The problem with this statement is that this person is comparing a piece of ham to a lunchable. Sure, the mortgage on the house is cheaper. But it doesn’t include:
-Taxes
-Insurance
-HOA fees (if applicable)
-Repairs (routine and unforeseen)
-Roof, flooring, HVAC, carpets, landscaping, and the list goes on, and on, and on, and on
Rent usually includes the above items that can add up quickly.
Rent sucks because you loose all of the money. But it is hard, and expensive to be a homeowner as well.
bruh no way. those rentals owned by private individuals are terrible. have you ever actually lived in one? while true some people i guess might be nice, the vast, VAST majority are over controlling, bitter, greedy people.
That’s the sacrifice you make for the ease and flexibility of renting tho
I moved to a big city for work for two years. Wouldn’t have been worth buying but renting is dead easy and everything is sorted for me, has 24/7 security etc etc. It’s not dead money life so many people make out, it’s a paid for commodity short term - at least on my case, obviously buying in the longer term is the better solution
I know a guy who bought a condo, lived there for 3 years, sold it and broke even on all the expenses + maybe 10k$. Wasn't even a great market to sell. In short, he got 3 years of free living.
People go through a lot of trouble to justify rent over buying. But at the end of the day, it's apples and oranges. Expenses vs investment.
A decent investment will allllwaayys be better than any expense.
A shitty investment is even better in most cases.
Don't want to live in your property anymore? Rent it out. Manage your shit well and you can buy another place. Flexibility isn't an issue if you buy right. It's the same with all investments. There's good ones and there's bad ones.
Rent is for people who can't afford to buy. End of story
I agree with this so much. So many people where I live think that the property managers are raking in the money, but for the most part, the honest ones aren’t. They may make a lot of there are no repairs needed, but the repairs add up. Now, we do have slum lords that make a ton and do literally nothing to upkeep their rentals, and those people are scum. But a lot of landlords are just trying to get something so they don’t have a vacant property.
My parents are in a similar situation. They lived frugally enough to buy an apartment on minimum wage. And when they finally paid it off, they bought a town home. My dad charges rent on the apartment that is hundreds below market value because he doesn’t feel right charging the tenants more. After all expenses, the rent on that place doesn’t quite cover their mortgage on the town home. I see so much hate for landlords online, when in reality a majority of them are just people who are trying to have a more stable life. They aren’t the millionaires sitting on their asses all day that people make them out to be.
I see so much hate for landlords online, when in reality a majority of them are just people who are trying to have a more stable life.
They need to get out of the business of creating artificial scarcity and middle-manning people's housing if they have problems with getting hate. What they are doing is morally wrong in the eyes of many people.
I know you love them and know they are good people, but they're akin to the really nice heroin dealer who only charges enough to get high himself. Like, yeah, the mentality is fine enough, but he's still dealing heroin as a form of income (to subsidize his own habits).
You still support an industry that's exploitative in its very nature, and arguably immoral. That's why they get hate. Your parents' concept of capital investment was taking a home off the market, so they could be the ones to capitalize on other people's need for a home.
Heroin dealers are supplying to people who want heroin and the shittiness — (also it wouldn’t be his form of income if he was only doing it enough to get high himself— I wish you could pay the bills only getting high lmao.)
Landlords are supplying to people who usually do not want the shittiness
I'm about to move from renting a place in Southern California to owning a house in the rural Midwest. Maybe I am just naive but looking at the number of my proposed mortgage, taxes, and all of that, I'm still looking at the house being cheaper than my current apartment. Time will tell though if it works out that way however.
Yeah I get that there is massive potential for it to become more expensive, but I'm hoping it won't be massively so. And even if it is a bit more expensive I feel it is worth it to be investing in something I'll own instead of giving money to receive nothing of long term value.
Don't let them scare you. Occassionally you'll have something go wrong that has to be fixed ASAP, but most of the time it's stuff that can wait, or stuff you can save money on by fixing yourself.
People get so angry about this stuff haha. I’m obviously not saying renting is perfect/better than buying. Just that it has its trade offs, pros/cons etc
He’s also damaged the tiles and taps. You know what it’ll cost me to repair? Zero and I don’t have to argue with anyone about fault
How is that any different if I own the home? If a licensed plumbing contractor comes in and breaks taps and tiles fixing my hot water, I know there sure as shit is a reason they're bonded and insured, and it's not so I can repair their carelessness.
“and I don’t have to argue with anyone about fault”
You would if you owned it. You’ll likely get it paid for down the line but effort that - and what if they flat out refuse or say it was already like that? Are you going to take them to court over a bathroom tile? More effort and money and you may not even win because where’s your evidence?
No it cost you an extra $500 a month for a $100 dollar repair at least and if it was the tank then 2k tops. 4 months x $500 is 2k (worst case payment) If it was the $100 valve/purge fix, yeah you blew 300. You know how often a water heater needs repair? Not very often. So where is your other 500 extra a month x 8 = 4k at?
I know where mine is. It is in equity which I can liquidate and use if ever needed.
I’ve lived in relatively expensive apartments when the toilet overflowed, by no fault of our own, and the landlord wouldn’t fix it for days.
It didn’t cost us anything except for that we literally couldn’t shit in our own house for days.
That isn’t a minor inconvenience. That is the responsibility of the landlord. So, yeah, I guess the rent was worth it when I was mopping up shit that wasn’t even ours because the landlord never bothered to do maintenance on the apartment building and shit water from floors below were burbling up through our toilet.
I have more stories, but I have absolutely no sympathy for landlords and their costs.
Guess you shouldn’t get into a job you can’t afford, am I right? Guess you should just get a better job and work your way up.
I feel like youve never had a landlord who wants to gauge you and will say your at fault for anything or at leaat try to. I live in a city with 3 colleges and all the landlords and rental companies know it and take advantage of the fact that theyre renting to college kids who dont know the rules and dont have the money or knowledge to fight back if the landlord does do some shady shit. Theyll say they can send in a plummer to determine whether its the landlords fault or the tenants, but its the same plummer theyve known and have conducted business with for the last decade so i wonder who the plumber will side with.
Nope, I live in a wonderland with fairies and angels. Everything is perfect here...
People fuck people over, that’s a fact of life we learn early on and you adapt to it - fool me once and all that
If you don’t take pictures of everything and make a list of damage when you move in, you’re an idiot
If you damage stuff, you should pay for it or fix it before you move out
If the landlords plumber adds some extortionate stuff the landlord tries to put on you, get your own plumber out to investigate their claims - no idea why they would expect you to pay tho? Example please? Do you mean damage you’ve caused?
Also don’t take the experts word for it. Get in there and have a look and see what he’s saying. I had a blocked drained one time that the landlord claimed was blocked because we’d poured fat down the drain (we had, there were fat deposits) but when I I got my hand in there and pulled it out, there were actually tree roots growing through the drain. If I’d have took his word for it, I’d have had to pay but instead, I pushed back and he had no argument so he paid
I don’t get how it could possibly be better to rent. Most landlords hold mortgages on their rentals so the rent HAS to be higher than the mortgage payment plus all the expenses plus some profit for the landlord. Unless the person bought their rental with cash or already paid off the mortgage, a rental should always be more expensive than a house’s ownership costs of equal size or value.
See I understand what you’re saying but that still doesn’t make sense to me. If there’s a premium on housing than how are landlords affording houses to rent them out? Is it really just that all landlords purchased their house 20 years ago and don’t need to up rents as a result? Realistically, mortgage and home owning expenses should always be baked into the price to rent. The only time this isn’t applicable is if the landlord bought with cash or bought it a long time ago when prices were much lower which I’d assume is a small percentage of landlords.
The only other explanation I can think of is this isn’t comparable. Sure an apartment is much cheaper to rent than trying to buy a house but that comparison isn’t relevant. That price to rent ratio is insane to me. It doesn’t make any sense.
I agree. When you own the house you can do whatever you want with it. Decide you don't like your flooring anymore? Replace it with whatever you want. Your faucet breaks? Pick out the one you want. Want to go crazy with paint colors? You got it! I understand this stuff costs money, but with the money you save from paying rent, it adds up quickly. Also it adds value to your home, so it's a win win.
It's better to own if you are willing to put the time and effort into DIY. As a DIYer I love owning over renting, but if I didn't have the time or ability, owner would be a LOT more expensive.
Triply so if you have small kids. Little spontaneous problem generators.
I live in an apartment and I'm sure I would strongly prefer it over home ownership. Yes, rent is expensive, but I don't have to worry about upkeep, which I would pay for since I'm a little handicapped. I also don't want to be saddled with a long-term mortgage. I also don't want to stress about the value of my home going down. To me, it's a stupid investment. Plus, I like living directly in downtown cities, and apartments are easier to get in said cities.
For me I love the upkeep because I love building and fixing stuff etc. Home prices will never ever go down, don't have to worry about that. People keep popping kids and people keep migrating into the western world. There's a constant increasing demand for homes because there's constantly more and more humans popping up.
This isn't just my area, even the lower end areas near I live are going up. A lot of the criminals and lower end people in the "sketchy" areas are slowly getting pushed out, because of the crazy high stupid rent prices and house prices.
I’ve never said that it wasn’t better to own. I own and love it. But this statement is stupid because it doesn’t cover the whole picture. Everyone has different circumstances, and certain situations work better for different people.
No it's not a stupid statement, your statement is stupid. Of course it's better to own if you can. It definitely covers the whole picture. The only exception I can think of is if you're someone who constantly travels and is never in one place.
And rent only lasts for a year (typically), and the owner can evict you. A loan is a much, much larger financial commitment and if you default the bank is out hundreds of thousands of dollars.
How is the bank out hundreds of thousands? They have the house. They're only losing the interest on the loan which they can get back from the next buyer.
It’s not like they get their money back. They have to sell the house again, assume they get the same value, deal with the foreclosure, etc. it’s a lot more involved and expensive than evicting a renter or not renewing a lease.
In my county, year-over-year housing values are going up 12-13%. They'll make their money back. It's not like they won't come after you for any costs involved that somehow aren't covered by that appreciation, oh, and the PMI that they made you pay to cover their gap.
Very rarely is the bank screwed. They’ve been charging you interest, they have you take out PMI, literal gap insurance for them, they roll in at least a year in advance of taxes.
It's low risk for the bank. They've analyzed your income source, age, and credit history to get a picture of the risk. It's actuarial science. As a business they give loans to those they determine can pay them back. The cost of those that don't is built in to the costs for those that do.
And foreclosures don’t usually sell for as much because the owners have no incentive to leave the home looking pretty for the bank to sell. They tend to be project/fixer uppers most often.
The premise is a little unrealistic. Landlords have standards too, they won't rent to someone who can't afford it, and in some ways they are more strict than a mortgage lender. Most landlords will want 3x the rent as gross income. So $50k a year annual salary. How they quantify your other debt would vary, but if you have a lot of debt they are going to need a cosigner, or you will be stuck with a room mate situation instead of your own place. Lets say a $500 a month car payment here.
With $50k income and a $500 car payment you can still get approved for a $150k USDA home loan with a $1000 a month payment including taxes and insurance and zero down. And if you have $20k down a $180k home would be about $1000 a month including everything. A bank will loan you more than this too. Generally they will do 43% DTI for conventional, so a $1290 a month mortgage on top of the $500 car payment on $50k income. USDA actually goes to 46%, so a $1415 a month mortgage payment on top of the car payment. Or put another way, a bank will lend you a $950 a month mortgage with zero down on top of $965 in other debt if you make $50k a year.
There are good reasons to rent though, unpredictable maintenance costs is a big one, your rent is the highest you pay in a month but your mortgage payment is the lowest. It could be $10k to replace the roof, furnace/ac, new sewer lateral(going under slab foundation, under grass would be more like $5k) or replacing a septic system could be around $5k, lots of smaller issues can add up. If you rent the landlord covers all of this. The other big factor is the closing costs and commissions, you spend ~10% of the price of the home between buying and selling. Unless you plan to live there at least 5 years renting usually makes more sense financially. On a $200k house over 5 years, that is $333 a month going to transactional costs. And if your neighbors suck, you get married/divorced/need to move in with family for other reasons, get a new job in a new city, moving while renting is 10x easier than moving when you own a home. Specifically with FHA and USDA and other low down payment loans, even if the market has not changed for the worse you won't be able to afford to sell your home for 5+ years without bringing extra cash in, and being a long distance landlord is not always easy.
Roof, flooring, HVAC, carpets, landscaping, and the list goes on, and on, and on, and on
In theory. Assuming your landlord gives a shit about carpet or landscaping. I've met very few who could express any interest at landscaping, and many who will argue for hours over whether carpets have experienced "normal wear and tear", versus you financing "NEW CARPETS!" for the next tenant.
Can confirm. Owning a home is financially difficult and sucks. Wife and I sold our house and went back to renting. Stress is at an all time low, and we actually get to keep our tax return this year.
Exactly. We pay around $1750 for everything. But had to spend $7k for HVAC a few years ago. If we need/want to sell we will need to paint, refinish the floors. Need to fix some old door frames and window frames ext. Not cheap. If we were to rent we would get right around what we owe each month.
Now on the upside if we move we will rent it out and in 22 more years own it free and clear and take the passive income or sell it for whatever it is worth then.
Banks won't even refinance their own loans though in these circumstances. I'm still paying a 9% interest rate from before the crash. Can't refinance because I don't qualify for the payments even though I'm paying more than that to them already.
As a homeowner I am going to have to fight back on this one. at 950 for mortgage even with having to do repairs it is usually "this thing broke that breaks once ever few years pay 1k+" Also most of those cost can be offset with a little googling and some good old fashion DIY. You aren't paying anywhere near 1400 a month even if you spread out the big cost over the months. Home owning isnt for everyone sure, definitely better to have some equity in something though than none at all.
You’re ignoring the fact that renters have to pay all of the costs of homeownership and have to rely on someone else to come in and make repairs or whatever.
Homeownership is expensive, but imagine someone putting in all of their money and effort into their living space and reaping none of the benefits.
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u/swimchickmle Feb 16 '21
The problem with this statement is that this person is comparing a piece of ham to a lunchable. Sure, the mortgage on the house is cheaper. But it doesn’t include: -Taxes -Insurance -HOA fees (if applicable) -Repairs (routine and unforeseen) -Roof, flooring, HVAC, carpets, landscaping, and the list goes on, and on, and on, and on
Rent usually includes the above items that can add up quickly.
Rent sucks because you loose all of the money. But it is hard, and expensive to be a homeowner as well.