(Closed) Rent to Own or Just Rent

posted 5 years ago in Home
Post # 3
Member
1293 posts
Bumble bee
  • Wedding: December 2018

@beetee123:  As a young couple (I am mid twenties, he is late twenties), we already own several properties. I implore you – please, please, please don’t rent. It will not get you ahead! You need to build equity at a young age in order to pay off a mortgage in any reasonable amount of time (I should know – I paid off 2).

I don’t know you, but I will tell you what I tell all our friends – don’t fall into the renting pit that so many people can’t get out of. Yes, the housing market changes. Yes, it could crash. And yes, I still feel it’s better to own something *worthless* than rent something worthless because the market will rise again. It always does!  

I feel very strongly about this and would be happy to give you any advice you need – there are ways to make this work even though that first down payment hurts.

Post # 5
Member
5423 posts
Bee Keeper
  • Wedding: November 2012

@beetee123:  You can still get a mortgage with 3-5% down paymenyt.  When we bought our first home a few months back, Darling Husband was renting and I was not.  We knew we wanted to buy so we went with an FHA mortgage with the minimum down payment.  Renting is not totally necessary if you can avoid it.  You will need to show solid job status.  In 2 years, I left one job for another, that job went under, so I had to start another one.  The bank wanted explanations for it.

I’m a philly bee too, and I dont think I would trust the rent to own places around here. 

Post # 7
Member
13099 posts
Honey Beekeeper
  • Wedding: July 2010

I’ve always heard that rent-to-own is typically not a good deal for the buyer (and there are many ways for you to get screwed).

 

If you have to money for the down payment (and above-market rent) that a rent-to-own would require, I guess I’m confused as to why you couldn’t buy a house with an FHA mortgage.  You can get seller’s assistance on the closing costs too.

Post # 8
Member
5883 posts
Bee Keeper
  • Wedding: October 2010

@beetee123:  I would get the FHA loan before I would do a rent-to-own situation. Can you borrow the closing costs from parents (but tell the bank it’s a “gift”). Maybe look into 80/10/10 loans. 

Post # 9
Member
10367 posts
Sugar Beekeeper
  • Wedding: September 2010

@BoxerLady:  Today’s market is different, but I bet the people who bought in 2008 and are now $200k+ underwater would have a bone to pick with the logic that it is “always” better to own than rent.

OP, I would recommend renting and continuing to save. You’ll have more properties to choose from, and in the end, it will likely save money.

Post # 10
Member
2206 posts
Buzzing bee
  • Wedding: May 2013

if the $5000 for the closing is what is holding you back I would be concerned that you don’t have the money for “normal” maintence – what is going to happen when your pipes are blocked and need $1000 in service, or the boiler goes or a tree falls in the yard and goes through the window or your car ties blows….Unless I had at least 3-6 m of mortgage payments saved up I don’t think that I could comfortably buy.

 

 

 

sounds like a cute little starter apartment is a better option for you guys — just get something small so that you can keep saving. If you can’t manage to put away money while paying the bills then its a good lesson in what you can really afford

 

also I will add that buyer’s market is a midconception — depends on your area – where I am its the hottest market in a long time and there are straight out bidding war/best and only’s etc for open houses etc. If you live anyplace close to a nice desireable location there will be HUGE competition for nice starter homes

 

 

 

 

 

Post # 11
Member
1293 posts
Bumble bee
  • Wedding: December 2018

@crayfish: I bought 2 of my houses in 2008. If you have a full 20 percent down and a  fixed rate mortgage, you would not be 200k in debt. It’s about how you plan and if you know how to navigate the real estate market (at 25, I own 6 properties and have over 200 k in savings alone, so I’d say I do). I stand by what I said – building equity is always better. I will add the disclaimer provided you know what you’re doing or are smart enough to ask for advice. But hey – keep renting. I’d rather others continue to pay off the mortgages I have left.

 

 

 

Post # 13
Member
1293 posts
Bumble bee
  • Wedding: December 2018

@beetee123:  I have convinced my Fiance to go up to 10 properties but that’s where he draws the line, lol (I’m the one who likes playing Monopoly – he’s the one who has to do the renovation/repair work…You can see why we might disagree).

We want one family home for us, one vacation home for us, and then 10 rental properties. I’d love to not work and just live off that income, but I’m too nervous about it. It’s going well right now, but you never know! I have one deal in the works right now ๐Ÿ™‚

Post # 15
Member
2188 posts
Buzzing bee
  • Wedding: March 2024

@BoxerLady: Super awesome that you have accomplished that already! My SO & I are thinking about keeping his house when we buy one together and renting it out so eventually our home is paid off then it’s extra income Laughing

Post # 16
Member
66 posts
Worker bee
  • Wedding: January 2013

@beetee123:  Furnishing a house is expensive.  VERY VERY expensive.  I knew it wasn’t cheap but I was surprised just how much everything costs, so that is definitely something to consider before buying OR renting.  We are buying all new furniture because ours was ruined by the hurricane.  For a decent sectional, queen sized bedroom set, and dining room table we are already over $8,000.  

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