would roughly take 4 years before owning became more beneficial than renting.

What do you guys think?

BogleMePls
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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Wed May 02, 2012 11:00 am

Yay my first post got approved but it seems like its timestamped when I first posted and awaited approval :(

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bottlecap
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Re: Indecisive Newbie: Rent or Buy a home?

Post by bottlecap » Wed May 02, 2012 11:17 am

Welcome to the forum. You seem to be on the right road.

You have to ask yourself:

How long will I be living there? Does that justify the loan fees and realtor comission?

What other expenses will there be? Will I cut my own lawn and do my own maintenance? What is insurance like in my area?

What are the taxes? Will their be homeowners fees?

Will I have to spend money to furnish it?

Owning a house can be time consuming and requires at least a few thousand a year in maintenance, especially if youre not buying new construction. Its not for every 30 year old.

Good luck,

JT

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Re: Indecisive Newbie: Rent or Buy a home?

Post by NorCalDad » Wed May 02, 2012 11:26 am

bottlecap makes good points. Since you're 30, I'd also ask whether starting a family is a possibility. If so, is the home you're looking at one that you can grow into?

How much money will you put down? Will this leave you enough for emergencies?

Also, it will be difficult for you to "roll in" additional borrowing for renovation/repairs on a first mortgage unless you use something like an FHA 203k loan, which comes at a higher interest rate.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by epilnk » Wed May 02, 2012 2:30 pm

Rent.

This answer is based less on your post than on how you chose to title your post. In my opinion, an indecisive newbie should always rent. Once you get to the point where your instinctive response is, "But I don't want to rent! I'm done with renting and ready for ownership!", that's when you should begin calculating affordability. If you're even a little bit on the fence, rent the fence.

NoVa Lurker
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Re: Indecisive Newbie: Rent or Buy a home?

Post by NoVa Lurker » Wed May 02, 2012 3:05 pm

Do you think you might get married and have kids at some point during your 30s?

Now: Single male, 30, looking to live alone closer to town.

In five years, you might be: engaged/married male, 35, looking to live in the suburbs.

Unless you are sure that marriage/kids is not in your future, I would rent for now. Live in the cheapest place where you would not be embarrassed to bring home a prospective significant other.

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Kashi
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Re: Indecisive Newbie: Rent or Buy a home?

Post by Kashi » Wed May 02, 2012 3:12 pm

NoVa Lurker wrote:Do you think you might get married and have kids at some point during your 30s?

Now: Single male, 30, looking to live alone closer to town.

In five years, you might be: engaged/married male, 35, looking to live in the suburbs.

Unless you are sure that marriage/kids is not in your future, I would rent for now. Live in the cheapest place where you would not be embarrassed to bring home a prospective significant other.
+1 It's difficult to predict what you will want even just 2 years from now. My 30's has taught me to stay flexible for career/geography/relationship changes.

BogleMePls
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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Wed May 02, 2012 3:44 pm

bottlecap wrote:Welcome to the forum. You seem to be on the right road.

You have to ask yourself:

How long will I be living there? Does that justify the loan fees and realtor comission?
At least 3-5 years, I dont foresee myself starting a family any sooner than that. Even if that does occur I would like to think I have sufficient space until the child is ready for school.
What other expenses will there be? Will I cut my own lawn and do my own maintenance? What is insurance like in my area?

Insurance is looking to be approximately $700 a year, taxes looking to be approximately $4,000 a year. Broken down monthly the cost $1,167 (which includes mortgage, maintenance, insurance, and property taxes). Add in $900 a year for renovations and fixes (0.5% of the cost of the house)

What are the taxes? Will their be homeowners fees?

Most likely some furnishing but that will be over time and most likely used.
Will I have to spend money to furnish it?

Owning a house can be time consuming and requires at least a few thousand a year in maintenance, especially if youre not buying new construction. Its not for every 30 year old.

Good luck,

JT

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Wed May 02, 2012 3:46 pm

Okay for the sake of the discussion, lets say I went the renting route. What do you guys suggest I do with the current savings? My emergency fund should be sufficient @ $10,000, which leaves $30,000+ for investment.

I assume the first thing is to max out the ROTH IRA and the 401k?

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rdmayo21
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Re: Indecisive Newbie: Rent or Buy a home?

Post by rdmayo21 » Wed May 02, 2012 3:55 pm

BogleMePls wrote:Okay for the sake of the discussion, lets say I went the renting route. What do you guys suggest I do with the current savings? My emergency fund should be sufficient @ $10,000, which leaves $30,000+ for investment.

I assume the first thing is to max out the ROTH IRA and the 401k?
It all depends on your goals. If your goal is to be financially independent, then maxing out the Roth IRA and 401k is a fantastic idea.

BogleMePls
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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Wed May 02, 2012 3:56 pm

Forgot to mention, that currently our city is 97% occupied and rentals are experiencing the best #s since 2001. So there are many reasons to buy vs rent. Especially if I live there for a few years and then turn it into an investment property.

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Noobvestor
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Re: Indecisive Newbie: Rent or Buy a home?

Post by Noobvestor » Wed May 02, 2012 10:51 pm

BogleMePls wrote:I've been torn over this for many months now. I am a single male just turned 30, good stable job making $64,000 a year. This year I've also accumulated $16,000 in freelance.

I have saved $45,000 which I keep liquid in my savings account and also have about $8,000 in my checking which I use to pay revolving debt (roughly $3,000 a month - I know i know not boglizing my budgeting yet). I contribute about $500 pre-tax dollars a month to my 401k which I have accumulated approximately $18,000 in.

I have $8,000 left on a car loan which I pay $400 a month at 2.3% APR. Other than that I have no other debt.

I currently live in a house that my roommate owns. I pay approximately $650/mo and reside out in suburbia living the hermit life. I want to move closer to town which rent looks to be $1,000 to $1,200. This is quite the drastic change, but I believe I can handle it.

Right now, I am also throwing around the idea of purchasing a home which I would like to keep under $200,000 (preferably $150,000 + 20-30,000 in renovations to be rolled into the loan).

According to those numbers http://www.nytimes.com/interactive/busi ... lator.html this site says it would roughly take 4 years before owning became more beneficial than renting.

What do you guys think?
Look up the rent/buy ratio in your city/town - they vary dramatically from one to the next. In NYC if you could own at $200,000 something you could rent for $1,200 you'd have a great deal on your hands ... in Minneapolis, it would be a total ripoff.

http://explore.trulia.com/datavis/rentvsbuy/Q2-2011/

Personally, I think you should rent to get a better idea of what you want out of your own place and ease into things - that, or set your sights on a cheaper home. Exception if you are confident you know what you want AND that you want to be in the area for the long haul.
"In the absence of clarity, diversification is the only logical strategy" -= Larry Swedroe

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Watty
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Re: Indecisive Newbie: Rent or Buy a home?

Post by Watty » Wed May 02, 2012 11:55 pm

You would be hard pressed to come up with the 20% down payment to get the best mortgage rate and pay the closing costs, and furnish the house, and still have a good emergency fund.

I would keep renting (where is up to you) but try to live on a budget as if you had bought a house and to save like crazy for the next year. In a year you might be in a better position to buy a house without getting too strapped for cash.

BogleMePls
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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Thu May 03, 2012 12:48 am

Noobvestor wrote:
Look up the rent/buy ratio in your city/town - they vary dramatically from one to the next. In NYC if you could own at $200,000 something you could rent for $1,200 you'd have a great deal on your hands ... in Minneapolis, it would be a total ripoff.

http://explore.trulia.com/datavis/rentvsbuy/Q2-2011/

Personally, I think you should rent to get a better idea of what you want out of your own place and ease into things - that, or set your sights on a cheaper home. Exception if you are confident you know what you want AND that you want to be in the area for the long haul.
Thanks for that Link Noob. My city currently has an index of 14. In the scenario I am looking at its roughly 12.5 - 13.75 as far as the index goes. Seems okay to me?

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Thu May 03, 2012 12:51 am

Watty wrote:You would be hard pressed to come up with the 20% down payment to get the best mortgage rate and pay the closing costs, and furnish the house, and still have a good emergency fund.

I would keep renting (where is up to you) but try to live on a budget as if you had bought a house and to save like crazy for the next year. In a year you might be in a better position to buy a house without getting too strapped for cash.
Assuming I find a $180,000 I would attempt to negotiate closing into the price. So I would be looking at $36,000 down leaving me $10,000 for furnishing and more importantly the EF. My goal is to move into a house roughly 1200-1400 sqft so furnishing should be minimal since I already have most of my bedroom and some living room furniture (TV, entertainment etc).

I think that could def work or am I missing something?

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Babakhani
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Re: Indecisive Newbie: Rent or Buy a home?

Post by Babakhani » Thu May 03, 2012 8:54 am

The buy vs rent question :oops:

I used to be on the buy side but now that I have paid off my house, I am on the rent side. I have a very stable situation as well. But even after I have paid off my house, I pay about $1200/ month in taxes and association fees. That in itself is a rent. I grant u that I have a big house, but with rent:

1. U can move whenever you want
2. Change houses whenever you want
3. Invest the principle you were going to pay and the down payment
4. Not worry about school districts and such. Have a kid? Rent in the district with great schools.
5. Not worry about associations rules :twisted:
6. Still can decorate and paint as you wish. Just paint it back when moving out if the landlord wants to.
7. Not worry about the property taxes. It's included in your rent but u know what u will pay when you are shopping.
8. Did I say you have flexibility?
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Re: Indecisive Newbie: Rent or Buy a home?

Post by TomatoTomahto » Thu May 03, 2012 9:41 am

Babakhani wrote:The buy vs rent question :oops:

I used to be on the buy side but now that I have paid off my house, I am on the rent side. I have a very stable situation as well. But even after I have paid off my house, I pay about $1200/ month in taxes and association fees. That in itself is a rent. I grant u that I have a big house, but with rent:

1. U can move whenever you want
2. Change houses whenever you want
3. Invest the principle you were going to pay and the down payment
4. Not worry about school districts and such. Have a kid? Rent in the district with great schools.
5. Not worry about associations rules :twisted:
6. Still can decorate and paint as you wish. Just paint it back when moving out if the landlord wants to.
7. Not worry about the property taxes. It's included in your rent but u know what u will pay when you are shopping.
8. Did I say you have flexibility?
+1 BIG TIME.
Those calculators don't place any value on "liquidity." Especially in today's job market, the ability to move with (at most) a lease-breaking penalty is huge. I don't know what the proper valuation is for liquidity, but I know it's a non-zero amount.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by Shireman28 » Thu May 03, 2012 10:01 am

Unless you're stealing a foreclosure for 60% of market price, I'd wait on buying the house.

It's better to rent a nice place and stay flexible until your life partner comes along. I did the opposite, and regret it.

pkh01l
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Re: Indecisive Newbie: Rent or Buy a home?

Post by pkh01l » Thu May 03, 2012 12:05 pm

Kashi wrote:
NoVa Lurker wrote:Do you think you might get married and have kids at some point during your 30s?

Now: Single male, 30, looking to live alone closer to town.

In five years, you might be: engaged/married male, 35, looking to live in the suburbs.

Unless you are sure that marriage/kids is not in your future, I would rent for now. Live in the cheapest place where you would not be embarrassed to bring home a prospective significant other.
+1 It's difficult to predict what you will want even just 2 years from now. My 30's has taught me to stay flexible for career/geography/relationship changes.
Agreed. Single, 30 and want to live close to "town" would be all I would need to hear to advise you to rent.

I am 44 and been divorced since 29. Five years ago I was debt free, living in a nice condo and happy as could be. All of my friends and co-worker couldn't understand why I was "wasting money on rent". I eventually gave in to peer pressure and bought a new condo in a good location. Well 12 months later the housing market crashed and my condo dropped in value by 33%. I also now had "debt" which drove me nuts. A couple years ago I started dating a girl that lived in another state. Owning a condo that was worth 33% less than I paid for it was an anchor that made relocation difficult. My advice is to keep your options open and not buy until you get married. Just try to find a good deal on your new rental and not waste money on the best or nicest place in the neighborhood.

And yes, put your money in a Roth as your first option.

BogleMePls
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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Thu May 03, 2012 10:21 pm

So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?

Now, if the money were in a house, the house would appreciate as inflation increases? So the money is almost protected like Tbills and such?

Or is this ignorance speaking?

Thanks guys! Sounds like a resounding rent message. I have to say its tough to shake the "american dream" bs.

Would it also change things if I would turn the house into an investment property when its time to move out? I dont think I would sell it.

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market timer
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Re: Indecisive Newbie: Rent or Buy a home?

Post by market timer » Thu May 03, 2012 10:49 pm

BogleMePls wrote:So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?
You seem to be unsure about your asset allocation and using that as a reason to buy a home. If you want inflation protection, there are TIPS. Stocks are also frequently mentioned as an inflation hedge. If I were single and 30, I'd rent in a nice building in a good location with lots of single women.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Thu May 03, 2012 11:00 pm

market timer wrote:
BogleMePls wrote:So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?
If I were single and 30, I'd rent in a nice building in a good location with lots of single women.
+1 +1 +1. I would love to do that but rent in the places with the nice single ladies is 1200-1500. The rental options I've been looking at are close but not that close for $1000-1200.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by bottlecap » Thu May 03, 2012 11:23 pm

Here's the deal. I think you are far to eager to buy. You are going to at least triple your monthly housing expense when:

1. You haven't even taken the time to budget your expenses;

2. You still have a $400 per month car payment; and

3. You can only muster $500 per month pretax in a retirement vehicle.

These things are red flags to me. They aren't terrible in and of themselves, but they, especially the lack of a budget, suggest you are putting the cart before the horse. Everything in your posts suggest you are too eager and this is clouding your judgment. Why not keep the low rent for another year or two, budget, pay off the debt and increase retirement savings?

Am I wrong? Maybe. All I can do is try to give you an independent opinion. You've got to determine whether it hits the mark.

Good luck,

JT

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market timer
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Re: Indecisive Newbie: Rent or Buy a home?

Post by market timer » Thu May 03, 2012 11:38 pm

BogleMePls wrote:
market timer wrote:
BogleMePls wrote:So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?
If I were single and 30, I'd rent in a nice building in a good location with lots of single women.
+1 +1 +1. I would love to do that but rent in the places with the nice single ladies is 1200-1500. The rental options I've been looking at are close but not that close for $1000-1200.
Paying that extra $200-300/month for the next couple years will likely be one of the best investments you'll ever make. You can afford $1500/month easily on $80K/year income. Stop "living the hermit life."

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Re: Indecisive Newbie: Rent or Buy a home?

Post by pkh01l » Fri May 04, 2012 8:44 am

BogleMePls wrote:
market timer wrote:
BogleMePls wrote:So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?
If I were single and 30, I'd rent in a nice building in a good location with lots of single women.
+1 +1 +1. I would love to do that but rent in the places with the nice single ladies is 1200-1500. The rental options I've been looking at are close but not that close for $1000-1200.
There are many hidden costs to owning a home or condo. In another year, my original tax abatement I got on my new condo will be gone. This means property taxes will kick in at 100%. My property taxes, maintenance fees, routine upkeep and increased utilities compared to a rental, will by themselves be about $900 per month. This is what I will pay to live in a condo that is paid off with no mortgage. However the bigger reason for you to rent (IMO) is to stay flexible. At your age, you should want to keep options open to move across country for a better job, hot girl friend or a variety of other things that may come up. A mortage can seriously limit your options.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by Dandy » Fri May 04, 2012 9:41 am

the good news is that house prices should be near the bottom (?). the bad news is that owning a house is expense and time consuming. You need to keep things up to date or your house will lose relative value. I forget the exact % you should set aside for yearly maintenance but it is a surpirising amount of dollars. But probably the most underestimated thing is the amount of your time a house consumes. Sometimes you feel the house owns you. Mowing, raking, shoveling, seeding, fertilizing, mulching, pruning, painting, and since a house is usually larger than an apartment - more dusting, vacuuming, painting, furnishing etc. Being single puts all that work on you. Having a job means most of this work will be done on weekends so time off means spending time with the house.

I love owning a home I've owned one for 38 years. But if you are young and single you might not. Living in an apartment is expensive too. Large monthly charge but usually no surprises --but does free up your time. So, think about what life style you want to have for the next few years. If you like to go places on the weekends do you want to go to the beach with a date or the backyard with the lawnmower.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Fri May 04, 2012 10:15 am

One of the things I hate hate hate hate about renting is that you are at the mercy of the rental market. Back when I was renting in the public market (I've rented from a friend who owns for the past 3 yrs and my rent has not increased). Since I last rented, rents have gone up about 40%. I feel that signing a 1 yr lease, these rental companies will most definitely up your rent who knows how much. Its so frustrating.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by Harold » Fri May 04, 2012 10:28 am

BogleMePls wrote:One of the things I hate hate hate hate about renting is that you are at the mercy of the rental market.
As an owner you'll be at the mercy of the insurance market, the plumbing market, the HVAC market, the lawncare market, the tax policy lobbying market, etc. etc. You'll be able to put off and/or manage the magnitude of some of those expenses, but you'll still feel a bit helpless in the face of them.

Owning could be the better choice, but not necessarily for that reason.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by Valuethinker » Fri May 04, 2012 11:27 am

market timer wrote:
BogleMePls wrote:
market timer wrote:
BogleMePls wrote:So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?
If I were single and 30, I'd rent in a nice building in a good location with lots of single women.
+1 +1 +1. I would love to do that but rent in the places with the nice single ladies is 1200-1500. The rental options I've been looking at are close but not that close for $1000-1200.
Paying that extra $200-300/month for the next couple years will likely be one of the best investments you'll ever make. You can afford $1500/month easily on $80K/year income. Stop "living the hermit life."
+1

'nice single ladies'. And 30, male, straight, single.

Rent closer to same, and invest in better clothes. And I do mean invest.

Consider. You do so. You meet the woman of your dreams in the laundromat- -she's smart, sexy, she loves windsuring (or kayaking, or poker, or whatever). Most importantly she laughs at your jokes. You get talking, and head out for coffee. A few days later she invites you back to her place, and you kick off a wild and passionate relationship. In a couple of year's time, on a beach in California, you turn to her and say 'will you marry me?'

Go see the Gwynneth Paltrow movie 'Sliding Doors' for the possibilities of life.

Some things are priceless.

For other things there is Mastercard.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by Valuethinker » Fri May 04, 2012 11:31 am

BogleMePls wrote:So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?

Now, if the money were in a house, the house would appreciate as inflation increases? So the money is almost protected like Tbills and such?

Or is this ignorance speaking?

Thanks guys! Sounds like a resounding rent message. I have to say its tough to shake the "american dream" bs.

Would it also change things if I would turn the house into an investment property when its time to move out? I dont think I would sell it.
You spend 2-5% of the value of a home every year on repairs, property taxes, cleaning services etc. (repairs come in big lumps, not frequently, but when they come, they are big lumps).

If inflation skyrockets then you pivot, with your liquidity, and buy a home. There is little or no sign of that as yet.

I wouldn't make my home buying decision on an uncertain forecast of general inflation. Prices in Japan are still falling after nearly 22 years.

A home is a 5 years+ decision. You really need to be sure re where you will live, what you will do, for that time period.

Investment properties, btw, can be valuable but are mega-hassle. Travel that road with care.

I'd focus on renting somewhere cool in a neighbourhood with hot women. This is not just my years of marriage speaking-- these are some of the best years of your life, potentially.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by JupiterJones » Fri May 04, 2012 12:23 pm

BogleMePls wrote:Okay for the sake of the discussion, lets say I went the renting route. What do you guys suggest I do with the current savings?
I'd pay off that car in about two seconds.

It would drive me crazy to have $45,000 sitting in a savings account earning squat while also having an $8,000 debt hanging around my neck (and on a depreciating asset to boot!)

JJ
Stay on target...

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Fri May 04, 2012 11:29 pm

Valuethinker wrote:
Some things are priceless.

For other things there is Mastercard.


LOL! I didnt know I signed up for a comedy forum... I thought this place was investment!

BogleMePls
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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Fri May 04, 2012 11:31 pm

JupiterJones wrote:
BogleMePls wrote:Okay for the sake of the discussion, lets say I went the renting route. What do you guys suggest I do with the current savings?
I'd pay off that car in about two seconds.

It would drive me crazy to have $45,000 sitting in a savings account earning squat while also having an $8,000 debt hanging around my neck (and on a depreciating asset to boot!)

JJ
That was the plan... but I wasnt sure about the house buying thing. Once summer hits and I start seriously looking into houses (or renting)... If i go the rent route I'll definitely pay off the car and max out my 401k + Roth.

I know i know Im totally trying to sway to buying... but if I went that route... I'd definitely be investing in a roommate as well.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by stratton » Sun May 06, 2012 3:39 pm

If you can't make up your mind "rent."

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...and then Buffy staked Edward. The end.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by ClubberLang » Mon May 07, 2012 2:30 am

market timer wrote:
BogleMePls wrote:
market timer wrote:
BogleMePls wrote:So... can someone correct my thinking here if its flawed.

Liquid money seems to be the worst vehicle right now in an unstable economy. If the inflation skyrockets, money is worth much less right?
If I were single and 30, I'd rent in a nice building in a good location with lots of single women.
+1 +1 +1. I would love to do that but rent in the places with the nice single ladies is 1200-1500. The rental options I've been looking at are close but not that close for $1000-1200.
Paying that extra $200-300/month for the next couple years will likely be one of the best investments you'll ever make.
Or one of the worst. Half of marriages end in divorce.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Mon May 07, 2012 5:21 pm

So when do you guys think Owning is right? Seems like an overwhelming rent up in this thread!

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Re: Indecisive Newbie: Rent or Buy a home?

Post by Valuethinker » Tue May 08, 2012 11:30 am

BogleMePls wrote:So when do you guys think Owning is right? Seems like an overwhelming rent up in this thread!

When you have clarity on owning for 5 years: the commute you will have to make, the job, household size etc. (ie room if kids arrive as planned), neighbourhood.

Whilst houses in most US markets are now good value, history says they won't recover fast. And it's a huge financial commitment, loss of liquidity etc.

The benefits of owning a house, to people with kids, commitments etc. are clear. But before that?

Really you need to be thinking on a 5-10 year view. Remember a forest of people (real estate agents, sellers, family, pundits writing for newspapers depending on real estate ads, mortgage brokers etc.) want you to buy. But after you buy, it is no longer their problem, it is yours.

I would bet you can rent a nicer place (nearer those attractive young single women! Like where you might run into them in the coffee shop, and the laundromat, and in the line up in the drug store. The most important thing about young single women is that 1). you meet them 2). there are non threatening places to go for coffee thereafter-- the game of meet has well defined, if unwritten, rules and the more they see you around 'know you' the better the opening) for a couple of years, decide it's time to buy and still do so with few regrets.

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Thu May 10, 2012 10:42 pm

Valuethinker wrote:
BogleMePls wrote:So when do you guys think Owning is right? Seems like an overwhelming rent up in this thread!
When you have clarity on owning for 5 years: the commute you will have to make, the job, household size etc. (ie room if kids arrive as planned), neighbourhood.
I've been in this same city and renting for 12 years now. I've rented from my friend for 4 yrs now. I almost feel like the track record shows me sticking around

Whilst houses in most US markets are now good value, history says they won't recover fast. And it's a huge financial commitment, loss of liquidity etc.

The benefits of owning a house, to people with kids, commitments etc. are clear. But before that?
Aint that the truth? I struggle with breaking the idea of the American Dream... I can feel myself putting too much emphasis on the what if houses shoot back up... I know I know I know I shouldnt be...


Really you need to be thinking on a 5-10 year view. Remember a forest of people (real estate agents, sellers, family, pundits writing for newspapers depending on real estate ads, mortgage brokers etc.) want you to buy. But after you buy, it is no longer their problem, it is yours.

This is truth right here

I would bet you can rent a nicer place (nearer those attractive young single women! Like where you might run into them in the coffee shop, and the laundromat, and in the line up in the drug store. The most important thing about young single women is that 1). you meet them 2). there are non threatening places to go for coffee thereafter-- the game of meet has well defined, if unwritten, rules and the more they see you around 'know you' the better the opening) for a couple of years, decide it's time to buy and still do so with few regrets.

So convincing! Ahhh!

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Re: Indecisive Newbie: Rent or Buy a home?

Post by BogleMePls » Fri May 11, 2012 12:44 am


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Re: Indecisive Newbie: Rent or Buy a home?

Post by epilnk » Fri May 11, 2012 12:41 pm

BogleMePls wrote:So when do you guys think Owning is right? Seems like an overwhelming rent up in this thread!
The best time to buy a house is when you want and need a house and are in a position to buy it. Consider your reason for wanting a house independent of market conditions. If you were confident that housing prices were likely to go down in the short term, would you still buy? If the answer is yes, then go ahead and buy - it's time.

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