Is there anything "wrong" with renting?

[Imzadi]

Is there anything wrong with renting?

If there is something "wrong" with renting, then there is something "wrong" with about the 7 million out of the 8 million of us who reside in NYC and rent.

You know what the best part about being an adult is? You don't have to answer to anyone. I love it. Unless someone wants to chip in on my mortgage and be my handyman I don't give a hoot what he/she says about us renting. We've rented all over the country for the last 14 years and now facing 40 in the face. I have no regrets and sort of have a sick feeling even buying a house and may put it off just a bit longer.

OP, if you are happy and content with your renting don't worry about anything else.

As always, Tina said it much nicer and more diplomatically than I could.

OP, your in your 30's now? Unless one of those family members is helping you with your finances for housing, or is a financial expert, make your own financial decisions. They need to mind their own business, instead of using you to affirm their own decisions.

 

[MrsDuck]

If you aren't ready to put roots down, don't buy.

 

[goofyernmost]

The only issue I have with renting is when people get old, I wouldn't like to be elderly and having to move when landlords want me out.

Except for about 6 months when I first go married, I have always owned my home. If you're lucky and the market jumps up when you are ready to sell then equity is a nice thing to have. However, equity isn't guaranteed to be anymore then what you put in it to begin with, but, it is nice to have that cash back. The last thing I bought after my divorce 15 years ago, I lived in for 10 years and was able, due to a downturn in the economy only able to get back what I paid for it. That was nice, however, in the overall picture, I had spent thousands of dollars in upgrades, repairs and taxes. It was still nice to have my purchase price back. Now that I am older and retired I decided that I didn't want to have to worry about maintenance, upkeep and taxes, so I rent now. It was hard to do, but, then my central AC went out, replaced at no charge to me, my refrigerator bit the big one, replaced at no charge, hot water heater started leaking, replaced costing me zilch.

I am no longer building equity, but, what good is equity going to do me at my age. I'll never live long enough to actually see it. My children will inherit it, and that would be good, for them. Amount to nothing for me.

The moral of the story is if you have the income to deal with emergency appliance and major replacements and repair then it is a good thing to build equity and purchasing is probably a wise move. When you get older... it isn't a financial winner like it would be if you were older.

 

[barkley]

Homeowners insurance is only $100 a year more over the cost of renters insurance

boy howdy-that's never been our experience. when we moved from a rental into the first home we bought (with the identical contents we had in our rental) our insurance rates back then ('91) were WAY more than $100 per year. when we sold another home in '06 and moved into a rental for about a year the rates plummeted.

when I read my new homeowner's quote each year to see where the increases in cost come from it's never from coverage that was included when I rented-it's all from issues that I as the homeowner (vs. being a renter) have responsibility for.

unless you own the land under your house, you will pay (increasing) property taxes FOREVER.

even if you own the land under your house you still pay increasing property taxes. we own our home and land outright-we still get our property tax bill the same day in the mail as all the mortgage holders in our neighborhood.

To the bolded, you may not be paying property taxes directly, but you are paying them through your rent. There is not a landlord out there that doesn't foactor the taxes into what they charge you. This is a sore spot for me, I'm tired of people telling me I don't have a say in our local politics because I'm just a renter and don't pay taxes

THANK YOU!!!!!!!!!!!! it drives me mad when I hear dd talk of how her roommates and other renters she knows think it's 'a waste of time' to vote on bond issues in local elections. there is seriously a mindset among far too many who rent in our nearby college towns that these bonds will have no effect on "me". SERIOUSLY??? wait until their next lease renewal comes up and they find out that the increased property taxes their landlord has to pay has been rolled over into a higher rent increase than they've seen in previous years-then they will see how it effects them.

IMO- owning a home is only an investment, when it comes time to sell. If the market has increased/also good for equity loans like my husbznd and I did to buy out his siblings for my FIL's condo

and like with most all 'investments' it comes with risks-we were lucky with our last home ownership 'investment' and sold right before the market crashed there in spring '06 for about 3x what we purchased it for. people who bought any of those homes from early 2002 through spring 2006 are underwater so far as what they paid vs. the current sales values. even those who bought before the massive escalations in prices (2002 ish) would be selling today for less than they paid (close to a hundred thousand).




I've rented and owned-both come with benefits and detriments. there have been times w/home ownership I've wished I had a landlord to call to deal with an issue, but on the flip side when we were renting and had a less than responsive landlord there were times I wished I owned the property so I could address the issue.

 

[learningtolive]

I rent and no shame in it to me. I get the whole "equity" thing but I also like to move around quite a bit and if I do purchase a home, I would like it to be somewhere I KNOW I want to live more long-term. I live in Chicago so finding a good area for a decent price is difficult, but then DH and I always talk about moving to a diff state in a few years. So for now, renting it is. No worries about maintenance, feeling "stuck" and finding what we like

 

[tvguy]

boy howdy-that's never been our experience. when we moved from a rental into the first home we bought (with the identical contents we had in our rental) our insurance rates back then ('91) were WAY more than $100 per year. when we sold another home in '06 and moved into a rental for about a year the rates plummeted.
.

I wish the insurance was only $100. The DIFFERENCE between homeowners and renters was $100.

 

[barkley]

I wish the insurance was only $100. The DIFFERENCE between homeowners and renters was $100.

I understand that, never meant to imply $100 TOAL PREMIUM a year for renters or home owners. for us the difference between renters insurance and homeowners was hundreds of dollars per year different-NOT $100 PER YEAR. in 1989 I paid over $50 per year for BASIC bare bones renters insurance in northern California (I had maybe at best-5000 in personal property coverage).

I look to what our daughter pays for renter's insurance currently and there are ONLY 2 line items of coverage-personal property and personal liability.
I look to my homeowners and there are at minimum 8-personal property, personal liability, dwelling, separate structures, loss of use, medical payments to others, extended replacement cost, building ordinance costs...all to the tune of several hundreds more per year than dd's renters.

GRANTED-I could lower our coverage, but even if I JUST covered the 2 line items dd has in her coverage BY VIRTUE OF BEING A HOMEOWNER I have MUCH higher liablitly and the cost would still be MUCH HIGHER.

by way of example-we sold our last home in '06 and moved into a rental home for 10 months (same neighborhood, same rate criteria). our personal property changed not a penny. we opted b/c as renters we would not engage/hire others to come on the rental property (our landlord would be on the hook) to take the minimum available amount of renter's personal liability insurance (the same amount our dd now has)-

the result was at minimum $500-$600 per year LESS in premiums. the difference now would for comparable personal property/personal liability, (based on neighbors who have recently sold and moved into rentals pending out of state moves)-hundreds of dollars MORE by way of cost differences

 

[leebee]

I've always said I'd give my right arm for a good landlord, and now is one of those times. My 115 year old house needs a new front porch. The siding needs cleaning and replacing, and the gutters need to be replaced. The dishwasher has died and the refrigerator really needs to be replaced (it's a side-by-side model, and anything against the sides freezes, the slider racks on the two drawers are broken, and the freezer doesn't function efficiently). The stove is a slide-in model, and while it seems reasonable to replace it when buying new appliances, cheap models run about $1200. We have a cinder driveway that needs to be regraded, the roof on the shed needs replacing (actually so does the entire shed- hoping a strong winter storm will bring a tree down on it and homeowners insurance will pay to have it all cleared away), and there's constant yard work, replaced by shoveling in the winter. Summer means minimal heating oil costs but our electricity charges will double; no central air means running fans and dehumidifiers all summer to keep the house livable. Oh yes, and the deck needs to be stained/winter sealed. Yup, I'm about ready for a good landlord.

HOWEVER>.. for $1200 a month (incl. taxes and ins) plus utilities (water/sewage, heating oil for house/water, electricity) we "own" a 2000 square foot, 3 bedroom/2bath house. We bought it in 2006 and when we refinanced in 2013, it evaluated for exactly what it had 7 years prior, so that's good. If we sell, we have about $50K in equity. I am sure we've put that much into it, but at least we'll get something back. We live in a small college town, in easy walking distance to the town (about a 5 minute walk) so it'll be easy to sell for a decent price, as long as we keep up with the maintenance... which leads me back to the "good landlord" mindset! In this area, it'd cost about $1100 a month to rent a 2 bedroom, condo/townhouse type apartment in a complex with heat/water included (and shoveling and maintenance and yard stuff dealt with). Sometimes, it's a toss-up!

 

[tvguy]

I understand that, never meant to imply $100 TOAL PREMIUM a year for renters or home owners. for us the difference between renters insurance and homeowners was hundreds of dollars per year different-NOT $100 PER YEAR. in 1989 I paid over $50 per year for BASIC bare bones renters insurance in northern California (I had maybe at best-5000 in personal property coverage).

I look to what our daughter pays for renter's insurance currently and there are ONLY 2 line items of coverage-personal property and personal liability.
I look to my homeowners and there are at minimum 8-personal property, personal liability, dwelling, separate structures, loss of use, medical payments to others, extended replacement cost, building ordinance costs...all to the tune of several hundreds more per year than dd's renters.

GRANTED-I could lower our coverage, but even if I JUST covered the 2 line items dd has in her coverage BY VIRTUE OF BEING A HOMEOWNER I have MUCH higher liablitly and the cost would still be MUCH HIGHER.

by way of example-we sold our last home in '06 and moved into a rental home for 10 months (same neighborhood, same rate criteria). our personal property changed not a penny. we opted b/c as renters we would not engage/hire others to come on the rental property (our landlord would be on the hook) to take the minimum available amount of renter's personal liability insurance (the same amount our dd now has)-

the result was at minimum $500-$600 per year LESS in premiums. the difference now would for comparable personal property/personal liability, (based on neighbors who have recently sold and moved into rentals pending out of state moves)-hundreds of dollars MORE by way of cost differences

I paid $100 (that's about $250 in today's dollars) a year in 1982 for renters insurance on an 1,100 square foot condo with a $25 deductible. For some reason my homeowners has dropped this year about $200 a year to $625 a year with $1,000 deductible on a 2010 square foot house.

 

[pryncess527]

IMO- owning a home is only an investment, when it comes time to sell. If the market has increased/also good for equity loans like my husbznd and I did to buy out his siblings for my FIL's condo. I don't see either property as investments.

That's true of most investments though. Bonds guarantee returns but many investment options contain risk and you won't actually know if it was a good investment till you sell. My house was a safer gamble than many stocks I've owned!

 

[Rhie]

Those sound like entirely valid reasons to rent, to me. Do what you need to do. And if people bug you, maybe remind them of the housing bubble that happened not that long ago. I rent with friends right now because I am in college and plan to move in a few years when I graduate. So no point in buying right now.

 

[scrhsa]

I've been in my home 12 yrs now. I would SO go back to renting. I'm done with all the maintenance, mowing, weedwacking, trimming branches, plumbing issues etc. I told my husband that when our girls are all out of the house and securely on their own, I would like to go back to renting. I told him that if the girls all live in different places we can pack up and live near each one for a couple of years each I am also ready to purge and downsize. Get back to the minimum of what I need to live. As I get older I really don't relish the idea of having to go through or have my girls go through all my stuff as I go into a nursing home or with one of them The only thing I would want is enough patio for a container garden! Oh, and a craft room

 

[MickeySP]

I sure disagree with this reasoning!! According to you, our home built in 2001 will be needing major maintenance in 15 more years! Not if it's kept up, it won't! Will probably need a new roof (maybe), but otherwise the outside was built to be nearly maintenance free, up graded interior floors, etc.

Also, where do you live, and what price home are you saying is $12-25,000 annual taxes?? Our home is valued at $599,000 and we pay $3,300 taxes. You'd better believe that renting all the years we've owned is definitely not the thing to have done. You could not rent our home for 'one month' for the taxes and maintenance that we pay 'yearly'!

We now have all this as equity instead of money down the drain, and nothing to show for it. To each their own!

ITA, but it depends on where you buy. Location, location, location. We bought 100 feet from the beach in Mass, even when RE dove we stayed level. So now we paid it off we have a HUGE equity that we can draw on. It's like having a 600,000 dollar investment we got to use too.

I will say our taxes are higher than other towns but you live by the beach you pay a premium.

Only you know what is right for you. Nothing wrong with either scenario.

 

[Goofy_Disney_Dad]

ITA, but it depends on where you buy. Location, location, location. We bought 100 feet from the beach in Mass, even when RE dove we stayed level. So now we paid it off we have a HUGE equity that we can draw on. It's like having a 600,000 dollar investment we got to use too.

I will say our taxes are higher than other towns but you live by the beach you pay a premium.

Only you know what is right for you. Nothing wrong with either scenario.

Now you're just rubbing it in...

 

[MickeySP]

Heck it wouldn't be the DIS without a left handed brag Having had a Dad that was a real estate lawyer/bank president I leaned early on location & investment.

 

[tvguy]

One of my wife's co-workers moved into an apartment when he was in college and is still living in that same apartment 40 years later. He is a minimalist, and a workaholic, a short work day for him is 12 hours and he usually comes in for a few hours on Saturday and Sunday. His girlfriend moved in with him 35 years ago, and yes they STILL aren't married. She too is a minimalist and a workaholic.
They make no bones about the fact they don't want to lift a finger when it comes to keeping up a house, and they have a maid come in to clean their 800 square foot 2 bedroom apartment. So it clearly works for them.
And every 7 years the landlord puts them up in a hotel for a week because he paints, replaces carpets and all appliances on a 7 year cycle. This year, he agreed instead to sent them on a Carnival cruise for a week. Costs the same as the hotel for a week!

 

[North of Mouse]

ITA, but it depends on where you buy. Location, location, location. We bought 100 feet from the beach in Mass, even when RE dove we stayed level. So now we paid it off we have a HUGE equity that we can draw on. It's like having a 600,000 dollar investment we got to use too.

I will say our taxes are higher than other towns but you live by the beach you pay a premium.

Only you know what is right for you. Nothing wrong with either scenario.

I also agree with you to a point! We've also learned the location, location, location mantra over the years also.
But, everyone's ideal location varies greatly. I'm from so. LA and having seen firsthand devastations from hurricanes, we have no desire to be on the coast. Yes, we may be unusual!! Our ideal location is Eastern USA slightly N. of a larger city in the upper south with rolling hills in a protected watershed! (3 hrs. from coast, 4 hrs. from mtns.) Great place, great weather, values are holding, but we don't pay county 'and' city taxes, but have all the city benefits.

We're each happy, and that's the way it should be!!

 

[MickeySP]

I also agree with you to a point! We've also learned the location, location, location mantra over the years also.
But, everyone's ideal location varies greatly. I'm from so. LA and having seen firsthand devastations from hurricanes, we have no desire to be on the coast. Yes, we may be unusual!! Our ideal location is Eastern USA slightly N. of a larger city in the upper south with rolling hills in a protected watershed! (3 hrs. from coast, 4 hrs. from mtns.) Great place, great weather, values are holding, but we don't pay county 'and' city taxes, but have all the city benefits.

We're each happy, and that's the way it should be!!

Luckily before all the rules & regs came in our town built a natural jetty/rock wall not a cement seawall. So we have passed every hurricane since the water breaks & dissipates the force over the rocks. I know beach living is not for all, but like my Da said - that is why they make chocolate & vanilla.

 

[lizabu]

Yes you aren't building up equity, BUT you also aren't paying property taxes, maintenance, and your renters insurance is much lower than homeowner insurance in most cases. Those costs (especially upkeep and maintenance get overlooked in equity calculations a lot).

In the new economy renting is actually a smarter financial decision in more situations and the old norms about home ownership don't apply as often. (Some of this is dependent on your market)

This was exactly what my financial planner told me. He said that buying a home isn't the investment it once was. Buy a home if you want to have a garden to dig in or if you like the idea of renovating to meet your specifications but don't buy because you think it's an investment.

 

[barkley]

I have to agree on the maintainance/upkeep factor re. equity calculations.

I know to a penny what 'routine' maintainance and upkeep on our current home runs b/c I put a set amount into one bank account each month to cover it-and it adds up on a yearly basis! pest control, yard upkeep, deck upkeep/sealant, hvac filters, carpet cleaning, touch up paint....just the 'knowns' without factoring in the odd unanticipated electrical, plumbing or appliance issue.

I KNOW when we rented (apartments and a house) that the landlords figured into their rent calculation some $$$ to cover this-but when I look at what kind of maintainance/upkeep those places required/had done when we lived in them vs. what we were paying in rent it in no way came close to the costs (lighting fixture went out-landlords paid, hvac needed repair-landlords paid, plumbing backup-landlords paid, in ground pool pump bit the dust..........).

one of the other factors with maintenance/upkeep costs that many first time house buyers don't think about until they've moved in and have to start shelling out the money for it is-the 'stuff' you need to have to DO the maintenance/upkeep. lawns don't mow themselves, that little spray bottle of roundup isn't going to work for your entire yard, the step stool isn't going to work to replace your light bulbs on those nice high ceilings....

when we lived in a traditional subdivision you could always tell the first time homebuyers by the stuff they were running out to buy within days of moving in-lawn mower, weed whacker, leaf blower, hoses, rakes, shovels, ladders, wheel barrel....where we live now it's all that PLUS a snow blower and or snow plow, snow shovel, roof rake, gravel rake, back pack weed sprayer, brush cutter...-and without fail ultimately within a year some kind of vehicle (tractor, atv, 4 wheeler) to put a better plow on (they figure out after the first good dump of snow that the one they got to attach to their little riding mower doesn't cut it, attach a brush cutter to, mount a sprayer on...(and subsequently some kind of new outbuilding to house all this stuff).

I look to when my mom and mil sold their homes-and the years of accumulated maintenance items-it was pretty basic but it added up in cost. I look to neighbors who have sold in recent times and their acquired stuff REALY added up-and if they weren't taking it with them they in no way near recouped what it cost to upkeep some items (repairs, sharpening, fuel, oil, normal part wear and tear) let alone what they paid for them.

we've had neighbors who truly believed they had gotten (for these times) a very good return on their home upon selling. ignoring any improvements they made and just knowing their original purchase price, their sales prices-then deducting the realtor commissions, our state's excise tax on sales AND all the accumulated maintenance stuff they are selling for pennies on the dollar at yard sales before they move-ummmmmmmmmmmm in most cases I suspect the numbers would show an overall loss on their 'investment'.