To buy or keep renting?

posted 3 years ago in Home
Post # 3
Member
6273 posts
Bee Keeper
  • Wedding: October 2013

i know people who are very pro-renting and people who are pro-owning.  i see the pros and cons to both sides.

if you plan to stay at least 7 years in one place (though 10 is better) i have heard it is worth it to buy.

 

Post # 4
Member
1193 posts
Bumble bee

@Daizy914:  also living in an urban area, I say wait to buy. It’s all about location, location, location. If you want your forever home without having to compromise on details, just keep renting and saving. 

I (although I’m sure I’m the minority here) actually hate owning. There is a ton of responsibility, it’s very expensive, and you find yourself putting a lot of time and money back into your place. Only pros are that you can decorate however you want, you don’t have to movement, and hopefully when you sell would ill have gained some equity. 

Post # 5
Member
3222 posts
Sugar bee
  • Wedding: April 2015

@Daizy914:  What about buying a condo instead of a co-op? 

Personally, we’re in a similar stage, also in a city with a high cost of living and astronomical housing prices. If your rent and mortgage would be the same, then it’s even better to purchase what you can now so you can build equity. Then, when you sell, you can roll your mortgage or equity to your more expensive house. 

We’re faced with a similar problem, in that 1 bedroom condos start at $360k where we live, and houses are $700k+. We’re hesitant about entering the market because with 30% downpayment on the $360k condo, our mortgage would be several hundred dollars more than our current rent for a similar unit.

What concerns us most is that our city is experiencing a condo boom, and it’s only a matter of time before the bubble bursts. Since the condo market is so volatile here, we don’t want to buy in, even though building equity in a starter home is a really great way to  get the home you want in steps. If te market is more stable where you live, then buying a starter home is a great idea!

Post # 6
Member
1259 posts
Bumble bee
  • Wedding: March 2014

Owning! It’s a great investment!

Post # 8
Member
9949 posts
Buzzing Beekeeper
  • Wedding: June 2013

@Daizy914:  If your husband hates Staten Island, it is likely he will not agree to live there.  You wouldn’t let him force you to live on Long Island, would you?  So you should not force him to live on Staten Island.  That being said, if you found a co-op you liked and could afford, would it be a place you could see yourself living forever?  That’s what I would wait for.  

 

Post # 9
Member
1259 posts
Bumble bee
  • Wedding: March 2014

@Daizy914:  I would say a house. You get more for your money.

Post # 10
Member
3756 posts
Honey bee
  • Wedding: April 2014

The problem with buying a co-op or condo now, knowing that you want to buy a house not far down the line is that for the first few years of ownership, most of your mortgage payment is going to interest. You don’t build up that much equity that fast. And when you sell, the buying and selling agents commissions come out of the sale so you’re going to lose at least 5-6% right off the bat. You’ll need money for closing costs (yes you can ask the seller to cover these, but you may find that people buying your co-op are asking for the same thing, so no benefit there) and a higher percentage for the down payment (at least 5% if not up to 20%) because you can’t use the first time buyer benefits.

Going through this process myself right now, I’m a firm believer in buying for the long term, not the short. Prices and interest rates are going to start to rise and now is a great time to buy, but you still might not make out very well at the end of the day if you plan to turn around and sell in a few years.

Continue renting and get your finances in order and plan to buy your long term house. I really don’t feel that buying a stepping stone condo/co-op is worth it in the long run.

Post # 11
Member
3222 posts
Sugar bee
  • Wedding: April 2015

@Daizy914:  a condominium apartment goes for the same price as a house? This is surprising to me. I know co-ops are cheaper, but I wouldn’t want to buy in a co-op either since there can be hassles selling later on. 

The market is different where I live. The price of condo apartments do not go up significantly year to year, but condo rowhouses and freestanding homes rise quite a bit. Waiting to buy a house here means that you’ll likely be priced out of the market by the time you have your ducks in a row. Buying a starter home and upgrading every 5-7 years is really common in my city.

Have you talked to a financial planner? We paid to see one (not through a financial services company since they just try to sell you stuff) and have a plan where our porfolio can grow successfully with the money we’ll saving by not owning. In our case, renting makes more financial sense than owning, but that’s because the money we save by renting is invested. Our financial planner set out various charts and tables that explored our options so we could make a decision that’s best for our future.

Buying property is not always an investment, especially in large cities where prices tend to be inflated.

 

Post # 13
Member
9949 posts
Buzzing Beekeeper
  • Wedding: June 2013

@Daizy914:  I’m curious…where do you think you’ll buy a house?  Staten Island is out, Long Island is out, Jersey is out…where are you looking to buy?

Post # 15
Member
7281 posts
Busy Beekeeper
  • Wedding: October 2011 - Bed & Breakfast

Would you be willing to temporarily downgrade your lifestyle for several years in order to accelerate your savings and get into your forever home sooner? Since he wants a started place to get into the ownership game faster and you want a forever place that will delay ownership, accelerating your savings to get to your forever home in the same timeframe that your SO is thinking about buying a starter home may be a compromise.

You have my sympathies. Our 20% plus closing costs meant we brought 6 figures in cash to the closing table. Saving that amount sucked a lot, but it was worth the sacrafices we made along the way to have our forever home at 32.

Post # 16
Member
976 posts
Busy bee
  • Wedding: June 2012

@Daizy914:  How about Queens? Lot’s of nice neighborhoods with houses and you can still take the MTA.

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