Renting before Buying

Discussion in 'Community Board' started by vacationer1954, Feb 9, 2019.

  1. QueenIsabella

    QueenIsabella DIS Veteran

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    Actually, it just means different variables. You could land in a really nice 55+ community--here's hoping. But you could also wind up in one that looks really good online, but then doesn't have the vibe you're looking for when you get there. There could be faulty construction that's not immediately obvious, there could be fewer (or lame) social activities, upkeep might not be what you expect, fees and expense may spiral. It's really easy to put on a good face online or for a short visit. In your situation, I would spend a lot of time driving around a particular community, and especially talk to people who already live there about the good and the bad.
     
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  2. smiths02

    smiths02 DIS Veteran

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    I know people who moved within the same county and they rented while their house was on the market, then they purchased. The market was such in this area that no one would sell with a contingency for them to sell and/or the bank would not approve the mortgage without the actual down payment money secured and the other mortgage gone. As Disney Junky stated, you would be in a better negotiating position for selling your house and for buying another house.


    The other advantage is that you can kind of wait the market out a little...either until what you really want comes open or the prices are not at the peak.
     
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  4. smiths02

    smiths02 DIS Veteran

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    Buying a house costs a lot of money. There is little guarantee that you would recoup all those closing costs, etc. in a year. I think the standard advice is not to buy unless you plan on staying for 5 years.
     
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  5. smiths02

    smiths02 DIS Veteran

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    Sorry, I didn't see your previous post. I don't think it is safe to assume that you will buy and sell the house at a gain or a wash within a year. Also, you do not really have to rent an entire year. A few months would probably be enough. You are correct in that there would be a penalty for breaking a lease, but you could reduce that.
     
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  6. vacationer1954

    vacationer1954 DIS Veteran

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    Yes, I outlined all the costs up above and compared that to the cost of rent.
     
  7. vacationer1954

    vacationer1954 DIS Veteran

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    The point is that it is likely to be either a big loss as much as it is likely to be a big gain. Everything is a risk. For example, by renting, the place you will end up buying at the end of the year of renting could have gone up in price quite a lot.

    Yes, I outlined that in what I wrote above. It is a comparison of worst-case scenario to worst-case scenario. It makes no sense to compare the worst-case scenario of one decision to the best-case scenario of the opposite decision.
     
  8. potterfanatic

    potterfanatic Mouseketeer

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    When we moved from Florida to Vermont we decided to rent for the first year until we got a feel for the town and if we wanted to stay here. Then another year went past, and another, and we've now been renting for 5 years. We found the town we wanted to be in but when we found out property taxes were $600 a month on a 200,000 house, buying just didn't seem as appealing anymore. So all that to say, I think renting before you buy is a great idea, as long as you're okay renting for as long as it takes for you to find exactly what you're looking for.
     
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  9. barkley

    barkley DIS Veteran<br><font color=orange>If I ever have a

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    a variable i would research if you would consider buying and selling w/in a year is what would it entail selling w/in a particular 55+ community. i don't have any experience in the florida marketplace but some years ago a friend in another state had his mom suddenly pass leaving him to deal with selling her home in this type of community. he found that selling his mom's place was a good deal more challenging than a traditional real estate transaction. the community had what equated to cc&r's that set a criteria (beyond minimum age) for a buyer that severely limited his potential sales pool. on top of that there were rules wherein if the property was uninhabited for so many days (in a non snowbird type situation) the community organization took over in some sort of 'management and upkeep' capacity and charged pretty hefty fees on top of the ongoing regular fees which he couldn't offset w/ so much as a renter b/c the contract his mom bought under strictly forbade non owner occupancy (and since he wasn't 55+ he couldn't live there).

    i mean i guess it fine if you decided you didn't care for a particular community such that you wanted to sell after a year but would you be willing to continue living in the home or paying to support 2 homes if the resale criteria/market was lengthy?
     
  10. jerseygal

    jerseygal DIS Veteran

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    With the new tax laws, many will find that there is no tax incentive to home ownership anymore, other than hopefully building appreciation. Continually hearing on the news for the last couple of days that many in high income tax and real estate tax states, NJ, NY, Ct are evaluating leaving those states. That's great that you found a rental that you love to call home for 5 years! Think that we will rent at least a year if not more when we make our move, really "digest" the market, watch prices, get to know the community.
     
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  11. jerseygal

    jerseygal DIS Veteran

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    :confused:
    We have been continuing do analysis of rental prices in Winter Garden vs Windermere. Interesting home prices and real estate taxes seem to be higher in Windermere, but the rental prices are comparable?:confused::confused: When we decide, having the flexibility of both communities will make it easier finding a rental. Another factor is some HOA's prohibit short term rentals which we like. We prefer those that have a 1 yr min rental so that the community doesn't have that transient feel. When we ultimately purchase, we won't consider a community where the HOA permits rentals less than a year, better for the homeowners to have a more stable community imo. Thanks in advance on Windermere rentals vs Winter Garden.:goodvibes::yes::
     
  12. mnrose

    mnrose Queen of all she surveys

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    I've moved to entirely 'new' places twice. Once I rented before buying (moving from my law school apartment to an apartment where I first started a lawyer position), and once I bought straight away (moving from San Francisco to suburban New Jersey. I did not regret either decision. In the second case, I knew that we would be in NJ for a number of years (it was a transfer to a higher level corporate job), so buying made sense. And, the area we could "buy" in was constrained by the location of my job....they were all pretty much the same so what the heck, might as well buy. LOL. We bought based on the property we liked best (and we previewed maybe 60 of them (seriously) in one hellish week. We did one or two areas a day. I will also add that we've made a bunch of other moves, but to places we've lived before so we knew exactly what areas we wanted before making the move. In those cases, buying vs. renting makes the most sense.

    Now, if I were to move to an entirely new area, I'd probably rent first. DH and I are considering whether we want to make a major move in a few years time, and we're talking about the potential for that to be a foreign country for at least a few years. With that added complexity, we'd almost certainly rent. A foreign country is a different animal entirely.
     
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  13. jerseygal

    jerseygal DIS Veteran

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    Were prices comparable in NJ to San Francisco? Certain parts of NJ are very pricey, for example areas with good mass transportation/commutes to NYC like Hoboken/Jersey City. Areas like Princeton/West Windsor in central NJ/ Morristown/Randolph in Morris County have always been pricey, good schools, in suburbia, folks are looking for highly rated schools. Wow, 60 properties, that's a lot, but better to walk away feeling you did "your homework" as best as you could given your time constraint.
     
  14. vacationer1954

    vacationer1954 DIS Veteran

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    My spouse is still inclined to purchase outright. The strongest arguments about the advantages of renting before buying only apply if we could rent in the specific communities where we would want to live, 55+ communities with community pool, lots of community activities, etc. Those places, though, don't come up in the searches my spouse does. I bet many of them prohibit rentals.
     
  15. jerseygal

    jerseygal DIS Veteran

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    Have you checked Zillow or Realtor.com? Agreed, beneficial to rent in a community where you may want to live. On Zillow, in the details section in the information on the website generally gives the name of the HOA and development name.
     
  16. mnrose

    mnrose Queen of all she surveys

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    We were the only people my realtor in NJ (who was amazingly good....she did a great job for us) worked with who actually marveled at how far our money went, instead of being "sad" about what you couldn't buy. We spent about what we had sold for in California, but we got a house that was twice as big, on a HUGE (5 acre) lot. That kind of house where we were from in CA would have been 4x what we paid, if it was available at all. LOL. We lived in Morris County, just west of Morristown. Lovely, lovely area. I worked in Basking Ridge, from which you can likely guess who my then employer was. Largest employer in Central Jersey at that time. Not anymore. We looked all over creation....out by Clinton, Somerset County, Bedminister, Basking Ridge. Morristown proper, Long Valley, etc. before choosing Chester. We moved back to California 6 years later, and had to spend twice as much to get a house that was 40% smaller on a tiny tiny lot.
     
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  17. NotUrsula

    NotUrsula DIS Veteran

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    Some 55+ communities allow rental only from the property management company, so you can't rent on the secondary market, but can do so short-term for a try-before-buying agreement. Usually they limit to no more than 6 months, and often 3 months is the maximum.

    PS: When it comes to foreign countries, buying is often not an option unless you have dual citizenship. Many countries prohibit noncitizen individuals from owning real property. (In several, it is possible to purchase structures, but not the land they stand on, which is a TRUE tangle.)
     
    Last edited: Feb 14, 2019 at 11:18 AM
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  18. Cannot_Wait_4Disney

    Cannot_Wait_4Disney Ok all you A cattle, get in ...

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    A thread on the dis where the op asks for opinions whether they should do one thing or another and upon people not being a yes man, argues. Who would have thought we'd ever have one?
     
  19. barkley

    barkley DIS Veteran<br><font color=orange>If I ever have a

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    on this side of the country it's been popular for years for retirees to pick up and move from high tax california to no tax states like nevada and washington-and both are seeing an increase with the new tax laws. what i will be interested in seeing is how this will impact the area of paradise california. it was a hugely popular place for people to retire to when we lived in northern california a decade or so ago so i'm wondering what with the new tax laws if they won't see a significant percentage of their population who were burned out opting to take their insurance money, cut their losses and relocate out of state (esp. with the significant time-lines they are projecting for any kind of re-builds, the toxic clean up alone is going to take ages but now the heavy rains are complicating matters and they are going to have to rebuild all the underlying utilities-it will take years).
     
  20. vacationer1954

    vacationer1954 DIS Veteran

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    Actually, I never asked whether we should do one thing or another. What I asked was "What do we really get out of it"? My spouse is opposed, so if I decide I want to do it I want to be armed with the "pro's".

    A thread on the dis where the op asks for information and insights and instead posters insist on giving advice that they expect will be followed, as given. Who would have thought we'd ever have one?
     
    Last edited: Feb 14, 2019 at 4:42 AM
  21. jerseygal

    jerseygal DIS Veteran

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    Very small world, know all the communities that you mentioned! My MIL lived in Chester, lovely community!:goodvibes::yes::
     

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