Renting vs. Buying
By sylvrrain
@sylvrrain (659)
United States
January 19, 2007 11:04am CST
I am renting a home for the first time in over 20 years. I sold my home in June, and moved about 100 miles away. My husband and I decided to rent until we found a nice piece of property so we can build our dream house.
We have a great landlord. He knows we are looking into something that we can own, so we didn't have to sign a long-term lease. Our lease is month to month. Any improvements or repairs we make to the rental comes off our rent. I think it is an awesome deal and our landlord is a really great guy.
My question is, besides building equity, what do you feel are the advantages of building or buying? I do know that some landlords are real pains, and some do not take care of their properties, but that is not an issue here.
I told my husband, with the amount of money we are saving, I think I may want to rent even longer, save that money toward our retirement. What do you think?
8 people like this
62 responses
@kawillow74 (1416)
• United States
20 Jan 07
If you are getting a good deal and can save more money for your home i would say rent a little longer. With taxes and everything else it can go both way we did rent at first I also had a great landlord my grandfather but when you have your own home it is your's and you can do want you want to it. But it sound like you are happy where you are I would say stay and save. Good luck.
@sanjaypatel250174 (250)
• India
19 Jan 07
If the installment for a home loan works out as much as the rent,then you should buy a house or else continue to stay on rent.
1 person likes this
@sylvrrain (659)
• United States
20 Jan 07
Yes, I agree. My rent is less than half of what the mortgage was on the house we sold. That is why this is such a hard decision for me. The rent is much cheaper, and I do not have to pay for maintenance.
@olaff123 (433)
• Namibia
20 Jan 07
At the moment I am renting too, because I can afford a much better house as the rent is lower than the mortgage bond would be on a similar property. I however invested in several other properties on which I earn monthly rental, as the capital growth is very good.
@Trace86 (5030)
• United States
19 Jan 07
If renting a bit longer helps you save money. Why not use it towards the property and new house construction rather than retirement? Or maybe you can split what you save: half to retirement fund and half to a savings designated for the house construction. You should probably only rent until your house is done, then all your earnings can go towards retirement and entertainment.
I know you said the landlord was great, but is the deal with repairs and improvements in writing? Always get everything in writing.
@sylvrrain (659)
• United States
20 Jan 07
The deal with the repairs is not in writing. When we pay the rent, we give him the receipt and the difference in the rent. It has worked out so far. He owns about 20 rental houses, and the more we do, the less he has to do. I think it helps him out when we fix something. We have done quite a few improvements to this house, and he has never once said anything about it. He told us that we could do anything we wanted to make ourselves comfortable. I almost think, because of some of his past tenants, he is just happy to have someone who actually pays the rent.
@friend2friends (1636)
• United States
20 Jan 07
Here is something to consider. I read about you stating building the dream home. Have you entertained the thought of buying a tri-plex apartment unit. Then you could pretty much live rent free with the other two units rented. Another option to consider. Landlords such as yours, you could just lease month the month with the option to buy & resell and play the real estate game. You could do a lot traveling every six months. Buy a house on contract, live there for 3 months and put the house up for sell and when it sells move to another town. You could really have a long term vacation till you decide when and where you want that dream home.
1 person likes this
@sylvrrain (659)
• United States
24 Jan 07
No, I have not even considered buying an apartment. We have entirely too much furniture and I do need my privacy.
We do have a month-to-month lease at this time. Our landlord knows we are searching for property to build on, and he is even helping us look.
I am not interested in the "real estate" game. The taxes would kill us, having to pay tax on the gain and the thought of moving all of our stuff more than twice would make me want to scream. LOL, no, I will move one more time, and that is it for me.
@nw1911guy (1131)
• United States
20 Jan 07
Why don't you buy a small house to live in for now (buy it with financing), then when you get your house built, you can rent out the temporary house and have that equity for your retirement?
1 person likes this
@sylvrrain (659)
• United States
20 Jan 07
We did think of that, actually, and are still considering it. We are just a few miles off the Chesapeake Bay, and it is really difficult to find a small home that is not overpriced. Since reading some of the responses I have gotten from this post, I think I will ask my landlord if he would consider selling this house to us. It is in an excellent location and the property is nice. The rental is a 4 bedroom 2 bath ranch, too big for what I want, but it does have its bonuses, like not having to move until my dream house is built.
@keira15 (2)
• United States
19 Jan 07
It sounds like you are in a good situation, however, you want to be sure that you agreement of renting month to month is secure. You also want to make sure that there is some type of understanding that your rent won't also go up. In considering your retirement what kind of savings do you guys have? Do you have a 401K/403B or any annuties. Those are the type of things you want to consider when renting and buying and considering your retirement as well. One more thing, when buying a house/building there are a lot of hidden costs- which I'm sure that you know about seeing that you are a previous land ownder.
1 person likes this
@sylvrrain (659)
• United States
20 Jan 07
I am sure the month to month rental agreement is secure. Also, when I asked the landlord about rental increases, he told me that the last time he increased the rent was when the county raised real estate taxes. That just tells me that the property is paid for.
We do have investments, and savings. We put the money from the sale of our home into CD's, for now, until we find some property that I am happy with. I do not plan on financing the property, but I may have to get a loan for the construction depending on the materials I choose and how much I save until I find that elusive property. My son builds huge million dollar homes, and he told me he would build my home for me. I have designed it and it will be less than 1800 sq.ft., as I only want two bedrooms.
@aevinodkumaar (49)
• India
20 Jan 07
Yeah.. You need to save a lot before you retire... Thats when you can live peacefully after retirement... May be you can think of buying a house after you ppl retire..
1 person likes this
@helloitsmera (48)
• India
20 Jan 07
hi people metalities will be change over period of time. probably today the landlord is co-operative. but 2morow the relationship may get worse. its better to hae a own home. My suggestion is to have a home.
1 person likes this
@vsvsaravanan (65)
• India
20 Jan 07
I was ina rented house with my parents. We have to pay the rently and it in not in lease basis. Better we can rent the house instead of buying because we are free from maintenance, not in the sense that we dont want to maintain the rented house. If we have the own house then we have to be there always in the home if we have some festivals and we cannot avoid the relatives or friends who are coming to our home.
so Its better to be in a rented house instead of having a on house
1 person likes this
@dm74728 (159)
• United States
23 Jan 07
Since you are so happy where you are and how the situation is, my opinion is to keep saving for your own home. By the time you get it all saved up you may have changed your mind anyway and want to do like you said and keep the money for retirement. You will know what to do when the choice has to be made. Life is like that.
@sonamanish (115)
• India
20 Jan 07
I think renting would be the better option because according to Robert Kiosaki in his book "Rich Dad Poor Dad":
1. The amount invested in house is blocked and can not be used to invest and earn money.
2. The value of house increases slowly as compared to liquid assets such as shares, mutual funds, bonds, etc.
3. Own house requires a large sum of money which could be arranged by loans.
Thus, own house would not be a profitable one.
But if you arrange your assets in such a way that you get enough inflow of money each month, after savings and investment, then you can have one.
1 person likes this
@koikoikoi (1246)
• United States
20 Jan 07
Well since your asking me I would truly say that you screwed up already. You should have stayed in your already owned house and then from there start looking for your piece of property to build your dream house on. Because now your wasting money you saved for your house, on rent. Sounds like you and your husband didn't quite think this through. And besides why don't you build your dream house and live the life that you dreamed of. Build the house of your dream, that's what you saved the money for right?
@sylvrrain (659)
• United States
20 Jan 07
I really don't feel like I screwed up. We took the money from the sale of the house and put that into CD's, and the rent is less than half of what our mortgage was. So we are saving a considerable amount of money every month compared to what we were paying, not just in the mortgage, but in the utilities, real estate taxes, and homeowners insurance as well. It was nearly impossible for us to find the property living so far away. I am rather picky. If you read my post completely, you would have noticed that we moved 100 miles away, and I am building my dream house. I guess what I didn't say was that I have the plans and the builder already. Just not the property. I want to be close by while they are building my home.
Besides that, we sold our home before the housing market went nuts, so we did sell for a premium price, and had a buyer within two weeks. I am sure if we would have waited, say until now, we would not have gotten as much as we did as quick as we did.
@santwana_veddika (2018)
• India
24 Jan 07
actually i feel that if i stay
1) in rent for 20 year we donot get anything . it is totally a wasteage of money .
if u have some saving with u than along with bank loan u can purchase ur home .
2) we cann't made a changes according us .
3) if owner say to leave their home than we have to leave and again go to another place .
i mean to say that house is also one type of property, today it is cheap but after 10-15 years it price will be high .
in my opinion to purchase house is only better idea .
thanks
@kabella50 (309)
• United States
19 Jan 07
I use to own a couple of homes and all my life the home was the american dream.Well all my home did was give my kids good memories and take all my money just to maintain.I know owning a home is financially better ,but since I left New York and came to Florida and live in a 2bedroom apartment with 2 baths and I pay 750.00 I have never looked back.When my toilets stop up,a phone call is all it takes to remedy that.When my a/c breaks down all I have to do is make that call,it's done and it doesn't cost me a cent.I also enjoy living around people whether I want to socialize or not,I feel safer here than living in a house.I really enjoy renting and I don't think I am gonna buy anymore,I can't take anything I buy with me and my kids have their own,so I am really happy renting.
@ShayMorris (163)
• United States
19 Jan 07
We are currently renting, and looking for a house to buy for ourselves. Its hard finding great people to rent from, especially that let you make improvements to the property and take it off your rental fees. We are lucky and rent from my grandmother, so we've got it cheap right now, which is making is easy to get nicer things for when we do move, or to build up a larger amount as a down payment.
We chose not to build, because he's military, and it wouldnt be worth it to build a dream home that you dont get to stay in, maybe when he retires its something we can look in to then!
@egc65791 (82)
• United States
19 Jan 07
well you can rent and save money to ur morgage but if you buy you would be building equity and you would be able to leave something behind for anyone you have when you end up going to heaven. the problem with renting is that you are getting a house to stay in but your money is not going to a place that could give off a return. when buying a house or buildin one you can earn back what you put into it later on in life. say down the road you end up wanting to move to another location well all the money that you have put into rent is gone no getting back but if you buy or build a house or property you will end up being able to make money back and most times you get back at least 20% profit on most properties after 5 years sometime in less time. I do understand that it is a hard disition to decide weather to buy or rent but in my opinion I would go with buying cause there is more to gain in the long run then you will by saving a lil now. But this also will be based on your income now if right now you could use the money greatly and do not have the money to spare to build or buy then i would stick with renting until something changes cause saving a lil bit of money is better then making a contract without the money to pay for it. That could really hurt your credit and get you in debt sometimes. If you do have the money and your not finacially locked then i would deffinatly build or buy. sorry to be so long but as a missouri broker i have a lil knowledge bout real estate. =)
1 person likes this
