Rent or Buy?

posted 3 years ago in 30 Something
Post # 2
Member
5199 posts
Bee Keeper
  • Wedding: April 2013

It’s all about running the numbers.  There are lots of articles online that can help you work through the steps of determining the real cost of ownership/rental.  The “right” answer depends on where you live and what you are looking for. 

There are lots of articles online, but here is one to get you started: http://www.getrichslowly.org/blog/2007/07/16/renting-vs-buying-the-realities-of-home-buying/

I pesonally have chosen to rent.  In the city where I live rent is a great deal compared to overblown housing and condo prices.  Plus, I plan to move several times over the next few years, making real estate even more expensive and impractical for me.  I’m also willing to sacrafice on having the newest/fanciest appartment in order to save money.  This has been a great financial choice to me, and I divert the savings to other investments.

Post # 3
Member
2428 posts
Buzzing bee
  • Wedding: May 2014

Renting will save you a lot of stress right now. My husband and I started the home buying process about 8 or 9 months before our wedding and really thought we could complete eeeeeverything (find a place, make offer, move in, blabla) before then. We eventually wised up and shelved it for another year. It was too much on our plates.

I don’t think you are throwing money away if it’s only for a year or so. Plus, this will be the first time you guys will be living together so you’ll be learning a lot about what you want in a place together. Nothing wrong with that at all!

Post # 4
Member
2421 posts
Buzzing bee
  • Wedding: February 2015

We go back and forth on this.  We live in a rental apartment (1 bedroom, 890 sq ft + balcony).  The rent is cheap, its a quiet, very well maintained building, in a nice part of the city, less than 10mins to my work by car and about 40 to his.  

Sounds great right?  Well, there’s no storage.  I lived here alone before he moved in, so it’s all my stuff, his stuff has no where to go, we have no control over what appliances we have – the stove works, but its 30 years old and I’d like a newer one, the fridge is apartment size and too small, IMO.  There’s no dishwasher, the rental agreement forbids them, the laundry is down stairs not ensuite, and the most annoying of all – the shower head was recently swapped out by management (you nee a special key to get it off) and its set at 5’10.  We are both 6’1.  So everyday to wash my hair I have to do a half squat.  It sounds like such a small thing, but it’s Every. Single. Day.  It makes me irrationally angry at 5:30am. However, there is zero maintenance to be done by us, we lock up and leave anytime we want to go away, no one needs to check in on it.  Rental insurance is cheap, the hydro is cheap, etc. 

All that said, to buy in this area is 900k, to start (detached).  If we have zero debt (we have car loans) we can technically qualify for a mortgage of 980k (at 2.2% interest, because I qualify for a special deal.)  But that’s insane, IMO.  And I don’t want to be house poor.  The highest mortgage I’m willing take on is 500k.  And for a detached home it means we’re looking at a 45-60 minute commute to work (which I’m ok with.)  We’ll make payments like we’re at a 5% interest rate, because really the rates aren’t going to stay this low forever, after the first 5 year term we’re likely to be looking at that kind of a rate.  So we might as well get used to living off it now and toss the extra onto our mortgage in lump sum payments. And then you have to budget for routine maintenance, extra wear and tear on our cars, special purchases (like a new fence, etc.), emergency funds… our fun money dwindles quickly once you add it all up.  It makes living in the apartment for a while longer look a lot more appealing. (And it means we’ll have a bigger down payment.) 

We are still on the fence about doing this before the wedding or after (it’s 8 months away.)  Sometimes I think its too much at once, and then I take a shower.  And I’m ranting like a nutcase about buying a house.  

 

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