Housing - Do you rent or own?

[j.dstasio]

We are renting. The house is in foreclosure, so the rent is seriously reduced. We pay $1000/ mo including water/ sewer. It's a 4 bedroom house on a lake. The houses in the area are valued between $600k-$1.3m. We originally signed a six month lease, but have been there three years now.

It's wasn't really planned, but it was a great opportunity that allowed us to save a lot on rent and we have been able to contribute a lot to savings in order to buy our own home.

 

[Huntn]

When I bought my house in 1999. I put $50,000 down on a house that cost $196,000. My mortgage rate was 7.25%. My monthly payment $1750. When my father died in 2001, he left my sister and I a sizable inheritance in which I was able to pay off my mortgage even though my accountant told me it wasn't a good idea for tax reasons. Glad I didn't listen to him. Just not having the stress of making large payments each month was worth it.

Here's the thing, a mortgage in the U.S. equals a tax deduction. However, you'd still come out ahead (more money in pocket) by paying the tax if you're not making a mortgage payment. If I'm wrong about this, maybe someone could explain it to me.

Today in the U.S. I think with the way the housing market has been, the purchase decision is much tougher. If you plan to buy an hold for a decade, that should not be bad, but if you are in a job that requires frequent relocations, I'd think long and hard about it. You may have a house that can't be sold without loosing money.

As for myself, I own my home, mortgage paid off, but have a home equity loan (and get the tax deduction ). I live in Houston and pay about $4500 a year in property taxes.

 

[firedept]

Own. Bought my first home when I was 18. Yeah I know, but I decided it was more important than booze & women. Now 53 and have completely paid off my mortgage 3 years ago. Home valued at $600,000. Am currently tucking all my money away for retirement in 7 years. My father always taught us that a home was the most important decision you will make in your life. Today I do not regret making the decisions I did when I was younger. I now have a great family and no money stress. My darling wife can stay at home, raise the children and take care of the home as she always wanted to do.

 

[Happybunny]

I hope my question didn't offend you?!
That wasn't my intention at all. But thank you very much, Happybunny. Must be quite an interesting building and story.

No offense taken.

The house is more than a collection bricks and stones, it's my families history for the last 200 old years.

I forgot to mention that as my house is a "monumental building" the outside must remain historical, I do get tax relief on the up keep of the exterior.

 

[Tomorrow]

We were renting a 2 bed/2 bath apartment in an upscale neighborhood in a Dallas suburb, paying $965 a month. After a year the rent went up to $1020.

Then after hurricane Katrina, the complex was required to take in refugees from Louisiana, since the government was paying most or all of their rent. The quality of the neighborhood went completely to hell; people parking in your assigned spot, throwing parties outside at all hours, leaving trash everywhere, etc. And since the government was footing the bill for so much of it, our rent was set to go up to $1385 a month.

So we bought a 4 bed/2 1/2 bath two-story house. Our mortgage (with taxes and insurance) is right around $1400 a month. And no Katrina riff-raff.


* yes, I know not everybody who evacuated would be considered riff-raff - but there were enough of them that the neighborhood went to hell. Those are the people I'm talking about.

 

[twietee]

No offense taken.

The house is more than a collection bricks and stones, it's my families history for the last 200 old years.

I forgot to mention that as my house is a "monumental building" the outside must remain historical, I do get tax relief on the up keep of the exterior.

I remember you posting a pic of a red and fast (and old) vehicle in front of what I would call a castle...is that your mansion? You have your own crest then?

 

[Happybunny]

I remember you posting a pic of a red and fast (and old) vehicle in front of what I would call a castle...is that your mansion? You have your own crest then?

No sadly I've not got a castle.

That was the Castle De Haar, in Haarzuilens Utrecht.

It was the home of the family van Zuijlen van Nijevelt. Till 2002, it's now open to the public.

The photo of the car was taken by a professional, at a concours d'elegance in 2010.

 

[snberk103]

Own. I had a small windfall and paid for the smallest cheapest house I could find in Windsor, Ontario, in 1985. Moved to Vancouver in 1986 before the real-estate boom, and rode that wave to the top.

Now we own a home that we had built 3 years ago on 10 acres in a rural community in the Salish Sea. We worked hard, and lived carefully (but not frugally) to make as many extra payments on the mortgage as possible. Now we are also mortgage free.

 

[nilk]

I own and currently owe $140k on my house that I bought for $220k almost 3 years ago (and also got $8k tax credit). This is in Florida. I was worried for a bit when the value went south, but the value appears to have gone up past what I paid (if Zillow's estimate is to be worth anything) and that's not factoring in the numerous upgrades we've done to the house. I am in the process of refinancing to get a better rate.

Owning has it's serious pros and cons. So much maintenance and things going wrong, it's so costly I don't know if it's worth it. When something breaks and needs replacement you have to make the decision of whether to do it cheaply and just get something functional or spend the money to do it right. Like last year when we had a leak in the shower and we ended up doing it exactly how we wanted it and ended up spending $5k. It's hard not to spend the money to do things right, and in theory it adds to the value of the house, but in the short term it restricts available funds. I've experienced what it's like to be "house poor" quite a few times.

I have a pool, and I think it's complete waste of money, and it needs major work, and it's not even heated, so we need to add a heating solution to make it more useful. There is a heated pool at the community center down the street that we use much more often. But my wife wanted a pool, and once my son is old enough he'll use it.

We plan on selling some time in the next 10 years, either to move to another city or to upgrade (it's only 3 bedrooms).

The nice thing about owning your house is you can do things like install ethernet cable throughout the house. I have Airport Expresses all over the house connected to the wired network and acting as Wifi access points and also using for AirPlay. So I always have a solid wifi connection. The previous owner had installed speakers throughout the house and outside as well. With iTunes Remote + Airport Expresses I absolutely love the music setup I have in this house.

 

[twietee]

No sadly I've not got a castle.

Sorry to hear that, pal!

 

[r i c h]

I rent a small (1,200 square foot) 2 bedroom house in Orange County, Ca for $1875/month. It's a new build with nice amenities and although the rent might seem high to many parts of the US (and abroad) it is actually a pretty good deal for the area.

I almost bought a house in the same area about 2 years ago but decided to wait a few more years before purchasing anything. I could really use the tax benefits of homeownership but with the high probability of no longer living in this area in the near future I've decided keep playing the renting game.

 

[Micky Do]

Rent..... for me as an "alien" where I have been living for the past ten years (Thailand) buying is strictly speaking not allowed. Some foreigners do find various dodges to buy, but it is all a bit risky.

Rent sets me back about 12.5% of the pittance I earn (for a 7 x 5 metre apartment), and has not gone up in a decade....

Having lived a fairly itinerant life (to stay employed, and stuck with mostly low paying jobs) until I landed up here, buying a house has not really been an option. Better to be debt free, and have a small amount of savings to tide me over between jobs than to own a house that I may seldom actually live in, and have the worry about meeting the mortgage in lean times.

 

[Peterkro]

I've just moved to a one bedroom flat in a well known building on the Thames in London it's a co-operative which holds a lease on the building so the flats will never be sold to the tenants or anyone else.I pay under £120 a week for a property that if it were to be sold on the open market would be valued at over £1million,this for a one bed flat,housing prices in London are astronomical.

 

[ericrwalker]

Still have to pay $8000 a year in property tax

Got to love NY, I pay almost $6000 in property/school taxes, and my house is in an okay urban area in Albany county. Got them to lower the property taxes, but school taxes are still about $3500, and the house is accessed at about half of what I could sell the house for.

 

[Mr. McMac]

Got to love NY, I pay almost $6000 in property/school taxes, and my house is in an okay urban area in Albany county. Got them to lower the property taxes, but school taxes are still about $3500, and the house is accessed at about half of what I could sell the house for.

$5300 of the $8000 is school taxes and I don't have kids. It's a bunch of BS that homeowners pay and renters dont, and yet they get to vote on the school budget. Totally unfair

 

[ucfgrad93]

$5300 of the $8000 is school taxes and I don't have kids. It's a bunch of BS that homeowners pay and renters dont, and yet they get to vote on the school budget. Totally unfair

Don't kid yourself, the taxes are figured into the rent payments.

 

[snberk103]

$5300 of the $8000 is school taxes and I don't have kids. It's a bunch of BS that homeowners pay and renters dont, and yet they get to vote on the school budget. Totally unfair

Don't kid yourself, the taxes are figured into the rent payments.

And, at least in Metro Vancouver, commercial property taxes pay more in taxes (per $) than residential. An apartment building would be assessed as a commercial property, so renters are paying more in school taxes than home-owners.

Why homeowners think they pay so much more in taxes is because a single family dwelling (or duplex) is very 'inefficient'. A homeowner is paying taxes on the value of un-developed land... the front, side, and back yards - and the driveway. Plus, often, the value of the air above the home and the value of putting parking underground. In essence a home owner is paying taxes to not have someone living above and below, and sharing a common wall.

A condominium tower is kind of a hybrid. Owners get the benefit of paying property taxes at the lower residential rates, and they get the benefit of the efficiency of density. They aren't paying taxes on a lot of empty land. I believe Vancouver, BC has the highest proportion of condos in North America. It works well, as long as you don't mind people living above and below you. Condos for that reason can also then be very affordable.... relative to the market.

 

[hallux]

Got to love NY, I pay almost $6000 in property/school taxes, and my house is in an okay urban area in Albany county. Got them to lower the property taxes, but school taxes are still about $3500, and the house is accessed at about half of what I could sell the house for.

Exactly why I still rent. I'm in your area, currently renting in Saratoga County, taxes in Schenectady county are too high and home values are too high for me in Saratoga county. I have it good where I am, and for a single guy it really doesn't pay for me to take on everything that goes with home ownership. I like being able to make a phone call and have the fridge fixed or the washing machine replaced, the same day.

 

[ChristianVirtual]

For me buying in Tokyo don't seems a good idea. Expensive and solid risk to loose it during earthquake. So buying after retirement and relocation to different area; rent until then.
Back in Germany we owned the apartment but sold it with no real profit/lost (more a lost with the transactional costs considered )

 

[ericrwalker]

Exactly why I still rent. I'm in your area, currently renting in Saratoga County, taxes in Schenectady county are too high and home values are too high for me in Saratoga county. I have it good where I am, and for a single guy it really doesn't pay for me to take on everything that goes with home ownership. I like being able to make a phone call and have the fridge fixed or the washing machine replaced, the same day.

Funny thing is that taxes in Saratoga county are much lower than Albany county, and I think they are too high. I love the northeast, but I am getting tired to NY. I will probably be looking to move to NH in the future. Taxes are reasonable, if I can find a decent job I am gone.

 

[LumbermanSVO]

I recently decided not to do either, I'm officially homeless!

I live in my work truck, a 2012 Freightliner Cascadia, and stuff the money not spent on housing into my saving account. I just started this in November and so far it's going great.

I LOVE the look on people's faces when I tell them I'm homeless, with a big smile on my face!

 

[hallux]

Funny thing is that taxes in Saratoga county are much lower than Albany county, and I think they are too high. I love the northeast, but I am getting tired to NY. I will probably be looking to move to NH in the future. Taxes are reasonable, if I can find a decent job I am gone.

I never said they were low, just lower than elsewhere in the area. As I noted though, where I am now is perfect for me cost-wise so I'm in no hurry to find a house to buy. I just wish gas prices aligned with the national average instead of being 10-15 cents higher. Unfortunately, I don't have the education needed to get a stable, permanent job at Global Foundries as it's right around the corner from me.

 

[Mord]

Own, It's cheaper than renting was for us where we are for a nicer house.

Hoping we can pay it all off within 15 years or so.

 

[skunk]

Incidentally, doesn't the crown own all land in the UK, and everyone is technically leasing it?

No. The Crown retains mineral rights, but freehold is freehold.

 

[AhmedFaisal]

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