Agnostic.com

60 7

Rent or own (a home)?

I'm renting a townhome I adore. The owner recently offered to let me buy it, if I'm interested. I have never owned a home by myself.
I'd love to know what members think the most important things to consider are when making a decision to buy a home.
Thanks in advance!

RoadGoddess 7 Oct 22
Share

Enjoy being online again!

Welcome to the community of good people who base their values on evidence and appreciate civil discourse - the social network you will enjoy.

Create your free account

60 comments

Feel free to reply to any comment by clicking the "Reply" button.

1

It's one thing to afford to buy a home. It's another thing completely to afford upkeep, improvements and ordinary maintenance when things break, which they will. Then there are taxes to consider, and insurance. Are you ready for all that, mentally and financially? OK, then.

10

I’ve owned five homes and built four of them. I personally would never rent again. I did that in college and two years in the 90’s, you’re just throwing your money away. Mortgage income tax credit is another thing renters cannot get.
There’s lots of things to consider. You will need a home inspection without question. Closing cost are expensive, if you’re not staying at least five years forget about it. What are his reasons for getting out? Interest rates are on the rise and he needs to help with closing costs.
You will need to be careful because of the pre existing relationship that he doesn’t try to cut corners( ie: talk you out of getting an inspection). Don’t even think about financing though him if you’re serious, get a pre-approval from your financial institution. The home needs to be properly appraised. This is a cost to the owner, not you.

7

I am selling my third home and renting from now on...I have no kids to leave anything to and I want the freedom from repairs and maintenance. I have done the math for the area I want to live in and renting makes way more sense for my situation...at my age, my home would be taken if I need to go into a nursing home...

To be honest, everyone told me that owning my homes was an investment, but if I were to add up all the money spent on upkeep, taxes, etc. and factored in tax deductions, it was a poor investment. I am probably lucky to break even.

You have to decide the pros and cons of your own situation...can you afford escalating rent costs? Do you like your community enough to stay put for a very long time? Will you really get a tax deduction (with the new tax act, itemized deductions will be almost impossible unless you have way more than the standard)? What is the resale market and would you ever need to sell quickly? Do you have an association with fees that holds any restrictions? Do you have savings for repairs of big ticketed items? (ask the owner if they are willing to pay for a policy for a year on these items)...Good luck and plan carefully...

6

No one in the United States truly owns there home. Taxes are due on real estate like everything else. But you may be able to save as your home becomes more equitable, and mortgage payments are usually smaller than rent. You will have to save for insurance, repairs, and other improvements that may be required.

Even with the high real estate tax where I live in NY my house appreciates at more than twice of what my yearly real estate tax is.My house was paid off years ago so this adds to the profit so of course I am going to say buy,but everyone has a different situation according to where they live etc

@richiegtt not really a profit unless you get lucky & continually buy & sell at the right time. otherwise housing just keeps pace with the true increase in inflation.
problem with renting is that every time the working class person starts to get ahead the greedy landlords raise rents more than the increases.

6

Well, I would never buy a townhome because I don't want to be that close to my neighbors....but buying is better than renting IMO if you are going to be there at least 5 years.

NEVER buy without a complete home inspection by a licensed inspector.
Research the past sell/purchase prices (public information).
Ask to see the title search from when the current owner bought it.
Get home owner insurance quotes and get the tax information -- those will be added into your mortgage.
Is the owner going to hold the mortgage or will you be getting a traditional mortgage?

6

Owning is like money in the bank, especially if you keep up on maintenance. Rent is money you will never get back.

In my opinion, buying property is not the best option. There is a big economic crisis right now, so I would advise you to save your money. Buying a house on the beach is very expensive. If you want to relax on the islands, it is better to rent a house on Siesta Key. The location of the houses is pretty ideal, just a short 5-minute walk to the restaurants and shops of Siesta Key Village, yet just far enough away to be quiet and peaceful. In my opinion, an island holiday is the best holiday there can be.

6

In addition to a mortgage, can you afford ALL the other required expenses that will go with it (i.e. Maintenance, insurance, etc)??????
If you've got any kind of yard, can you afford to buy a mower, or hire someone to take care of the yard?
Can you handle routine maintenance, or afford to hire someone?

I've owned a home, and I've rented.
Both have their advantages, as well as their drawbacks.
I think a lot depends on where you are in your life, also.

If you love where you're living, that has A LOT to do with it.
Whatever you do, BEFORE you decide anything, hire a reputable,
independent building inspector to come over and give the place a good once-over.
Ask people you know if they have recommendations on who is a good building inspector. Don't hire whoever the owner tells you, or the bank.
A building inspector will favor whomever is writing the check.

Good luck!

+1 on the inspector and make sure the check the foundation and mechanicals

5

I moved from a home I owned to an apartment a few years ago. Month to month, on the surface, the home was cheaper. But now, I don't have to come out of pocket for major repairs or property taxes, & renters insurance is a fraction of what homeowners insurance was. I spend about an hour a week keeping the place clean instead of many hours, & I no longer have to deal with yard work, which I hate doing. I'm planning on moving next summer to a livelier area of town. Easy to do, since I don't have to worry about listing a house, getting the money I need for it, etc. Essentially, for the somewhat higher price of rent, I have far more free time & less stress than I ever did before. I can't tell you what's right for you, but be informed, & be honest with yourself before making a decision.

5

In real estate the 3 most important items are location, location, and location.

If your credit is good and you can get a loan, home ownership is usually cheaper than renting. However, you are responsible for all the repairs/replacements. And when you own you can't simply break the lease and move out.

There are some good online resouces about home ownership that will help you make that decision. I am a home owner, I'm also 60 and have owned many houses and rented a few apartments. For me, more space for less money was a consideration.

if you buy, get homeowner's insurance (it is actually required for some mortgages).

g

@genessa Insurance is probably required for most, if not all, mortgages.I would be surprised and suspicious of one that didn't require insurance.

@bingst we did a refi and it was not required. i don't even know if it was offered.

g

4

Bought this house 45 years ago. It was old then. It is in a tiny
rural community, has a pond , an active railroad track, neighbors who watch out for me and each other and enough land for me to garden.

4

I also rent a townhouse. I love it. I love renting for several reasons. I have zero responsibility. If something breaks all I have to do is call and someone else takes care of it. People tell me all the time I'm throwing my money away. But it is a carefree lifestyle I like.

4

I've always owned. My first wife and I bought our first house right out of college. It was a fixer-upper. We worked on it just about every weekend for 4 years until we sold it! We moved in with my parents for a year she got her Masters. We bought our next house (a log cabin) the year after that. We lived there about 12 years before buying our 2nd house and renting out the first. We bought a 3rd house in May and live in that one now, renting out the first 2.

4

I own my home. I would, however, rather rent than own so that if I don't like my neighbors, I can move.

that's why i live in a townhouse strata complex.
don't need to worry about someone moving in next door & deciding to tear down an old truck & rebuild it.

4

Bought ....as an investment for my children , when I 'm gone .

Same here, already paid it off!

4

I haven't read the comments of others here, but here's my .02: If you intend to stay put it makes sense to own. There are multiple advantages to ownership. In the end, you get all your money back versus paying someone else's mortgage as a renter. Your home also becomes a source of cash if you need it. The downside is that it's all on you should something break. You probably have a good sense of the condition of this place since you live there. If you can swing it, I say go for it!

If you didn't already live there I'd say you should do some "comps" to see what other townhomes in your development have sold for recently (and you probably should still do to ensure you get a decent deal).

Part of the purchase process is having a home inspection done. This would reveal any obvious issues and give you an idea of what potential repairs may be in store.

Your credit needs to be pretty stellar to buy a home.

Obviously, the more you can put down on it, the lower your monthly mortgage will be.

Hope this is helpful.

4

Questions to ask yourself - there are more but this is a start.
How long are you planning on staying in that area?
You already answered this one - do you like the house (townhouse)?
Can you afford it? (And as someone stated - it may be cheaper to own, even with taxes & insurance added in.)
Is it large enough / small enough should your current living arrangements change (ie. get married/divorced, have children or they move out...)
What is the market like in the area? Could you sell or rent it should need to move?

I rented when I was younger and have owned, either with my ex or on my own, since 1998. I love owning. Currently I own the house I am living in & I have a rental house - fyi my rental income is almost double my mortgage..... I enjoy remodeling & there are not many places you rent that will allow you to change things.

3

Imdiabled I own my home truck and motorcycle

Good man!

3

Get an appraiser to evaluate things like plumbing, A/C, electrical systems. Learn about taxes, costs that might be associated with a complex of townhouses -- dues, yard maintenance. Ask your neighbors what about these costs. How hard is it to sell when you want to? Search on-line for something like "help buying a town house". You may find guides that will help.

Yes,how old is the furnace,has it been serviced(clean or replace the airfilters),and the condenser coils,if it is a unit next to the house.

3

Own, it's just more economically sound to own your home compared to renting in my area.

3

@RoadGoddess, in addition to what others have already posted, there's a national (US) organization called Neighborworks that offers all sorts of information for homeowners/first-time homeowners. They have classes on finances and homebuying, and offer information on things one ought to consider. [neighborworks.org] <----Tips

I don't know about other parts of the country, but our local Neighborworks has partnered with one or more lenders who will give a discount on closing costs to people who finish the homebuyer class. I've also taken a women's home repair class through the local Neighborworks, and hope to take the home remodeling class next. There are also grants and low-interest loans available to help with a downpayment, repairs, etc...

Credit Unions are a good place to look for information like counseling concerning improving credit ratings, how to work towards purchasing a home if it's not currently financially possible, etc... Community Action Agencies also offer information on improving credit, budgeting, etc...

I use Realtor.com a lot to see what's available in my area, and to window shop in other parts of the US. On some online real estate websites, you can also look at the crime rate in different areas, for bus stops, groceries, restaurants, etc... There are others.. Trulia, Redfin,etc... they all seem to have pluses and minuses.

[investopedia.com]

@RoadGoddess You're welcome! I think there's still a Federal tax rebate (?) if one buys a solar (something... panel? water heater?) for one's home. In Vermont, there's also a tax credit, I think... and low-to-no interest loans to install solar, improve one's heating system, etc... I'm hoping to get my own home before I get much older, so am scrambling around collecting intel. I never thought I'd be able to afford a home, but it looks like I will be able to if Fearless Leader and crew don't gut the social safety net.

3

I only owned a property for about four years forty years ago. Since then I have rented and for me that has allowed me freedom to move on when necessary without the angst and frustration of selling and all that goes with it. Obviously I can only speak for myself, but I have no regrets at all regarding not being a home owner.

3

I'm doing both at this time. I'm renting my apartment, and own a home in another city (and renting it!). There are pros and cons to both. Trust your gut (and wallet) and do what YOU think is .

3

If I could do things over again - I'd rent because owning a home and the ability to sell it for what we have invested with fluctuating market values has kept us in a State that I hate. For health reasons I need to get the heck out of here but chances are I'll die here and that just s--ks.

3

The most important reason to buy (before interest rates go up again) is because you're currently paying your landlord's mortgage payment and throwing away money when you could be saving equity. Most important thing to do, if you know the price you can buy it for...call a mortgage person and find out what your mortgage payment would be...I bet it will be lower than the rent you are paying. Tough to find a home you love...figure out how much the taxes are per year and any upkeep and compare it to your current budget. It pays to buy because most likely you will make a profit when you decide to sell it. Just FYI I'm a Realtor and real estate attorney. Plus if you do a private deal between you and the landlord you can pay less because they won't have to pay the 6% commission.
p.s. there is also the mortgage deduction on your taxes

lerlo Level 8 Oct 23, 2018
3

I'm a homeowner, but I kinda wish I could just rent. Buuut, I can't find a 4B/2B/2 car garage apartment or duplex for as less as my mortgage is. Plus, I love ALL my neighbours. That makes it worth being a homeowner.

3

One downside of renting - if the owner decides to sell to someone else. Owning removes that risk on a place you love. I echo @KKGator’s comment below - get a thorough inspection done to understand not only the current condition of the property, but also what might need repairs or replacing in the near term. Once you own it, the burden is on you to maintain it. But with that does come the freedom to do what you prefer rather then what the owner agrees to.

While your monthly payment might go down rent vs mortgage (unless you are making a cash offer) don’t forget you will need to pay for property taxes, homeowner’s and flood insurance. You might als want to look at property values on HAR, Zillow, and Redfin to get a rough idea how prices are appreciating in your neighborhood. Factors such as schools, shopping, commute make a neighborhood attractive which helps values appreciate over time.

FWLIW - when I moved to Houston, my decision was to buy not rent. I like the permanence of owning.

Write Comment
You can include a link to this post in your posts and comments by including the text q:206604
Agnostic does not evaluate or guarantee the accuracy of any content. Read full disclaimer.