Unclutterer

1. Posted by Jakob - 06/02/2011

   Who are you trying to convince?

2. Posted by Mimi - 06/02/2011

   my boyfriend is an architect and all of his clients and all of our friends/ family members ask us why we don´t build a house for ourselves. what my bf never says in public: “i do it all day long and i know what it´s about. building a house will get emotional, you will spend a lot of money because of emotions and this amount of money will tie you to these bricks for the rest of your life” and “once you turn the key in your brandnew house, it loses 20% of it´s value”.

   we live in a rented house from 1740. it is full of history and we love it so much. and we also love to call the landlord when the heating system is not working propperly or the faucet is dripping

   honestly, i never want to own a house.

3. Posted by Rae - 06/02/2011

   I’ve owned a house and been a renter. If I took leave of my senses and decided to settle down in one spot for the rest of my life and had to choose one or the other again, I’d rent a place with utilities included. One monthly bill to worry about and that’s it. You can actually budget. When I had a house I had the mortgage plus the contingency fund, which was never enough. It is very luxurious to be able to call the landlord when something goes wrong. Of course, you need to get a good rental property with a good landlord/property manager.

4. Posted by HokieKate - 06/02/2011

   I love renting an apartment right now. Our AC was out, and the maintenance man fixed it within an hour of when I talked to him! Our friends that have a house are stressed about how much it will cost to fix their broken AC.

   1970′s homes on half acres go for $150k here, and most of our friends and coworkers think we’re foolish for not buying yet. We will eventually when the baby is older, but right now it is nice to realize we don’t need a house.

5. Posted by Jen - 06/02/2011

   This is a really interesting thought. While we own our house, I’ve thought for a while (ok, since we moved in) that we’ll probably move back to an apt/condo after my son goes to college. This is in roughly 15 years but I’m sick of having a house. I’m not necessarily against owning, but a house is too much work for me. We’re not in to yard work, and it’s more upkeep than we’re interested in doing. So especially when we’re older a condo makes more sense (no worrying about snow removal either). But renting vs. owning an apt is very interesting since, as you point out, you also don’t have to worry about sudden home-related expenses like a furnace or flooding – renters insurance takes care of incidental property damage. This might be particularly attractive to people as they get ready to retire, since having large unexpected expenses could be a bigger burden at that time.

6. Posted by infmom - 06/02/2011

   We rented for 22 years before we were able to buy a house (and we never could have managed it if a friend of ours hadn’t been an ace real estate agent). We’ve had good and bad experiences with both housing situations.

   Most of our landlords were very good, and we always treated our rental as if it were our home. In nearly every case we left the place in better shape than when we moved into it.

   But all it takes is one bad landlord to sour you on renting, and we had two, one right after the other. One rented us a house and then sold it out from under us while we were en route from Kansas to California. Imagine arriving after a four-day journey with two small children and a truck with all your belongings only to be told you had 90 days to get out.

   The next landlord was trying to Get Rich In Real Estate, so he bought the house with a balloon mortgage. He never told us it was his intention to flip the place, so imagine being given a 30 day notice in the middle of a school year (that’s why he wanted us on a month to month rental rather than a lease). And then having the security deposit withheld for damage he knew was caused by the previous tenant’s dog, and selling off some of our belongings that he’d agreed to let us leave in the garage for a week while we got settled in the new place.

   I must admit it is great to be able to call the landlord or the maintenance office when something goes flooie in your rental. After seeing the bills for some of the maintenance we have to do on the house and knowing what we really should spend to fix some of the problems we have to live with because we just don’t HAVE that kind of money, I do sometimes wish I could hand it all off to someone else.

   But then I think about arbitrary rent increases and having the place sold out from under us and that puts it in perspective.

   When we make our next move (from California to somewhere else) we plan to rent for at leaset a year so we can take our time about finding another house to buy. And if it turns out we decide to keep renting, at least we’ll have 22 years experience as excellent tenants behind us.

7. Posted by kalle - 06/02/2011

   We’ve rented but decided to buy the last time we moved. And now we are 10 years away from owning our home. That means no more loan payments, etc.; whereas renters pay for the rest of their lives. Yes, we’ll save for the yearly property tax, but that’s nothing compared to what we’re paying now. Given the choices, I’ll choose owning over renting every time. That goes for my car, too.

8. Posted by Liss - 06/02/2011

   We were thrilled when we could finally buy our first home, and even more thrilled when we managed to sell it. We’ve been renting for the past few years and in this market it’s the only thing that makes sense. We are paying far less in rent than we’d pay on a mortgage – even if we put 20% down – for a house in an awesome neighborhood with fantastic schools. We couldn’t buy a house here (well, we could if we decimated our retirement savings and scrounged on top of that), but we can rent and leave the maintenance and fluctuating property values someone else’s problem.

   I do hope that one day we buy again, but that might be our retirement plan – buy a small, simple place in a lower cost of living area and pay into a maintenance fund without rent OR a mortgage to worry about! (That 20% downpayment today? If we never add to it, it will buy that little retirement house somewhere else outright in not too many years.)

9. Posted by lucy1965 - 06/02/2011

   jen, are we sharing a brain? *grin*

   In 10 years, I’ve had to do a complete tear-off and replacement on the roof (100 years’ worth of shingles), redo the 60-year-old boiler and the radiators, replace the water heater after a spectacular failure that sprayed water into the underfloor of the main level, gut and restore the walls and floor of the addition afterward —

   Will I get all that money back if I sell it? Good question: I don’t know. The local market being what it is, I’m pretty sure that we won’t get enough out for a down payment in the city we’d like to move to, and so we’ll be renting for at least the first year. I’m looking forward to calling the main desk and saying “X is broken; please send someone from Maintenance up to sort it out”, letting someone else handle snow removal, and not worrying about packages walking away from my front porch.

10. Posted by Gina - 06/02/2011

    kalle speaks from my heart. But all the other comments are very valid, too. Owning a home is a serious decision and certainly binds you to a place for some time. It is a very different mindset and commitment being an owner vs. a renter. After all the sacrifices you make with a home, ultimately you will be out of debt and not be paying rent for the rest of our life. Owning a home is really a form of saving for retirement. As long as you have a long term view on owning your home, you should always make good on the value, too. The comparison of the returns (1.3% on your home vs. 3.375% for stocks) does not really make sense to me. You do not take your mortgage payment (and all maintenance and repair costs) and alternatively invest it in stocks over the same period of time. You have to pay rent first b/c you need a place to live, and then could only invest the difference.

11. Posted by Jay - 06/02/2011

    Interesting perspective.

    It is always good to approach the rent/buy issue thoughtfully, not mindlessly. Renting may be best for some, and buying may be best for others.

12. Posted by Jasi - 06/02/2011

    The point of either is to live within your income with sound financial planning for the future.

13. Posted by Erin - 06/02/2011

    Thank you for this article. My husband and I currently own our home, but have decided to sell it and rent for the time being. My husband works an hour away and we want to move closer. He is also a full time college student so his time is limited and we don’t want it spent commuting. Our decision to rent has been a hard one. My husband’s family has always owned homes. The idea of renting seems like a step backwards to him. However, it is the best decision for our family right now. When he graduates in a few years we may be moving out of the area. It makes sense to not have a house to deal with on top of everything else right now.

14. Posted by DawnF - 06/02/2011

    Well put, Jasi!!

    Personally, I love owning our current home. We all feel so content, happy and comfortable here (mentally, physically and financially). We are in a super neighborhood with an awesome school district. The closest big city is a very comfortable distance for us – not too close yet not too far.

    We have also enjoyed the benefits of renting in the past, too and had good experiences with it.

    If it’s a joy for you to return home from a long day at work or a vacation and you walk in the door saying, “Home Sweet Home!” then you know you’re in the right place no matter how you’re paying for it.

15. Posted by Shalin - 06/02/2011

    One piece of advice I got from a mortgage officer was the following:

    Ultimately, the house that you’ll *really* enjoy living in *and* paying for is probably the last house you’ve chosen to own (usually b/c of retirement). Basically, you know you’ll be there for 10+ yrs and the property will likely increase in value by then and you’ll likely have addressed many other financial burdens.

    As I consider the house I own, even though I like HOA-free areas, I’d prefer a condo w/HOA dues because of me being early/mid-career and thus “professionally subject to mobility”. Also, upkeep and maintenance costs are lower and if I need to leave the area for personal/professional reasons, there’s much less on my mind if I rent out the place.

    Alternative property solution – tiny homes (mobile or non-mobile). But to go that direction means you’re really making a big lifestyle decision of which some simply can’t stand over the mid-/long-term, but others absolutely love.

    –S

16. Posted by Shalin - 06/02/2011

    @Jasi – well put indeed.

    I’ll just add saying I think the American dream should be “Live where you want and be financially healthy”. Home ownership not required or dis-encouraged…

    –S

17. Posted by jesinalbuquerque - 06/02/2011

    I owned for a while; when I moved, I started renting and never looked back. I think people who are happy owning homes and people who are happier renting are just different in basic ways; not better or worse, just different. There’s no need to declare one way “better” though during the real estate boom years it certainly seemed that way.

18. Posted by Shalin - 06/02/2011

    Okay, last thing (honest) – your choice of dwelling ideally should support your lifestyle. I mean, I think this is why @Erin (editor of this blog and the other Erin w/comment a few above this one) moved.

    With your money, you can loose and *and* regain it; but with your time, you can only loose it, there’s no chance to regain it… Choose wisely…

    –S

19. Posted by Another Tammy - 06/02/2011

    My husband, a financial advisor and analyst recently wrote why we won’t be buying a home soon either. Most people don’t pay attention to the fact that a 30 yr mortgage means paint almost double the “purchasing price” because of interest. Ouch! Do a test on mortgage calculator.org, you’ll see
    http://tamdiego.wordpress.com/.....ng-a-home/

20. Posted by Anita - 06/02/2011

    Very interesting article! I’m not entirely sure how it relates to uncluttering – maybe uncluttering “tradition for the sake of tradition” in favour of what makes better financial sense?

    I agree with your point of view though, and I’m looking forward to that becoming more socially accepted around these parts. The American dream – or at least the home ownership part of it – is a Canadian reality as well, and it has become a bit of a rite of passage in some ways. It is assumed that anyone in their mid to late 20s and with stable income is/should be looking into buying a house. At the moment rent and mortgage payments are about the same in my city, and I get the question on a weekly basis: “so are you looking into buying a house? Why are you tossing money into a black hole instead of putting it towards something *real*?”

    My argument is, yes, mortgage payments and rent may be on par. But that’s not accounting for interest on a mortgage. Or property taxes. Or utilities (all of which are included in my rent). Or upkeep and maintenance costs. But more importantly, it doesn’t account for all the time and effort it takes to maintain a house. I’ll gladly toss money into a “black hole” that takes care of trash and recycling, fixes my appliances, cleans and maintains all common areas, mows and waters my lawn, shovels and salts my driveway and walkways, maintains and secures my parking lot, cleans the outside of my windows and deals with any conflicts with my neighbours.

21. Posted by LQ - 06/02/2011

    I’ve been seeing this article and variations over and over. I don’t know if people are working really hard to convince themselves or what, but I’m not convinced. I never wanted a house as some kind of magical money machine. I’m just tired of living with strangers. I’m tired of not being able to paint my walls or hang more than a couple of things on them, tired of having crappy kitchen appliances, tired of not being able to garden (I know some people have nice little patio gardens, but it’s not possible here), tired of not having anywhere to store my bike, tired of having the world’s worst dishwasher, tired of having a single undivided sink with no chance of replacing it with a decent one, tired of being told what I can and cannot put on my patio, tired of not being allowed to dry my clothes outside (for real), tired of the water constantly being shut off due to their cruddy old pipes, tired of the neighbors’ noise, tired of my car being sideswiped on the street, tired of not being able to put up the blinds and curtains I want to cut down on the light and noise from outside, tired of patched-over (never fully repaired) leaks in the ceiling, tired of random inspections, and just generally utterly sick of living in this townhouse.

    I have friends who’ve bought houses recently and I know I’ll have to deal with repairs and other things. But at least I’ll be able to make some decisions.

    It doesn’t come down to number-crunching for everyone.

22. Posted by Rae - 06/02/2011

    @Shalin “Alternative property solution – tiny homes (mobile or non-mobile).”

    That’s what I went for. I bought a motorhome so that I can be mobile but still in my own home. I get to enjoy beautiful properties without having to deal with the upkeep, I can do most of my own repairs, and most issues are much cheaper to deal with than is a comparable problem with a fixed house. Sure, a motorhome is a depreciating asset, but it’s not much different from renting. I just put a solar panel on my rig so I’m no longer tied to plugging in at RV parks. Within a few years, once the rig is paid off, I’m going to be able to live in some of the most beautiful locations in North America and all it will cost me is maintenance on the rig, plus fuel. Even living in RV parks can be a bargain. I lived for four months near Vancouver, BC, in a gorgeous park with a pool for less than $1,000 a month, utilities and rig payment included. You can’t even rent a hovel in that area for that price.

23. Posted by Lori Paximadis - 06/02/2011

    Renting is the best choice for some people. Buying is the best choice for other people. There is no one-size-fits-all answer to the question of whether you should buy or rent. A lot depends on your location and the real estate and rental markets there, your need/desire to be mobile, your tolerance for house/yard work, the degree to which you want to be able to personalize and have control over your space, and so on. There is no right or wrong answer across the board here.

    For us, given our situation, it would be absolutely silly to rent. Renting is generally as much as or more expensive than buying around here, we know that we’ll be here for at least ten more years, I actually enjoy doing stuff around the house and in the yard, I have an aversion to cheap fixtures and boring paint, and when things need to be fixed, I want it done correctly and quickly.

    @infomom, I think we’ve had some of the same landlords. I had one who thought fixing a leaking waste pipe with duct tape was a good solution. Another one tried to convince me the cockroach infestation was “just water bugs — they won’t hurt anything, no need for an exterminator.” Neither of those were in bad neighborhoods. I’ve had three apartments sold out from under me; in one of those, I was forced to move almost immediately, and in the other two, the original (nice) landlords sold to real jerks. My best landlord story is the one in which the landlord’s son took his key to our place, stole a bunch of stuff, tried it again, and then tried to set the place on fire.

24. Posted by *pol - 06/02/2011

    Gail vaz Oxlade has been blogging about this very topic (excellent blog she writes BTW a “MUST READ”). She reminds folks that a mortgage payment is NOT all there is to owning a house! Her calculations are scary, but quite true.

25. Posted by Lee - 06/02/2011

    One of the last blog posts said that something is clutter when it stops meeting your needs. Figure out your needs and choose your housing accordingly. Needs change, so housing may change, too. One choice is not right for all of us and what is right for us now may not be right for us in the future.

26. Posted by lafou - 06/02/2011

    The renters who can pick up the phone and get all their problems solved have great supers/landlords. My experience was different. The apartment building was converted to a co-op. The co-op owners rented to all kinds of characters. Yes, it’s nice not having to worry about the contingency expenses and having fixed bills every month. But it’s easier to block out noise from a rambunctious neighbor if they are not a wall or ceiling away.

27. Posted by daney - 06/02/2011

    I will never rent again. I have my patch of the earth and I love it. I am planted. Watch me bloom.

    It is really freeing to decide for yourself what is important and to have the sense and means to act on it.

28. Posted by Erin Doland - 06/02/2011

    @lafou and others — Renting does not have to be renting an apartment. We have house with a two car garage on an acre+ lot.

29. Posted by Anita - 06/02/2011

    @lafou and others – agreed, bad landlords make renting an ordeal. The key for me is to screen landlords as thoroughly as you screen apartments when you’re looking to rent. If you’re a good judge of character and take time to ask a few extra questions, you’ll get a good idea of what kind of service you’re likely to get.

    Maybe I just got lucky, but I’ve had 2 great landlords in a row – prompt, friendly, competent and very flexible. As long as they were convinced we wouldn’t wreck the place, they were happy to let us paint, put up wall shelves, and basically do anything we wanted as long as we didn’t do structural damage to the apartment.

30. Posted by Laundry Lady - 06/02/2011

    As has been said before, renting is better for some, buying for others. I was taught that a 5 or more years rule of thumb is a good one. If you plan to stay at least 5 years, buying MIGHT be a good option. We plan to stay in our area of the country permanently so we are making a long term investment by buying our house. We also started small. Market fluctuations affect less expensive houses less so than high priced ones. Our previous apartment rent was a little less than our mortgage but the only utilities included were water and trash. Since our house is more natural gas than electric we only spend a little more on utilities now. To afford a rental equivalent to our current house would cost significantly more than our mortgage and in this area house rentals rarely include utilities. There really isn’t a hard and fast rule for renting versus earning. But you have to analyze all the aspects, including financial (real numbers including upkeep and utilities), but also convenience factor. Renting may not be cheaper, but it could be better for your situation. There is also nothing wrong with the desire to own you own home. It is an emotional thing. Just don’t let the emotions cloud the numbers. If it costs more, but you are OK with that because of the emotional benefits, then do it.

31. Posted by Mel - 06/02/2011

    Like many have said, it really is personal preferences as much as dollars and cents. For me, however, I was pushed into the owning camp when my landlord of 18 months (who was an otherwise wonderful woman) decided she wanted to sell the house (a place we loved and fit perfectly into). So I had 2 months notice to pack up and leave. I had a life, a new baby, and a happy existence and it was all turned on its head. After that it was one more temporary rental then we found a place to buy. Also good to remember that rents can be raised. My 30 year fixed loan is not going to change much.

32. Posted by Maureen - 06/02/2011

    We rented apartments for the first 5 years of our marriage. Then we purchased a house, about 20 years ago.I LOVE my house! We raised our family here and hope to live here for another 20 years. We so enjoy the freedom to garden, decorate and renovate as WE want. In about 2 years our mortgage will be paid off and our housing costs will plummet.

33. Posted by Jessica - 06/02/2011

    I guess I am the opposite of most of the people commenting here.

    For me a house is not a financial decision but a life decision. I love my house. It was the one my husband and I bought less than a year after our marriage. It is tiny and cute and I never want to live anywhere else. Both of my children were born here (homebirths) and we are about to put on an addition that will make our tiny house fit our family of four.

    I love that my entire adult history is in this house (bought when I was 24). Although I live in a metropolitan area of New Jersey, a lot of people in my neighborhood feel the same way – my one neighbor is 75 and has lived in her house since she was 10.

    There is no price you can put on having roots and a connection to the place you live. This house is an extension of myself and I love that!

34. Posted by Chaotic - 06/02/2011

    Oh you funny Americans with your 4.5% 30 year fixed loans! In Australia it’s around 7% and you can’t get a fixed term beyond 5 years. (Interest rates went as high as 18%, 20 years ago). And still, home ownership is the main goal of most people here.

    Having read the comments here I can certainly see why renting can be an attractive and financially sensible option.

    The problem in this country is the shortage of decent rental properties, and the high rental prices. So many people are gathering their pennies, looking under the couch cushions, borrowing from family, etc. to get a foothold in the home ownership market and get off the rental treadmill.

35. Posted by tmichelle - 06/02/2011

    We’ve done both and my dream is to buy an inexpensive condo in Florida so that even if we move away we could use it as a vacation home. But, I am THROUGH with large homes!

36. Posted by Will - 06/02/2011

    Comparing the return on a house with the return on the stock market is only viable if you view the house primarily as an investment vehicle. The no-doc no-down mortgage and flipping the house every few years at a substantial profit days are over. You certainly shouldn’t expect your house to make you a fortune.

    If you view the house primarily as a place to live, and particularly with the view of staying for many years, the math changes entirely. If one is reasonably disciplined, puts down 20%, and pays extra every month on the mortgage, the interest on the loan can be significantly reduced. I’m an owner, and I intend to keep it that way.

37. Posted by Kari - 06/02/2011

    We own our house and I love it–I love control over the space, the wall colors, the gardens, etc. But, we realize this fits our life at this time and that, in the future, we will probably return to renting. We spent the first two+ decades of our work life renting; as a two academic family, we moved a fair amount trying to find two jobs in one place. Renting worked for us then and we understand that it may very well work for us again in the future. It shouldn’t be an either-or; so much of this choice has to do with life circumstance, region, and personality.

38. Posted by Nicole - 06/03/2011

    Here in Canada, as in some other countries, there is a third option for many people, a housing co-operative. I have security in knowing that I can live in my co-op as long as I choose for as long as I pay my housing charges and participate in the running of the co-op. In case anyone’s interested, here’s the Canada Housing Federation of Canada’s website: http://www.chfc.ca

    I’ve lived in many rental situations, and I’ve owned two homes in my life. While co-operative housing comes with its own set of interesting issues, it’s a great option.

39. Posted by Brittany - 06/03/2011

    In the United States we are obsessed with houses to the point that it is a status symbol. More and more people are starting to realize that the old way of thinking isn’t necessarily correct anymore but that doesn’t stop everyone else from judging those who choose to rent or live differently. My husband and I are constantly bombarded with questions about why we aren’t going to buy a house anytime soon. In fact, I wrote about this a couple weeks ago, because I needed to rant about it- not everyone has the same “American Dream.”

40. Posted by snosie - 06/03/2011

    For me (25 y.o.) it’s about your retirement. If you don’t own property in your retirement, rent will seriously cut into your living expenses. If you own, not so.

    Now I’m 25 – but I know if I wait, things will be more expensive, I will spend what I like, and save what’s left. A mortgage offers ‘forced’ savings.

    That being said – I am worried about prices falling – but they can’t fall from today til the day I die – so with a long term view it will be ok.

    (I accept I will move, buy and sell, but I’ll start and move from there)

41. Posted by MelD - 06/03/2011

    Once again, please don’t always assume the internet is only about the USA. So many discussions seem to centre around what is right for the USA but there is a world out there and the USA is only a small part of it!!

    This argument entirely depends upon which country you live in. We are in a world of globalisation and what goes for the USA isn’t automatically valid for every place in the world. Not even comparable western countries.

    Renting v buying can have social and historical aspects to it, as well as financial, and it can be a totally cultural thing. And it can change over time. Or it can stay the same. As it happens, the housing market has stayed exceedingly stable in price and value in the country I live in for nearly 40 years, with mortgage rates having gone down from around 7% to around 5.5% in the 90s and then further down to 3% and less later, with only a very slight rise of 0.25% recently. That makes a huge difference in who can afford to buy or not.

    Anyway, just saying. The rest of the world isn’t busting a gut to get into the US housing market!!

42. Posted by tmichelle - 06/03/2011

    At MelD and others who could be thinking Erin was short-sighted,

    I think Erin was just speaking of her own situation in a specific location. She even mentioned that her choice could change if she lived where she grew up. I do not think she was purposely or ignorantly ignoring the global differences.

43. Posted by Erin Doland - 06/03/2011

    @MelD — I don’t assume our website is only read by people in the US, however, in this case I was specifically addressing social pressures we feel here in the states. The “American dream” is a concept created by mortgage lenders to try to encourage people to go into debt and buy a home. One of the largest lenders in the states is even located on “American Dream Way” (that is the street name). Since I have never purchased property in another country, nor lived as an adult in another country (I did as a teenager, but certainly wasn’t thinking about property at the time), I can only authentically write about this issue from a US perspective.

    In my experience, when we tackle US-centric issues on this website, it is nice when people from outside the US share of their personal experiences in the comments. Instead of complaining that this website isn’t specifically written for them, they add to the conversation in a way that is meaningful to everyone who participates in the site. For instance, check out @Nicole’s comment above where she speaks to the Canadian market. I found her information about cooperatives to be very interesting and learned something by reading her insights. I believe this type of positive, authentic sharing helps all of our readers.

44. Posted by Pat - 06/03/2011

    Nice to know we are not alone! After 30 years of paying for a house and now no equity to show, we “dumped” our house, uncluttered our lives and are renting stress free! Now we can afford that vacation instead of a new roof! Yeah, maybe we’ll own a house again some day – when we win the lottery!

45. Posted by Mary in TN - 06/03/2011

    One important thing that I haven’t seen mentioned is this: After you’ve paid that house off, you own a piece of property, and no one can take it from you. After the same number of years paying rent, you have nothing. I’ll be 60 this year and rented until I was able to afford to buy a house last year. My renting experience was quite different from many or you: I never had what I’d call a great landlord. I never lived in a “high rent” place, and maybe that’s where you’ll find the snappy service and quick response. But I lived in modestly priced places in decent neighborhoods, and because landlord response was slow or absent, I learned to do most repairs myself, like it or not (I didn’t). Last year I bought in a very un-fancy neighborhood, but it’s safe, attractive, and the neighbors are terrific. I’m paying extra on a 15-year mortgage and hope to have it paid off by the time I’m 70. By then I’ll probably be ready for a townhouse, condo, or retirement community. But for now, I love it. And like I said, when that day comes I’ll have a piece of property that I can put toward a retirement community buy-in, an option that wouldn’t be possible if I had continued to rent.

46. Posted by Kay - 06/03/2011

    I am renter.

    Here’s the kicker: you have to invest the difference! Make sure you will have saved enough rent money for when you are retired, or unable to earn the money you earn now in your prime.

    You don’t have to convince me because I am a renter. However, my friends’ who purchased houses will have a paid-for property when the mortgage is paid, and ONLY maintenance costs into their aging years. This for most of them will be less than my rent, unless their property taxes are high. I review my situation every few years for this reason. It must be a lucrative decision into my future, and I have to intentionally save for the future I hope will include retirement or reduced workload.

    There are a lot of good reasons to rent. One reason I choose it is because it enables me to live in a neighbourhood I would be unable to buy into (safer, prettier, more convenient area). There are financial calculators online, the New York Times just made one available here,

    http://www.nytimes.com/interac.....lator.html

    It allows you to see if your neighbourhood’s houses are overvalued (vs. renting). That can help with the decision, but you still have to think about the future.

    No decision like this should be looked at for the short term only, unless it is only going to be for the short term. As they say, do the math, but not just today’s math.

    Likewise buying a condo can be more expensive than you think. In some of my city’s neighbourhoods, the maintenance fees are almost as high as my rent. Then you are paying mortgage, utilities, taxes, etc. Now it has become and investment plan, not just a place to live today. Is it the right investment plan for you?

    Hurrah for spreadsheets to help us work out these decisions.

47. Posted by Sascha - 06/03/2011

    Wow. I’m always astonished hearing about places where you can get a nice house in a decent neighbourhood for $100k. I live in Vancouver Canada, and the average cost of a crappy house on a small lot is one million dollars (yes, that’s the same in US dollars – ONE MILLION DOLLARS).

    My husband and I are finally becoming homeowners in our mid-forties, because we inherited a small lot in the city (33′ x 95′) which is worth half a million dollars, and we are taking out a mortgage for another half a million dollars to build a small basic house on it. If it wasn’t for the inheritance of the property, we would never be able to afford to buy anything in this city.

    We each have average-paying jobs and instead of eating out, buying new clothes or going on vacation, we stay home and make mortgage payments. I’m not sure what my point is in regards to the original article, except to say that I guess it’s all relative, and if I could buy a house for $100k, I’d have a LOT of money left over to cover repairs and utilities!

48. Posted by MessyMom - 06/03/2011

    I agree that this is a decision that must be made in light of personal circumstances. We live in an area where mortgages are very reasonable, but I still have known people who chose to rent for various reasons and were very happy with that choice. We are homeowners, but primarily because mortgages are so reasonable. We paid less than $60,000 for a three-bedroom house on one acre of property. Our house payment is only about $10-20 more per month than our rent at our previous residence, which was increasing every year. So for us, it was ridiculous to keep renting, because we are tied to this location for work and family reasons and knew we would be here a long time. We bought this house a few months after we got married, and since then our incomes have risen, so we anticipate being able to pay off this house in the next few years. But that is only possible because we chose a house within our means. Sure, it would be nice to have a house with granite countertops and 4 bathrooms, but I don’t want to spend a lifetime paying for that. I think a lot of the recent housing problems were caused by people biting off more than they could realistically expect to pay for/maintain. So for a lot of people who might have higher expectations for the quality/design of their living spaces, I can see why renting would be the best option.

49. Posted by Christina - 06/04/2011

    My husband and I rent a house, and will probably continue to do so for at least 10 years, after which we’ll re-evaluate if we want to buy depending on life circumstances and the market.

    I can see the benefits of owning, but the negatives outweigh the positives for us at this time. Particularly since he is in the military, and the prospect of having to sell a house on short notice and buy another one in a different province, possibly by myself if they’ve already sent him across the country, sounds like a total nightmare to me.

    If I can help it though, I’m never going back to apartments – I’m so sick of hearing my neighbours! I don’t understand why people buy condos, it just seems like the worst of both the renting and buying worlds to me.

50. Posted by Lou - 06/04/2011

    When we moved from one city to another, my husband (and to a lesser degree my son) wanted what we had in the old city, a house. I said “That’s fine with me – as long as it is clearly understood BEFORE we buy that I cannot & will not take time off from work to wait for repair or service persons. And that I absolutely refuse to do any yardwork whatsoever. Agree to those stipulations & I have no objection. Houses are nice.” We rented a very nice apartment with a terrace.

51. Posted by Fiona - 06/05/2011

    We do both renting and owning (we own a house, but have it rented out to tenants while we rent an apartment for ourselves in another city.)

    I do miss our home badly, and especially the yard for kids. I also dislike the restrictions of rentals and the possibility of being moved on (which happened to us last year.)

    Renting is a sacrifice, but it’s meant we could live in an area we could never afford to buy in. Great facilities, work opportunities, schools and a great lifestyle right on the beach.

    Whatever choice you make, there’s often a trade-off. Hopefully, it is worth it and the right choice for the people concerned.

52. Posted by Kerri - 06/06/2011

    Renting and buying definitely both have perks and downsides. It’s definitely about finding what is right for your family.

    I personally don’t think of my house as an investment in the sense that I hope to make more money that I put into it whenever we decide to sell it. When I put money into repairs or new appliances, etc, I mostly think about whether it will help out my family or not, not whether it will get me more money whenever it goes on the market. If I am able to sell this house for more than I owe on my mortgage, which is actually getting paid down each year, because we made sure to buy a house that was well within our means, or even if we break even, hey, I was able to live in a house that I could do whatever I wanted to it with steady payments (that are barely higher than the rent we were paying for a smaller apartment), and didn’t have to deal with a landlord. I don’t really want to make money on my house. Sure it’d be nice, but it’s a big hassle and a big bit of clutter to me, with lots of risk in a fluctuating economy.

    Now, if my husband got a job where we’d be relocating frequently, we’d DEFINITELY rent. We’ve had lots of friends get stuck with unsold houses when they’ve had to make big moves.

53. Posted by Ish - 06/06/2011

    I just bought a three story cottage after renting a ground floor single story apartment. I love my tiny garden (no “yard” for me!), but I miss the dumpster desperately! Dragging the cans out in heels this morning was not fun or pretty! I am glad I bought a house – I like not having someone over me (or under me) – and few apartments have fireplaces in the burbs. But my sister rents and her townhome and it is gorgeous. If I could have found a three-bedroom townhouse at the right price, I would be renting, but the rent is higher than the mortgage – and I live in SoCal!

54. Posted by Nad - 06/07/2011

    Renting and purchasing both make sense for different objectives and desires. I object however to the premise that b/c home ownership was a comparitively poor investment compared to stock market investing in both 1975 and 2009 that you should base any financial decision on that fact. How about FROM 1975 to 2009? That would be an intersting comparison as It would include both the largest Bull market in stock market history, as well as the housing market boom and bust.

55. Posted by Anne - 06/10/2011

    Erin, I had no idea you were from Topeka! As a recent college graduate living in Lawrence, this post really resonated. When my fiance and I considered moving in together, we were totally set on renting, until we spoke with a family friend who was a realtor and realized that we could own a home for the same amount we would be paying rent…so we did just that! Bought a 1,000 sq ft home for around 120K and are paying less than most of our friends who are renting!

    It was an interesting transition from renting to buying, but since we knew we’d be here a while, we were willing to make that investment. I can see how in other places that wouldn’t quite be feasible!

56. Posted by Steven Eldredge - 06/11/2011

    I live in Manhattan and there is no way I would ever pay the ridiculous prices here to buy an apartment. I have rented the same apartment for 20 years, in a great location. I have a good landlord, a great super, wonderful neighbors, no utilities, I walk to work. As a single person why would I ever want a house to rattle around in alone anyway? Every person/family is different, and I agree with many of the posters here, it is a different fit for different people. I will probably always rent, because I have a horror of the suburbs and will not leave the city for any reason.

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