Home ownership: why?
March 16, 2015 8:50 AM Subscribe
as I approach my 35th year, I'm feeling more and more down about not owning my own home. However, I know there are some rational reasons why I don't. Or are they rational? Why did you, Metafilter homeowner, purchase your home?
Reasons why home ownership does not make sense for me right now:
I am single with no children (but two cats).
My employment contract runs out in 2.5 years with no certainty of renewal.
My professional field is one in which the need to relocate for a job is pretty likely.
I know all of these things suggest against buying a home, but I feel like I'm behind in life because I'm still renting. There are also the financial considerations; I don't like throwing rent money into something that I don't own and can never sell for(hopefully for a profit). But of course, buying a home is expensive, plus purchasing appliances, etc. So, I'm really torn about the whole idea. Help?
Reasons why home ownership does not make sense for me right now:
I am single with no children (but two cats).
My employment contract runs out in 2.5 years with no certainty of renewal.
My professional field is one in which the need to relocate for a job is pretty likely.
I know all of these things suggest against buying a home, but I feel like I'm behind in life because I'm still renting. There are also the financial considerations; I don't like throwing rent money into something that I don't own and can never sell for(hopefully for a profit). But of course, buying a home is expensive, plus purchasing appliances, etc. So, I'm really torn about the whole idea. Help?
Rent is not "throwing money away" - rent is providing you a roof over your head. You ARE getting something in exchange.
That is my least favorite "excuse" for buying a house.
posted by Ms Vegetable at 8:53 AM on March 16, 2015 [43 favorites]
That is my least favorite "excuse" for buying a house.
posted by Ms Vegetable at 8:53 AM on March 16, 2015 [43 favorites]
For me, the central reason has always been to control my immediate environment--especially esthetically. If I own the place, and see something I don't like the looks of, I just reach for the hammer and saw and drill, or call my favorite handyman.
posted by fivesavagepalms at 8:54 AM on March 16, 2015 [13 favorites]
posted by fivesavagepalms at 8:54 AM on March 16, 2015 [13 favorites]
Did these same reasons apply last year or two years ago? Sometimes it's easy to get caught up in the possibilities of instability without the actuality of it.
posted by smackfu at 8:55 AM on March 16, 2015 [2 favorites]
posted by smackfu at 8:55 AM on March 16, 2015 [2 favorites]
I'd say don't feel guilty for not having a home, and don't let peer pressure or societal expectations push you into one.
In the last three years I had a sidewalk replaced, wooden steps replaced with concrete, and a patio poured. Had a non-functional wood burning fireplace replaced with a functional gas one (this was to remediate cold air infiltration). Am in need of a total bath remod because of a plumbing issue. And built a video/audio recording studio.
Cheaper it's not. I didn't even note the numerous minor electrical and plumbing issues.
posted by cjorgensen at 8:55 AM on March 16, 2015 [2 favorites]
In the last three years I had a sidewalk replaced, wooden steps replaced with concrete, and a patio poured. Had a non-functional wood burning fireplace replaced with a functional gas one (this was to remediate cold air infiltration). Am in need of a total bath remod because of a plumbing issue. And built a video/audio recording studio.
Cheaper it's not. I didn't even note the numerous minor electrical and plumbing issues.
posted by cjorgensen at 8:55 AM on March 16, 2015 [2 favorites]
I'm in the process of buying a house right now, and for me, it came down to me not being able to tolerate landlords/management companies any longer. No one gets to tell me what to do except for them, and I'm tired of that.
Also, I got to the point where my rent far exceeds my monthly house costs.
However, I'd say that if you're as torn as you are, with such valid reasons, keep renting. It's a roof over your head, and it's a smaller mental burden; if the only reason you feel like you should buy a house is because you're not keeping up...that's a bad reason.
posted by punchtothehead at 8:58 AM on March 16, 2015 [9 favorites]
Also, I got to the point where my rent far exceeds my monthly house costs.
However, I'd say that if you're as torn as you are, with such valid reasons, keep renting. It's a roof over your head, and it's a smaller mental burden; if the only reason you feel like you should buy a house is because you're not keeping up...that's a bad reason.
posted by punchtothehead at 8:58 AM on March 16, 2015 [9 favorites]
I have owned two homes in my life. I sold both at a "profit" after 4 years and 20 years respectively. If you take into consideration property taxes and maintenance, I would have been just as well off renting. There are tax breaks to owning, but for me, at this point in my life, renting gives me the flexibility and the consistent monthly expense I need. I've been saving the difference between my rent and mortgage payment and property tax for the last 14 years and now have enough money saved that I could pay cash for a house in my neighborhood, but the property taxes would be as much as my rent is currently. For me, in my market, renting makes sense. YMMV.
posted by Floydd at 9:00 AM on March 16, 2015 [3 favorites]
posted by Floydd at 9:00 AM on March 16, 2015 [3 favorites]
There are actually really clear calculations about the value of renting versus owning a home. It might help to look up one of those calculators (here's a Canadian one) and determine if you're even losing money on this one. Keep in mind that when you own your home, you have to care for it, pay taxes on it, insure it (and not just your stuff), etc, etc. It can be a great deal more expensive than renting, and only a small part of that money is actually buying you equity in your home.
posted by jacquilynne at 9:06 AM on March 16, 2015 [4 favorites]
posted by jacquilynne at 9:06 AM on March 16, 2015 [4 favorites]
Oh, and we own because we like having a yard our dog can destroy and we can change and plant and replant and unplant and do whatever we want to. For instance, MORE DAFFODILS ARE ALWAYS BETTER. And we couldn't necessarily do that in a rental.
posted by Ms Vegetable at 9:07 AM on March 16, 2015 [5 favorites]
posted by Ms Vegetable at 9:07 AM on March 16, 2015 [5 favorites]
Sounds to me like you have a lot of good reasons not to own, while the plus column is solely the financial consideration. So consider that, because it sounds like you assume profit is inevitable, but what if it weren't? Consider the many risks of home- and mortgage-ownership, particularly in our historically unique ultra-low interest rate era. What if you were underwater on your mortgage, couldn't afford to get out of it, had to move for work, and were unable to sell due to cyclical downturn in the market? Are you prepared to be a landlord for your own property while you're somewhere across the country, potentially having to rent again yourself due to being unable to liquidate the funds sunk in your prior property, a property which you can no longer make use of due to your job having to move?
posted by kaspen at 9:15 AM on March 16, 2015 [2 favorites]
posted by kaspen at 9:15 AM on March 16, 2015 [2 favorites]
We are in the process of buying our first home. Here's some of the things that went into our decision:
* Life stage. We are coming into our 50s and want to have certainty about where we are going to live for our eventual retirement.
* Life stability. We know we are going to stay in this city and we foresee there will be jobs in our field for the foreseeable future.
* Wanting to have control over our environment - we want to be able to paint or drill holes or replace the floor or plant anything we want.
* Financial. With a fixed rate mortgage we know what our house payment will be every month for the next 30 years. Also, we can pull together enough money to make the down payment.
* The market is rising rapidly in our region. If we wait longer we might not be able to buy a house in a desirable neighborhood for us.
* Emotional maturity. My partner and I are in a good place with our communication about serious life issues and about money, and we are able to take this on and still have a strong relationship.
* Emotional security. My partner and I did a lot of talking and we agreed that this is a thing that would make us feel good and safe at this point in our life.
At your age, with your degree of singleness and job uncertainty, there's nothing wrong with continuing to rent. I would have done the same at 35.
posted by matildaben at 9:16 AM on March 16, 2015 [7 favorites]
* Life stage. We are coming into our 50s and want to have certainty about where we are going to live for our eventual retirement.
* Life stability. We know we are going to stay in this city and we foresee there will be jobs in our field for the foreseeable future.
* Wanting to have control over our environment - we want to be able to paint or drill holes or replace the floor or plant anything we want.
* Financial. With a fixed rate mortgage we know what our house payment will be every month for the next 30 years. Also, we can pull together enough money to make the down payment.
* The market is rising rapidly in our region. If we wait longer we might not be able to buy a house in a desirable neighborhood for us.
* Emotional maturity. My partner and I are in a good place with our communication about serious life issues and about money, and we are able to take this on and still have a strong relationship.
* Emotional security. My partner and I did a lot of talking and we agreed that this is a thing that would make us feel good and safe at this point in our life.
At your age, with your degree of singleness and job uncertainty, there's nothing wrong with continuing to rent. I would have done the same at 35.
posted by matildaben at 9:16 AM on March 16, 2015 [7 favorites]
I bought my first house later in life than where you are now. I like to live relatively close to work and where I would be working in a year was not clear for most of my life. Selling a house can be a big time consuming pain and I have more money than time so I chose to rent and stay flexible. Not having to worry about repairs or yardwork was great.
I finally bought for a number of reasons - I've shifted to mostly telecommuting, the area near my office for when I do go in had no good rental options but several excellent houses for sale when I needed to move, my employer offered an incentive that subsidizes buying but not renting, the current interest rates are very low, and I have a roommate whose monthly rent effectively pays off a month's worth of principle so I'm able to pay that down quickly. I also live in one of the areas where renting is actually significantly higher than buying - renting my property would be ~150% as expensive as owning it. Without those reasons, I'd have been happy to keep renting. There's nothing wrong with either path, just chose one for the correct reason rather than peer or societal pressure.
posted by Candleman at 9:18 AM on March 16, 2015 [1 favorite]
I finally bought for a number of reasons - I've shifted to mostly telecommuting, the area near my office for when I do go in had no good rental options but several excellent houses for sale when I needed to move, my employer offered an incentive that subsidizes buying but not renting, the current interest rates are very low, and I have a roommate whose monthly rent effectively pays off a month's worth of principle so I'm able to pay that down quickly. I also live in one of the areas where renting is actually significantly higher than buying - renting my property would be ~150% as expensive as owning it. Without those reasons, I'd have been happy to keep renting. There's nothing wrong with either path, just chose one for the correct reason rather than peer or societal pressure.
posted by Candleman at 9:18 AM on March 16, 2015 [1 favorite]
I bought a house because I always wanted a house because no one in my family had ever owned a house and suddenly I woke up one day and realized I could afford one so I just paid asking price for the first house I found. (It goes without saying that this isn't a good idea, but I'm a blithering idiot who didn't know what she was doing.) Not having to deal with slumlords or awful in-building neighbors is the best part of owning, bar none, and that's what I will miss the most when I go back to renting. Not if, when!
I don't like throwing rent money into something that I don't own and can never sell for(hopefully for a profit).
Something I wish someone had drilled into my head before I bought a house: There is no kind of guarantee whatsoever that your chosen piece of real estate will hold its value for any length of time, let alone increase in value enough for you to be able to walk away with a post-sale profit. F'rex, my house was bought in 2010 for $140k, I still owe $120k, and the house is currently worth... $75k. Bonus: Our neighbors two doors down were just foreclosed on last week, and their house is now up for sale for... $40k -- yeah, that's forty, as in 20 x 2. So I'll be very lucky if I can ever manage to get rid of my house without going into foreclosure or short sale (or being forced into an involuntary landlord situation :shiver:), because home values in my neighborhood are through the floor. Until then, I'm stuck in every sense of the word.
So: Buy a house if you're getting married and having kids and/or if you're planning on staying in the same place for the rest of your life. Otherwise, the hassles of having to do or hire someone to do all of your daily/weekly/monthly/annual maintenance, particularly as accompanied by the distinct possibility of losing your ass in a market downturn (or because your neighbor was foreclosed on right before you put your house up for sale), just won't be worth it. Also worth noting is the fact that we do not live in a city with any kind of solid or valuable real estate market, so if you were specifically looking to buy here, I would just say... Don't! Enjoy your freedom!
posted by divined by radio at 9:18 AM on March 16, 2015 [7 favorites]
I don't like throwing rent money into something that I don't own and can never sell for(hopefully for a profit).
Something I wish someone had drilled into my head before I bought a house: There is no kind of guarantee whatsoever that your chosen piece of real estate will hold its value for any length of time, let alone increase in value enough for you to be able to walk away with a post-sale profit. F'rex, my house was bought in 2010 for $140k, I still owe $120k, and the house is currently worth... $75k. Bonus: Our neighbors two doors down were just foreclosed on last week, and their house is now up for sale for... $40k -- yeah, that's forty, as in 20 x 2. So I'll be very lucky if I can ever manage to get rid of my house without going into foreclosure or short sale (or being forced into an involuntary landlord situation :shiver:), because home values in my neighborhood are through the floor. Until then, I'm stuck in every sense of the word.
So: Buy a house if you're getting married and having kids and/or if you're planning on staying in the same place for the rest of your life. Otherwise, the hassles of having to do or hire someone to do all of your daily/weekly/monthly/annual maintenance, particularly as accompanied by the distinct possibility of losing your ass in a market downturn (or because your neighbor was foreclosed on right before you put your house up for sale), just won't be worth it. Also worth noting is the fact that we do not live in a city with any kind of solid or valuable real estate market, so if you were specifically looking to buy here, I would just say... Don't! Enjoy your freedom!
posted by divined by radio at 9:18 AM on March 16, 2015 [7 favorites]
I've owned one home in my life, and currently rent. Like punchtothehead, when I bought that house I was sick of renting from other people, I didn't want to live in an apartment or duplex any more, and (decent, affordable) rental houses are somewhat hard to come by where I live. After 6 years in the house, my ex and I broke up, I ended up walking away and my ex refinanced the house in his own name. We were underwater and there was no equity so it was like I had rented all those years after all. At least I got away without any debt.
Nowadays I'm married, having a kid in a few months, and terrified of getting stuck in another bad house so who knows when we'll buy again. We plan to rent for the foreseeable future.
posted by cabingirl at 9:22 AM on March 16, 2015 [2 favorites]
Nowadays I'm married, having a kid in a few months, and terrified of getting stuck in another bad house so who knows when we'll buy again. We plan to rent for the foreseeable future.
posted by cabingirl at 9:22 AM on March 16, 2015 [2 favorites]
I bought a house because:
1) In my area, it's slightly cheaper to own a house than to rent, even after property taxes & utilities.
2) I have a few books, and they require more space than is available in the average, or even non-average, rental.
3) Property values in the area have been steady (we didn't have a bubble, so nothing...popped).
4) Freedom to do whatever I feel like with the property.
posted by thomas j wise at 9:23 AM on March 16, 2015 [1 favorite]
1) In my area, it's slightly cheaper to own a house than to rent, even after property taxes & utilities.
2) I have a few books, and they require more space than is available in the average, or even non-average, rental.
3) Property values in the area have been steady (we didn't have a bubble, so nothing...popped).
4) Freedom to do whatever I feel like with the property.
posted by thomas j wise at 9:23 AM on March 16, 2015 [1 favorite]
I am a happy renter and have saved enough to be able to pay cash for a home if I wanted to. In addition to the factors others have mentioned, a consideration for me is that most houses on the market would be bigger than I need as a single person. I would be buying, heating, and maintaining extra space that I don't need. My apartment is just the size I need.
posted by jkent at 9:29 AM on March 16, 2015
posted by jkent at 9:29 AM on March 16, 2015
I think the biggest pluses to owning are all about control; being allowed to paint whatever you want, remodel whatever you want, plant whatever you want, landscape whatever you want, etc. without landlord permission (as long as you're not in some soulless place with a neighborhood association that controls things like that.) Similarly, if you own a home you don't have to worry about your rent getting jacked up year after year or getting kicked out of a place you're happy in if the owner decides to sell.
The biggest minuses of owning a property are all about maintenance and upkeep; when you're renting you may have some headaches when an appliance dies or something springs a leak, but you're not on the hook for the cost of repairing/replacing stuff. As a homeowner it's all on you, and that includes the labor unless you can afford to hire landscapers/contractors/etc.
I grew up with those same cultural cues that buying a house was part of being a Real Grown Up and Living The American Dream™... but these days I think that's pretty much a bullshit leftover of the days when more people could get a full time job with a company that treated them like a human being, paid a living wage with benefits, and kept them around long enough to retire with an honest to goodness pension. If you think you might like to buy a house someday, maybe start saving for an eventual down payment, but if renting works for you right now then don't sweat it.
posted by usonian at 9:37 AM on March 16, 2015 [4 favorites]
The biggest minuses of owning a property are all about maintenance and upkeep; when you're renting you may have some headaches when an appliance dies or something springs a leak, but you're not on the hook for the cost of repairing/replacing stuff. As a homeowner it's all on you, and that includes the labor unless you can afford to hire landscapers/contractors/etc.
I grew up with those same cultural cues that buying a house was part of being a Real Grown Up and Living The American Dream™... but these days I think that's pretty much a bullshit leftover of the days when more people could get a full time job with a company that treated them like a human being, paid a living wage with benefits, and kept them around long enough to retire with an honest to goodness pension. If you think you might like to buy a house someday, maybe start saving for an eventual down payment, but if renting works for you right now then don't sweat it.
posted by usonian at 9:37 AM on March 16, 2015 [4 favorites]
Homeowner in the Bay Area here.
Traits of home-ownership:
I'm making peace with pit house. It makes Mrs. Straw happy. If you have the discipline to save and don't get sucked up into home improvement projects, rent. If you want to get into real estate as a speculative financial vehicle, you can do that, but... A house can be an investment, a home is an expense.
posted by straw at 9:38 AM on March 16, 2015 [2 favorites]
Traits of home-ownership:
- stability of costs
- As the local housing market rises and falls over the years, your cost of ownership will remain relatively stable. Of course what this also means is that you don't get to move based on loca economic changes. Local economy tanks? Welcome to the short-sale. Built up equity? Good-bye nest egg.
- customize the house
- You can convince yourself that it's worth it to spend astounding amounts of money on stupid tweaks to the house that'll never ever pay back. You know all of that stuff about how the house is a savings vehicle? You can blow that out with landscaping or painting right fast. Granite counters in the kitchen? Yeah, might give 50% of their cost back in value, unless you choose something that goes out of style before you sell.
- house is a savings vehicle
- The house itself is a depreciating asset, the land it's on will fluctuate wildly, but overall it's a way to force yourself to put some money away each month. If you have the discipline, you could put that money in something that'll likely earn you more interest.
- you can save money by doing it yourself!
- The rental management company pays actual professionals to fix properties, you don't have to worry about things like living wages, workman's comp insurance, and the like, you can spend your weekends scooting around the crawlspace covered with spiderwebs on your own, because, you know, specialization is for insects and surely there's nothing to manual labor jobs, right?
I'm making peace with pit house. It makes Mrs. Straw happy. If you have the discipline to save and don't get sucked up into home improvement projects, rent. If you want to get into real estate as a speculative financial vehicle, you can do that, but... A house can be an investment, a home is an expense.
posted by straw at 9:38 AM on March 16, 2015 [2 favorites]
I am a real estate investor. I currently own 30 homes. I have bought and sold homes in multiple states, and I have been involved in several unusual deals.
That said, homeownership is not the right thing for everyone - and you should not feel bad about not buying real estate.
One thing that is important to recognize (and some of the above posts demonstrate this) - the vast majority of people purchase a home for emotional and social reasons. People buy houses to keep up with the neighbors. They buy a house for their kids. Personally, having been involved as the buyer or seller on many deals, I think the vast majority of people are buying real estate for all the wrong reasons. You want to help your kids, invest your money wisely. Buying real estate based on emotion is the worst way to approach the largest investment you will make in your lifetime.
Don't get me wrong, investing in real estate can be a fantastic way to invest your money. But investing in real estate is a self-directed investment. It is a hands on type investment.
If you want to justify (or not justify) the purchase of any real estate, the best way to do that is as a financial investment. For many people, renting a place to live, and investing their money elsewhere, is the smarter move. Focus on the numbers, and not on the view of the backyard out the bay window, and I guarantee you will find the real justifications to either invest or not.
posted by Flood at 9:38 AM on March 16, 2015 [7 favorites]
That said, homeownership is not the right thing for everyone - and you should not feel bad about not buying real estate.
One thing that is important to recognize (and some of the above posts demonstrate this) - the vast majority of people purchase a home for emotional and social reasons. People buy houses to keep up with the neighbors. They buy a house for their kids. Personally, having been involved as the buyer or seller on many deals, I think the vast majority of people are buying real estate for all the wrong reasons. You want to help your kids, invest your money wisely. Buying real estate based on emotion is the worst way to approach the largest investment you will make in your lifetime.
Don't get me wrong, investing in real estate can be a fantastic way to invest your money. But investing in real estate is a self-directed investment. It is a hands on type investment.
If you want to justify (or not justify) the purchase of any real estate, the best way to do that is as a financial investment. For many people, renting a place to live, and investing their money elsewhere, is the smarter move. Focus on the numbers, and not on the view of the backyard out the bay window, and I guarantee you will find the real justifications to either invest or not.
posted by Flood at 9:38 AM on March 16, 2015 [7 favorites]
I feel like I'm behind in life because I'm still renting...
I am single with no children (but two cats)...
One of the reasons I bought my house was because I was not going to wait until I got married to have the life I wanted. When a house became available that was in the neighborhood I wanted, that had the amenities I wanted, that was affordable for me based on the numbers, I bought it.
But for every person who looks at me with added respect when I say I own my home, there are two or three people who curl their nose at my house, point out little things that need fixing, denigrate the neighborhood, predict terrible things for the local real estate market, go on and on about how they could never deal with some aspect of my house that I either can't change or don't want to change or both. If I let them get to me, I'd feel just as "behind in life" as a homeowner as I did as a renter.
posted by Bentobox Humperdinck at 9:42 AM on March 16, 2015 [13 favorites]
I am single with no children (but two cats)...
One of the reasons I bought my house was because I was not going to wait until I got married to have the life I wanted. When a house became available that was in the neighborhood I wanted, that had the amenities I wanted, that was affordable for me based on the numbers, I bought it.
But for every person who looks at me with added respect when I say I own my home, there are two or three people who curl their nose at my house, point out little things that need fixing, denigrate the neighborhood, predict terrible things for the local real estate market, go on and on about how they could never deal with some aspect of my house that I either can't change or don't want to change or both. If I let them get to me, I'd feel just as "behind in life" as a homeowner as I did as a renter.
posted by Bentobox Humperdinck at 9:42 AM on March 16, 2015 [13 favorites]
I bought my first house when I realized my mortgage would be lower than my rent and the tax deduction would be nice.
posted by cecic at 9:42 AM on March 16, 2015 [3 favorites]
posted by cecic at 9:42 AM on March 16, 2015 [3 favorites]
We bought our house because
1) We had three pets and it was difficult to find any place that would rent to us, even with a pet fee
2) The LCOL area meant that owning a home was quite a bit cheaper than renting a comparable home by a few hundred dollars.
3) we knew we were going to be here at least 5 years
4) it's nice to be able to paint walls or change things when we want.
There is very little chance we'll make a profit on this house, and the very real possibility that we might break even or even owe a little bit if we have to pay closing costs for a seller. The house itself was under 95k, so if we do owe it won't be crazy, and I'll consider it worthwhile for having used the house over the years. Upkeep for us has been minimal over the past 8 years. In your case, with the details given, I wouldn't worry about a purchase at all.
posted by bizzyb at 9:44 AM on March 16, 2015
1) We had three pets and it was difficult to find any place that would rent to us, even with a pet fee
2) The LCOL area meant that owning a home was quite a bit cheaper than renting a comparable home by a few hundred dollars.
3) we knew we were going to be here at least 5 years
4) it's nice to be able to paint walls or change things when we want.
There is very little chance we'll make a profit on this house, and the very real possibility that we might break even or even owe a little bit if we have to pay closing costs for a seller. The house itself was under 95k, so if we do owe it won't be crazy, and I'll consider it worthwhile for having used the house over the years. Upkeep for us has been minimal over the past 8 years. In your case, with the details given, I wouldn't worry about a purchase at all.
posted by bizzyb at 9:44 AM on March 16, 2015
To me, the main advantage of owning a home is retirement planning. I do not want to be paying a mortgage out of my retirement income, so even though we bought in our later 30s, our mortgage term will wrap up when we hit 65.
You're looking at a decades long commitment. At 30+, you absolutely positively need to make decisions about home ownership in conjunction with retirement planning. This is not a decision you should make on the basis of emotion; it's a decision you should make on the basis of sound fiscal planning.
posted by DarlingBri at 9:50 AM on March 16, 2015 [3 favorites]
You're looking at a decades long commitment. At 30+, you absolutely positively need to make decisions about home ownership in conjunction with retirement planning. This is not a decision you should make on the basis of emotion; it's a decision you should make on the basis of sound fiscal planning.
posted by DarlingBri at 9:50 AM on March 16, 2015 [3 favorites]
We bought because (a) we knew we were going to be in the same place for many years, and (b) the rental market in our area is extremely poor and wouldn't allow us to live in the kind of place we wanted. I love our house and its location, but there are constant headaches and worries, and we locked up a whole lot of money in this house. I've been surprised by just how much labor it takes to just keep things passably okay; just to stave off entropy and weeds really eats up a good deal of time.
I've also discovered that I don't take advantage of a lot of the customization freedom we now have - the ability to e.g. put in new countertops or paint or whatever. It's fine as it is, and I devote my attention to other things. So definitely assess realistically your own orientation on that decorating/house customization issue.
Pros of renting:
-Flexibility to move if you want/need to, whether moving cities or just moving apartments if you have a noisy neighbor or want to shorten your commute, or you suddenly need a place with no stairs or an extra bedroom, etc.
-Household maintenance things are not your problem - landlord can deal with the expense of repairs, headaches of hiring/supervising contractors, etc. You might think of this being just stuff like leaky sinks, but it includes huge stuff like foundation work, replacing the roof, if a tree falls on a neighbor's car, if water damage causes mold, or necessitates ripping up the floor/etc and replacing,.... repairs can very quickly run to tens of thousands of dollars. And depending what kind of person you are, you may not have the stomach for dealing with contractors etc.
-And in general, free time! Some people love to spend time working on their house or their yard, but I think sometimes there's an assumption that everyone is like that -- and that's not true. If you've got a full life already and your time is spoken for by hobbies etc, a house will mean a whole new area of life that makes demands on your time - the weekend house project list is ever present. (a.k.a.: I want to sit with a cup of coffee and read the news, but I really should get up and deal with that sticky window sash or get the last few bags of mulch down.)
-Falling property values in your area are not your problem - you can't be financially destroyed by your apartment depreciating.
-You don't need to worry about who will rent the apartment after you, whereas homeowners need to worry about how they'll eventually be able to sell the place - depending on your frame of mind, you might make renovation decisions with an eye to a hypothetical buyer rather than just your own preferences. Plus, the school district matters and all that stuff, even if you don't care about it.
posted by LobsterMitten at 9:52 AM on March 16, 2015 [2 favorites]
I've also discovered that I don't take advantage of a lot of the customization freedom we now have - the ability to e.g. put in new countertops or paint or whatever. It's fine as it is, and I devote my attention to other things. So definitely assess realistically your own orientation on that decorating/house customization issue.
Pros of renting:
-Flexibility to move if you want/need to, whether moving cities or just moving apartments if you have a noisy neighbor or want to shorten your commute, or you suddenly need a place with no stairs or an extra bedroom, etc.
-Household maintenance things are not your problem - landlord can deal with the expense of repairs, headaches of hiring/supervising contractors, etc. You might think of this being just stuff like leaky sinks, but it includes huge stuff like foundation work, replacing the roof, if a tree falls on a neighbor's car, if water damage causes mold, or necessitates ripping up the floor/etc and replacing,.... repairs can very quickly run to tens of thousands of dollars. And depending what kind of person you are, you may not have the stomach for dealing with contractors etc.
-And in general, free time! Some people love to spend time working on their house or their yard, but I think sometimes there's an assumption that everyone is like that -- and that's not true. If you've got a full life already and your time is spoken for by hobbies etc, a house will mean a whole new area of life that makes demands on your time - the weekend house project list is ever present. (a.k.a.: I want to sit with a cup of coffee and read the news, but I really should get up and deal with that sticky window sash or get the last few bags of mulch down.)
-Falling property values in your area are not your problem - you can't be financially destroyed by your apartment depreciating.
-You don't need to worry about who will rent the apartment after you, whereas homeowners need to worry about how they'll eventually be able to sell the place - depending on your frame of mind, you might make renovation decisions with an eye to a hypothetical buyer rather than just your own preferences. Plus, the school district matters and all that stuff, even if you don't care about it.
posted by LobsterMitten at 9:52 AM on March 16, 2015 [2 favorites]
The primary reasons I own my own home are:
- My partner has a recording studio in our basement and you just flat out cannot do the kind of customization you need to in a rental, for a good recording studio once you are past a certain level
- I really like having full control to customize my space, rip up and redo the garden any way I want, have any appliances I want, call the contractor I like best, etc.
There's some other stuff that is nice that one could get just as easily by renting a house vs. an apartment (primarily having separation from neighbors and not dealing with the pain of finding a good rental with multiple cats), the above two are the only ones that really just can't be gotten as a renter.
Nine years into homeownership, as I slowly bleed money from all the things that need fixed or replaced, I've come to believe that the full-control-over-space issue is sort of a toss-up. It is really truly great, but it is also expensive as hell and I don't think it makes buying vs. renting a slam-dunk. If you are like me and having control over your space is really super important for your mental health it is worth it, but if you don't care all that much about the ability to rip up rosebushes or get a new refrigerator or whatever, then you might get better value from saving the money you'd have spent on home repairs, and going on great trips or buying an awesome guitar or something else.
I like homeownership. I do not necessarily recommend it as the One True Way To Be A Grown-up. Unless you want a kick-ass recording studio.
posted by Stacey at 9:53 AM on March 16, 2015 [3 favorites]
- My partner has a recording studio in our basement and you just flat out cannot do the kind of customization you need to in a rental, for a good recording studio once you are past a certain level
- I really like having full control to customize my space, rip up and redo the garden any way I want, have any appliances I want, call the contractor I like best, etc.
There's some other stuff that is nice that one could get just as easily by renting a house vs. an apartment (primarily having separation from neighbors and not dealing with the pain of finding a good rental with multiple cats), the above two are the only ones that really just can't be gotten as a renter.
Nine years into homeownership, as I slowly bleed money from all the things that need fixed or replaced, I've come to believe that the full-control-over-space issue is sort of a toss-up. It is really truly great, but it is also expensive as hell and I don't think it makes buying vs. renting a slam-dunk. If you are like me and having control over your space is really super important for your mental health it is worth it, but if you don't care all that much about the ability to rip up rosebushes or get a new refrigerator or whatever, then you might get better value from saving the money you'd have spent on home repairs, and going on great trips or buying an awesome guitar or something else.
I like homeownership. I do not necessarily recommend it as the One True Way To Be A Grown-up. Unless you want a kick-ass recording studio.
posted by Stacey at 9:53 AM on March 16, 2015 [3 favorites]
In order of most to least important reasons, I bought a home because:
- I intend to live in my city forever and I intend to live in this house at least 10 years if not forever.
- Our mortgage + insurance + property tax is less for our 3/2 home with a pool in a nice neighborhood than we were paying in rent on a crappy 2/2 townhouse in a bad neighborhood. The same is not true if you add in maintenance costs, but the tradeoff is still well worth it to us.
- I consider it part of my retirement savings, since the home will be paid off by the time my husband and I are ready to retire, which will greatly reduce our monthly expenses. Any appreciation on the house is a bonus.
- I like knowing that my child has a stable home to grow up in and that we won't have to move and change school districts based on the whims of the rental market.
- I get a lot of emotional satisfaction from owning a home and feeling like I belong here.
- I enjoy being able to modify the house however I want whenever I want.
posted by gatorae at 9:53 AM on March 16, 2015 [1 favorite]
- I intend to live in my city forever and I intend to live in this house at least 10 years if not forever.
- Our mortgage + insurance + property tax is less for our 3/2 home with a pool in a nice neighborhood than we were paying in rent on a crappy 2/2 townhouse in a bad neighborhood. The same is not true if you add in maintenance costs, but the tradeoff is still well worth it to us.
- I consider it part of my retirement savings, since the home will be paid off by the time my husband and I are ready to retire, which will greatly reduce our monthly expenses. Any appreciation on the house is a bonus.
- I like knowing that my child has a stable home to grow up in and that we won't have to move and change school districts based on the whims of the rental market.
- I get a lot of emotional satisfaction from owning a home and feeling like I belong here.
- I enjoy being able to modify the house however I want whenever I want.
posted by gatorae at 9:53 AM on March 16, 2015 [1 favorite]
We are just starting to think about looking for a house in our early 40s after many years of happy renting. Reasons for buying now include:
1) we now have 2 kids who appreciate a backyard and will probably eventually want their own bedrooms
2) we hope to stay in our current area for the next 20+ years
3) buying in our current location seems to be at least neutral, cost-wise, with renting (as opposed to our last city, where buying is much more expensive).
4) we are finally in a place where we can afford to buy a place we actually want to live in, as opposed to buying just to buy.
Last year we had a leaky roof, our refrigerator and dishwasher both broke in the same month, and the entire facade of the building we were living in needed to be repaired and all the windows replaced. Our former landlords are smart, responsive, and considerate people and they took care of all that stuff quickly, but we were glad it wasn't our responsibility!
It sounds to me like you have many excellent reasons for continuing to rent. Don't worry about "not being an adult"--I could argue that buying a home when you have good reasons not to is NOT the "adult" decision, but that making reasoned choices about your personal and financial needs and priorities IS the adult thing to do.
posted by The Elusive Architeuthis at 10:01 AM on March 16, 2015
1) we now have 2 kids who appreciate a backyard and will probably eventually want their own bedrooms
2) we hope to stay in our current area for the next 20+ years
3) buying in our current location seems to be at least neutral, cost-wise, with renting (as opposed to our last city, where buying is much more expensive).
4) we are finally in a place where we can afford to buy a place we actually want to live in, as opposed to buying just to buy.
Last year we had a leaky roof, our refrigerator and dishwasher both broke in the same month, and the entire facade of the building we were living in needed to be repaired and all the windows replaced. Our former landlords are smart, responsive, and considerate people and they took care of all that stuff quickly, but we were glad it wasn't our responsibility!
It sounds to me like you have many excellent reasons for continuing to rent. Don't worry about "not being an adult"--I could argue that buying a home when you have good reasons not to is NOT the "adult" decision, but that making reasoned choices about your personal and financial needs and priorities IS the adult thing to do.
posted by The Elusive Architeuthis at 10:01 AM on March 16, 2015
I inherited my house from my dad when he passed away. The mortgage is paid off, so I only have to pay the property taxes. The taxes in this area are extremely high, but so are rents, and there's no way I could afford to rent something that gives me the amount of space (and land!) that I currently have.
That said, renting sometimes looks extremely attractive, because oh gods, landscaping and maintenance. Aside from the time and expense, I'm sure there are a half dozen things *at least* that I ought to be doing and just don't know about. So if I didn't have this windfall house, I'm not sure that I would go out and buy my own. And as another single person with cats, I would totally not feel like I was behind in life.
posted by velvet_n_purrs at 10:03 AM on March 16, 2015 [1 favorite]
That said, renting sometimes looks extremely attractive, because oh gods, landscaping and maintenance. Aside from the time and expense, I'm sure there are a half dozen things *at least* that I ought to be doing and just don't know about. So if I didn't have this windfall house, I'm not sure that I would go out and buy my own. And as another single person with cats, I would totally not feel like I was behind in life.
posted by velvet_n_purrs at 10:03 AM on March 16, 2015 [1 favorite]
We once bought a house (which we lost when we made lifestyle/career changes we couldn't have anticipated when we first bought it, and ended up having to be remote landlords, and then had tenants from hell) because it seemed like the thing to do.
We live in Southern California now, and will never be able to afford to buy here unless some sort of very freaky luck comes our way, and that's fine with us. We are capable of comfortably living with things not 100% designed and controlled by us (because, having owned a house, we know that ownership does not magically mean having the time, money, skills or inclination to do all that anyway*). We can make some efforts to ensure we don't have insane or shitty landlords, but I'd still rather have a crazy landlord and a year lease than a psychotic neighbor I'm stuck with until one of us sells or dies or kills the other.
Our employment situation is too unpredictable (both in terms of security and also just location - we are on one edge of town and I could change jobs and be two hours from here) for me to be comfortable pinning us down in one place. In the house we bought, I convinced myself that it was fine to buy a house for 5 years, we'd just sell it *handwave* whenever we wanted. That little bit of self-delusion and lack of psychic ability ruined us financially. Completely.
*Now, if there's some feature we really want - including a different location - we just move to a place that has it.
We never got any real benefit from the alleged magical mystical tax deductions either, thanks to being on the lower end of the AMT, and at this point after having 3 different tax professionals try to explain it to me, I do not understand why this isn't a problem for everyone who can afford to buy a house. That was why I did it, and if Future Me had arrived on my doorstep rending her garments and shaking her tax returns in my face, I would have been a firm hell no and my credit wouldn't be fucked. (Note: our credit is only fucked for buying a house. Nobody else really gives a shit about our foreclosure. I'm still mad.)
Retirement is my only serious concern about not owning. We're not in great shape across the board, and it would have been nice to know we'd be paid off by the time it was a concern. I don't know how to get around that problem except hope we end up in a situation where we can put together cash enough in the next 20 years to do something when the time comes.
posted by Lyn Never at 10:04 AM on March 16, 2015 [1 favorite]
We live in Southern California now, and will never be able to afford to buy here unless some sort of very freaky luck comes our way, and that's fine with us. We are capable of comfortably living with things not 100% designed and controlled by us (because, having owned a house, we know that ownership does not magically mean having the time, money, skills or inclination to do all that anyway*). We can make some efforts to ensure we don't have insane or shitty landlords, but I'd still rather have a crazy landlord and a year lease than a psychotic neighbor I'm stuck with until one of us sells or dies or kills the other.
Our employment situation is too unpredictable (both in terms of security and also just location - we are on one edge of town and I could change jobs and be two hours from here) for me to be comfortable pinning us down in one place. In the house we bought, I convinced myself that it was fine to buy a house for 5 years, we'd just sell it *handwave* whenever we wanted. That little bit of self-delusion and lack of psychic ability ruined us financially. Completely.
*Now, if there's some feature we really want - including a different location - we just move to a place that has it.
We never got any real benefit from the alleged magical mystical tax deductions either, thanks to being on the lower end of the AMT, and at this point after having 3 different tax professionals try to explain it to me, I do not understand why this isn't a problem for everyone who can afford to buy a house. That was why I did it, and if Future Me had arrived on my doorstep rending her garments and shaking her tax returns in my face, I would have been a firm hell no and my credit wouldn't be fucked. (Note: our credit is only fucked for buying a house. Nobody else really gives a shit about our foreclosure. I'm still mad.)
Retirement is my only serious concern about not owning. We're not in great shape across the board, and it would have been nice to know we'd be paid off by the time it was a concern. I don't know how to get around that problem except hope we end up in a situation where we can put together cash enough in the next 20 years to do something when the time comes.
posted by Lyn Never at 10:04 AM on March 16, 2015 [1 favorite]
We own a couple of homes. We love DIY projects, to the point where we are doing a lot of work on a detached MIL unit new build and putting in our own radiant floor heating. BUT that said, if you don't actively like working on a home (or have the money to hire people to renovate everything), I really don't think homeownership gives you that much.
There is stability in housing costs, of course, but taxes, insurance, and utilities still up and down depending on factors you cannot control. And if you have to relocate in a couple of years anyway, the 10% typical ballpark cost of selling a home makes it REALLY not worth it.
I think homeownership is generally seen as a mark of adulthood because it's supposed to show that 1. you were able to save up a large amount of money for the down payment, 2. you have good enough credit/financial stability to get a mortgage, and 3. you know how to take care of a large thing. As far as items (1) and (2) are concerned, just save up lots of money and make sure your credit is good. (3)... well, take care of yourself, do interesting projects, and don't worry about a house specifically.
There are numerous articles about why buying a house is a bad investment (in the typical scenario). Here's just one example.
That said, if you're the type of person who wants to never* be forced to move, and who wants to be able to do DIY projects at home, then maybe homeownership is for you. Then you might consider changing jobs/careers to get more geographical stability.
*There's always eminent domain and all that.
posted by ethidda at 10:13 AM on March 16, 2015 [2 favorites]
There is stability in housing costs, of course, but taxes, insurance, and utilities still up and down depending on factors you cannot control. And if you have to relocate in a couple of years anyway, the 10% typical ballpark cost of selling a home makes it REALLY not worth it.
I think homeownership is generally seen as a mark of adulthood because it's supposed to show that 1. you were able to save up a large amount of money for the down payment, 2. you have good enough credit/financial stability to get a mortgage, and 3. you know how to take care of a large thing. As far as items (1) and (2) are concerned, just save up lots of money and make sure your credit is good. (3)... well, take care of yourself, do interesting projects, and don't worry about a house specifically.
There are numerous articles about why buying a house is a bad investment (in the typical scenario). Here's just one example.
That said, if you're the type of person who wants to never* be forced to move, and who wants to be able to do DIY projects at home, then maybe homeownership is for you. Then you might consider changing jobs/careers to get more geographical stability.
*There's always eminent domain and all that.
posted by ethidda at 10:13 AM on March 16, 2015 [2 favorites]
I hate it when I discover something about my home that's done poorly or just plain broken -- and when I own the place, I don't have to beg my landlord to fix it. Even better, if we get a brain storm about an improvement, we are paying so we get to choose.
We have four kids, and bought a house after the first one was born. There was too much that needed fixing, and no willingness by the owner to do anything. But did a lot of work on the place we bought until we simply outgrew it.
On the other hand, your likely need to move would be a huge strike against buying. *shrug*
posted by wenestvedt at 10:46 AM on March 16, 2015 [1 favorite]
We have four kids, and bought a house after the first one was born. There was too much that needed fixing, and no willingness by the owner to do anything. But did a lot of work on the place we bought until we simply outgrew it.
On the other hand, your likely need to move would be a huge strike against buying. *shrug*
posted by wenestvedt at 10:46 AM on March 16, 2015 [1 favorite]
My husband and I bought a house after we got sick and tired of the owner and management company renting the place we were in dragging their feet on needed repairs and only investing just enough money to temporarily patch it, not to fix the underlying issues. What took us over the line was a squirrel infestation in the attic--the eaves on this 60 year old house had mesh on them to allow for airflow, which the squirrels kept chewing through to gain entry. The owner wasn't willing (or able?) to lay down the money to replace the mesh with something squirrel-proof, so it kept getting replaced and then gnawed through again within a few days. This sort of thing happened with all problems we reported.
While it's annoying to have to find a good person or company to do the work, it's been a godsend to be able to throw money at a problem and have the damn thing fixed. It helps that my husband works from home, so neither of us has to take off work to let service people in and out.
Also the property manager didn't consider us finding and killing three roaches in one evening, after weeks of finding and killing a roach every day, a sign of infestation. I DON'T WANT TO KNOW WHAT HIS OTHER PROPERTIES LOOKED LIKE.
posted by telophase at 10:57 AM on March 16, 2015 [1 favorite]
While it's annoying to have to find a good person or company to do the work, it's been a godsend to be able to throw money at a problem and have the damn thing fixed. It helps that my husband works from home, so neither of us has to take off work to let service people in and out.
Also the property manager didn't consider us finding and killing three roaches in one evening, after weeks of finding and killing a roach every day, a sign of infestation. I DON'T WANT TO KNOW WHAT HIS OTHER PROPERTIES LOOKED LIKE.
posted by telophase at 10:57 AM on March 16, 2015 [1 favorite]
We bought our house more than 20 years ago. The key factor was our desire to live in an area with good schools, as we had a young child and had seen what the schools looked like where we were renting (graffiti and barbed wire fences). We bought one of the smallest and cheapest houses on the edge of a good neighborhood. The fact that it was located next to railroad tracks, and close to power lines and oil and gas pipelines made it affordable.
Even though we have paid off the mortgage we have the costs of property taxes and insurance, which run a bit over $500 per month. Things have to be fixed or replaced, such as the roof, the sewer line, the water line, the air conditioner, the heater, and the siding. Painting and window replacement is necessary at some point.
We enjoy making our environment suit our needs. Flowers, trees, ornamental grasses, a couple fountains, tall bamboo, wild flowers, and the like, work best when you have years to develop them.
There is the security of the feeling that this is the place where we could live at low cost once we retire, and get up to $500,000 in tax free income when we sell.
It is not for everyone. You need to be able to fix things, or be willing to pay to have things fixed. You are tied to the fortunes of the neighborhood. If a neighbor decides to get a loud dog, or their kids decide to start a band, you have to deal with that. On the other hand, you get to enjoy seeing their children grow up.
posted by Midnight Skulker at 10:57 AM on March 16, 2015 [1 favorite]
Even though we have paid off the mortgage we have the costs of property taxes and insurance, which run a bit over $500 per month. Things have to be fixed or replaced, such as the roof, the sewer line, the water line, the air conditioner, the heater, and the siding. Painting and window replacement is necessary at some point.
We enjoy making our environment suit our needs. Flowers, trees, ornamental grasses, a couple fountains, tall bamboo, wild flowers, and the like, work best when you have years to develop them.
There is the security of the feeling that this is the place where we could live at low cost once we retire, and get up to $500,000 in tax free income when we sell.
It is not for everyone. You need to be able to fix things, or be willing to pay to have things fixed. You are tied to the fortunes of the neighborhood. If a neighbor decides to get a loud dog, or their kids decide to start a band, you have to deal with that. On the other hand, you get to enjoy seeing their children grow up.
posted by Midnight Skulker at 10:57 AM on March 16, 2015 [1 favorite]
In the interest of fair disclosure, I should add to my pro-house-buying comment above that one of the current problems we have to find someone to fix is that the retaining wall on one side wasn't built high enough and the soil is eroding, which means we need to get the wall built higher so our house doesn't fall over on top of the neighbor's house. It's going to be expensive. But it's still better than having to convince someone else that it's money that needs to be spent, and working with their timetable instead of ours. YMMV.
posted by telophase at 11:03 AM on March 16, 2015
posted by telophase at 11:03 AM on March 16, 2015
I bought a house with the wrong person at the wrong time through the wrong lawyer, lost everything and re-evaluated.
My plan now? To rent, keep saving (I'm pretty ok at that) saving saving saving, then in however many years it takes buy an affordable and modest house (in a decent area) outright. Fuck a whole heap of sharks feeding off me.
posted by tanktop at 11:25 AM on March 16, 2015 [2 favorites]
My plan now? To rent, keep saving (I'm pretty ok at that) saving saving saving, then in however many years it takes buy an affordable and modest house (in a decent area) outright. Fuck a whole heap of sharks feeding off me.
posted by tanktop at 11:25 AM on March 16, 2015 [2 favorites]
I'm 38 and I bought a house last year after my marriage ended, and it was working out the same to pay a mortgage on a small (tiny!) house in an area I liked as it would have been to rent one. I liked the idea of having somewhere that was just mine, and that I knew I wasn't going to have to leave - we always rented and were once in a house we loved when one day the landlord rang to say he was putting it on the market and we basically had a month to move. That wasn't fun. I also liked the idea that I could rent it out if I moved which would pay the rent somewhere else, while still giving me an investment in the long term. I can also do what I want with it structurally and I don't need permission to decorate etc.
That said, I never felt "less adult" renting, it saves a lot of maintenance cost and hassle, and you can move at a month's notice.
One thing I would say about your job possibly ending in 2+ years. If you are thinking of buying, this is an incentive to do it while you are in steady employment. If you decide to do it when your job is finished it will be a lot harder to get a mortgage. (I'm basing this on where I live). But if you don't feel like it's something you want to do, only something you should do, don't worry about it. A mortgage means decades of debt so don't sign up to one unless you really want to.
posted by billiebee at 11:28 AM on March 16, 2015
That said, I never felt "less adult" renting, it saves a lot of maintenance cost and hassle, and you can move at a month's notice.
One thing I would say about your job possibly ending in 2+ years. If you are thinking of buying, this is an incentive to do it while you are in steady employment. If you decide to do it when your job is finished it will be a lot harder to get a mortgage. (I'm basing this on where I live). But if you don't feel like it's something you want to do, only something you should do, don't worry about it. A mortgage means decades of debt so don't sign up to one unless you really want to.
posted by billiebee at 11:28 AM on March 16, 2015
We bought because we were tired of being under the thumbs of jerk landlords, who were everywhere, it seemed. Our last landlord tried to get us to suddenly pay for a parking lot space that was written into our lease, as one example, and she had the parking lot management company indirectly threaten to steal our car as leverage. I fucking hate bullies, to begin with, and this final act of bullying stunk pretty badly.
We had also become relatively secure in our career situations and wanted to settle down where we would have more space and more freedom to do what we like, without having to answer to apartment neighbors, in one specific case to own and have the freedom to play a grand piano, have pets, maybe raise children.
Also, we appear to have bought at the apparent bottom of the real estate market crash, and so we are fortunate enough to be well above water on our debt obligation. We were first-time buyers and also qualified for some incentives. Perhaps we may even make a little money when we one day sell, which would help buy our next place with the features we really want. We were lucky enough to have the planets in the right alignment, and we got a decent place the first time around. Not perfect, but after a few years it is starting to feel like our home.
I won't lie to you: It's definitely a trade-off. Rationally, owning a home is not cheap. We spent a lot on fixing things in the first 3-4 years. Maintenance and upkeep requires time, supplies, and — most importantly — motivation.
Also, we have been starting to get itchy about career changes, and having a mortgage to feed every month — because the bankers get fed before anything else — makes those kinds of plans harder.
Renting is easier in those respects, but at the cost of certain freedoms. Making that equation balance out in one direction or another is a rational and emotional calculation.
posted by a lungful of dragon at 11:34 AM on March 16, 2015 [2 favorites]
We had also become relatively secure in our career situations and wanted to settle down where we would have more space and more freedom to do what we like, without having to answer to apartment neighbors, in one specific case to own and have the freedom to play a grand piano, have pets, maybe raise children.
Also, we appear to have bought at the apparent bottom of the real estate market crash, and so we are fortunate enough to be well above water on our debt obligation. We were first-time buyers and also qualified for some incentives. Perhaps we may even make a little money when we one day sell, which would help buy our next place with the features we really want. We were lucky enough to have the planets in the right alignment, and we got a decent place the first time around. Not perfect, but after a few years it is starting to feel like our home.
I won't lie to you: It's definitely a trade-off. Rationally, owning a home is not cheap. We spent a lot on fixing things in the first 3-4 years. Maintenance and upkeep requires time, supplies, and — most importantly — motivation.
Also, we have been starting to get itchy about career changes, and having a mortgage to feed every month — because the bankers get fed before anything else — makes those kinds of plans harder.
Renting is easier in those respects, but at the cost of certain freedoms. Making that equation balance out in one direction or another is a rational and emotional calculation.
posted by a lungful of dragon at 11:34 AM on March 16, 2015 [2 favorites]
Best answer: You said you might move in 2.5 years. Here's a financial reason (maybe) not to do it.
Even if you bought right now, that short of time period isn't really a long enough time to get enough out of the investment aspect of home ownership if you have to relocate for work. Unless you're paying cash for a place in a steady market, you're going to have substantial fees and costs associated with just the purchase itself (broker fees, interest/debt service, closing costs, etc.) and those associated with ownership (taxes, insurance, maintenance, etc.).
If you live there long enough, you'll hopefully recoup these as part of the resale years down the road, or at worst you'll have just lost about the same amount of money you'd have paid to rent all that time.
So unless you're paying cash or buying in a really hot, really appreciating area, you're not going to get one of the significant financial benefits of home ownership, because you won't have had time to spread out all those expenses over time: you'll either recoup some of them in 2.5 years, or you won't. Then you'll have had the cost of rent but none of the benefits (i.e., do nothing but live!).
posted by resurrexit at 11:39 AM on March 16, 2015 [4 favorites]
Even if you bought right now, that short of time period isn't really a long enough time to get enough out of the investment aspect of home ownership if you have to relocate for work. Unless you're paying cash for a place in a steady market, you're going to have substantial fees and costs associated with just the purchase itself (broker fees, interest/debt service, closing costs, etc.) and those associated with ownership (taxes, insurance, maintenance, etc.).
If you live there long enough, you'll hopefully recoup these as part of the resale years down the road, or at worst you'll have just lost about the same amount of money you'd have paid to rent all that time.
So unless you're paying cash or buying in a really hot, really appreciating area, you're not going to get one of the significant financial benefits of home ownership, because you won't have had time to spread out all those expenses over time: you'll either recoup some of them in 2.5 years, or you won't. Then you'll have had the cost of rent but none of the benefits (i.e., do nothing but live!).
posted by resurrexit at 11:39 AM on March 16, 2015 [4 favorites]
If I were you, I would keep renting. You aren't throwing money away - you're paying for a roof over your head. It's a utility, like the electric service and phone bill. You have to live somewhere, and you're going to pay for it regardless. In addition, you're paying for the convenience of having the landlord handle all maintenance, which is no small thing.
Combined with your job and personal situation, I see no good reason to get a house if you aren't strongly inclined to do so. You're still a grown up - don't let our weird cultural standards tell you otherwise.
We finally bought because I had landed a very good, not-going-anywhere job, we know we're staying in the area, my partner desperately needs stability for his mental health, and because he wanted a dog and renting when you have a dog is really difficult. In addition, on the surface, the mortgage cost worked out to less than renting, rents were going up in big jumps (10% sometimes!) from year to year, and our last landlords were jerks who were coming in to our apartment 2-3 times a month for Reasons, and we couldn't deny them because they followed the law to the letter with notifications and Legal Reasons to Enter. It wasn't just us; they were monitoring all 160 units with similar frequent visits. We looked for a new place to move and couldn't afford the rent on any decent place in the area.
However. I nearly had a full on breakdown our first year here; I didn't truly understand what it meant that the house had been vacant for almost 3 years. (It means a LOT of maintenance wasn't done and needs to be caught up on). We had a skunk move in under the 3 season room during the winter; you don't truly understand how bad a skunk smells until you can TASTE it at 4AM when the skunk decides to advertise his stud abilities to the neighborhood. I had no idea how worn down I'd become from trying to remove wallpaper from the entire house. ALL of our discretionary income has been spent bringing the house up to standards from a maintenance perspective, and will be so for the next year or so. I don't think it will stabilize until we've been here 3-4 years. My partner and I already argue about chore distribution; having a house gives us a helluva lot more to argue about, and we can add not just chores but home improvement lists to the things we argue about.
We've been lucky; our house has continually appreciated and we locked in a decent fixed rate on the mortgage. But my partner's income situation has been more unsteady than we expected, and although we can carry all our expenses based on my income, we can only do so just barely and are really hosed if the unexpected happens and I lose my job. The income situation would be much easier to deal with if we were renting.
Honestly, I've told a couple good friends that I'm glad we have the house, but if we end up selling it, I don't know that I would buy another.
posted by RogueTech at 11:54 AM on March 16, 2015 [1 favorite]
Combined with your job and personal situation, I see no good reason to get a house if you aren't strongly inclined to do so. You're still a grown up - don't let our weird cultural standards tell you otherwise.
We finally bought because I had landed a very good, not-going-anywhere job, we know we're staying in the area, my partner desperately needs stability for his mental health, and because he wanted a dog and renting when you have a dog is really difficult. In addition, on the surface, the mortgage cost worked out to less than renting, rents were going up in big jumps (10% sometimes!) from year to year, and our last landlords were jerks who were coming in to our apartment 2-3 times a month for Reasons, and we couldn't deny them because they followed the law to the letter with notifications and Legal Reasons to Enter. It wasn't just us; they were monitoring all 160 units with similar frequent visits. We looked for a new place to move and couldn't afford the rent on any decent place in the area.
However. I nearly had a full on breakdown our first year here; I didn't truly understand what it meant that the house had been vacant for almost 3 years. (It means a LOT of maintenance wasn't done and needs to be caught up on). We had a skunk move in under the 3 season room during the winter; you don't truly understand how bad a skunk smells until you can TASTE it at 4AM when the skunk decides to advertise his stud abilities to the neighborhood. I had no idea how worn down I'd become from trying to remove wallpaper from the entire house. ALL of our discretionary income has been spent bringing the house up to standards from a maintenance perspective, and will be so for the next year or so. I don't think it will stabilize until we've been here 3-4 years. My partner and I already argue about chore distribution; having a house gives us a helluva lot more to argue about, and we can add not just chores but home improvement lists to the things we argue about.
We've been lucky; our house has continually appreciated and we locked in a decent fixed rate on the mortgage. But my partner's income situation has been more unsteady than we expected, and although we can carry all our expenses based on my income, we can only do so just barely and are really hosed if the unexpected happens and I lose my job. The income situation would be much easier to deal with if we were renting.
Honestly, I've told a couple good friends that I'm glad we have the house, but if we end up selling it, I don't know that I would buy another.
posted by RogueTech at 11:54 AM on March 16, 2015 [1 favorite]
Best answer: This hobo put down homeowning roots just this past Autumn, and it was a hard one to make happen. During the various housing booms, people I knew would buy mcmansions out in bland auto-only suburbs of the US or UK. I typically reacted to the "renting is throwing your money away" argument by pointing out that buying someplace where you don't want to live is really throwing money away.
So when it came down to it we had to find someplace that hit a super sweet spot: affordable, not too cramped, plentiful transit links and amenities within walking distance, and so forth. Once I realised that such places exist and were just becoming more expensive as time went on, we made the search and found a place.
Now I will say that the debt of a mortgage is a horrible thing, and I really do not appreciate it at all. Spend as much as you can up front in down payment or early mortgage payments, because that's where you're doing your worst against compound interest.
And if you find out that it's not really your cup of tea, well you can likely rent it if you bought someplace with a healthy rental market. And even if that's not an option you may find that the equity you built up lets you sell it and drop a nicer down payment on the next place.
I still don't think buying property is a necessity of growing up, any more than I think that way about buying an automobile (or in my case, even bothering to learn to drive the damnable things). But now that we own a fraction of this place, it looks like we are in a position to make it stick instead of being forced out by rising rents. More likely, inflation will make our mortgage cheaper in time.
I am told that when my parents bought the house I grew up in, my mother stripped hideous pink paint from a gorgeous dark stained built-in chest of drawers in the dining room, sanded it, refinished it, and put new handles and details on. I remember this thing fondly. Anyway, when my father came home he saw the pink paint flakes and shavings all over the dropcloth on the floor and wailed "That was the part we paid off!"
posted by rum-soaked space hobo at 12:41 PM on March 16, 2015 [3 favorites]
So when it came down to it we had to find someplace that hit a super sweet spot: affordable, not too cramped, plentiful transit links and amenities within walking distance, and so forth. Once I realised that such places exist and were just becoming more expensive as time went on, we made the search and found a place.
Now I will say that the debt of a mortgage is a horrible thing, and I really do not appreciate it at all. Spend as much as you can up front in down payment or early mortgage payments, because that's where you're doing your worst against compound interest.
And if you find out that it's not really your cup of tea, well you can likely rent it if you bought someplace with a healthy rental market. And even if that's not an option you may find that the equity you built up lets you sell it and drop a nicer down payment on the next place.
I still don't think buying property is a necessity of growing up, any more than I think that way about buying an automobile (or in my case, even bothering to learn to drive the damnable things). But now that we own a fraction of this place, it looks like we are in a position to make it stick instead of being forced out by rising rents. More likely, inflation will make our mortgage cheaper in time.
I am told that when my parents bought the house I grew up in, my mother stripped hideous pink paint from a gorgeous dark stained built-in chest of drawers in the dining room, sanded it, refinished it, and put new handles and details on. I remember this thing fondly. Anyway, when my father came home he saw the pink paint flakes and shavings all over the dropcloth on the floor and wailed "That was the part we paid off!"
posted by rum-soaked space hobo at 12:41 PM on March 16, 2015 [3 favorites]
Renting a place is like an at the money put option. If you don't like it or something goes horribly wrong, you can leave. You pay a premium for that right. And you're bearish on the asset: you do well if the asset declines in value and you're worse off if it goes up in value.
Me: bought 3 years ago after 20 years-ish of renting.
posted by jpe at 2:31 PM on March 16, 2015 [1 favorite]
Me: bought 3 years ago after 20 years-ish of renting.
posted by jpe at 2:31 PM on March 16, 2015 [1 favorite]
Lots of good reasons (for both "buy" and "rent") upthread; I shan't repeat them.
A huge reason I ended up buying a house, and one I didn't see mentioned yet: no shared walls with neighbors.
I don't have to worry about being incinerated in my sleep because the moron one floor down thinks his balcony is a clever place to run a charcoal grill1.
I'm not going to see rats in my kitchen because the couple next door has an extremely tentative relationship with the concept of housekeeping.
I don't have to know my neighbors' tastes in music, or the hours they keep, or when they have a shouting match with their cohabitants.
Hell is other people, and owning (a single-family dwelling) rather than renting (an apartment) buys you distance from them.
OTOH, moving house is a big suck on a sour lemon, and owning rather than renting exacerbates it. If I thought I might have to relocate in the next few years (for employment, or any other reason), then renting would be the logical choice.
1-- The moron down the block who was deep-frying a turkey2 in his garage might still manage to cause a conflagration big enough to consume the entire neighborhood. A little longer odds, though.
2-- This is a thing that happens. The results are delicious, but the process is best conducted far from any structure.
posted by sourcequench at 2:56 PM on March 16, 2015 [3 favorites]
A huge reason I ended up buying a house, and one I didn't see mentioned yet: no shared walls with neighbors.
I don't have to worry about being incinerated in my sleep because the moron one floor down thinks his balcony is a clever place to run a charcoal grill1.
I'm not going to see rats in my kitchen because the couple next door has an extremely tentative relationship with the concept of housekeeping.
I don't have to know my neighbors' tastes in music, or the hours they keep, or when they have a shouting match with their cohabitants.
Hell is other people, and owning (a single-family dwelling) rather than renting (an apartment) buys you distance from them.
OTOH, moving house is a big suck on a sour lemon, and owning rather than renting exacerbates it. If I thought I might have to relocate in the next few years (for employment, or any other reason), then renting would be the logical choice.
1-- The moron down the block who was deep-frying a turkey2 in his garage might still manage to cause a conflagration big enough to consume the entire neighborhood. A little longer odds, though.
2-- This is a thing that happens. The results are delicious, but the process is best conducted far from any structure.
posted by sourcequench at 2:56 PM on March 16, 2015 [3 favorites]
You can rent houses, though. I haven't lived in an apartment in 20 years.
It is still possible to have brutally shitty neighbors in a house, too. Unless you live in the country where you can't see the next house, the problems don't change much - fire, vermin, death threats and domestic violence included - except that since a lot of people own it's none of your business and there's nothing you can do about it. At least if you rent, you can leave.
posted by Lyn Never at 4:32 PM on March 16, 2015 [2 favorites]
It is still possible to have brutally shitty neighbors in a house, too. Unless you live in the country where you can't see the next house, the problems don't change much - fire, vermin, death threats and domestic violence included - except that since a lot of people own it's none of your business and there's nothing you can do about it. At least if you rent, you can leave.
posted by Lyn Never at 4:32 PM on March 16, 2015 [2 favorites]
Because this. It's not cheaper than renting, and it's certainly more work. Rents might go up, might go down. My house market value might go up, might go down. But I know what I'm going to be paying for the next 30 years (and right now, that's the plan.) It's a hedge against rent fluctuations.
posted by ctmf at 7:07 PM on March 16, 2015 [1 favorite]
posted by ctmf at 7:07 PM on March 16, 2015 [1 favorite]
If your rental market is booming, then buying can help keep you in place. I'm buying right now because my rental neighborhood has popped in the last year. My new neighbors are paying $500/mo more than I am currently, rent increases will push me out within 3 years if I don't get an income windfall, and when I do get pushed out, I'll have to downsize to a studio apartment just to find a place I can afford.
So I'm moving 1.5 hours away (to a far less 'cool' city), and buying a place that will be a full half of my current rent, including taxes & insurance. Add in all the research I did on walkability, job prospects, public transportation, and local public works programs, and I'm quite happy with my decision. For me it came down to finances and long term stability.
posted by jenmakes at 10:34 PM on March 16, 2015 [1 favorite]
So I'm moving 1.5 hours away (to a far less 'cool' city), and buying a place that will be a full half of my current rent, including taxes & insurance. Add in all the research I did on walkability, job prospects, public transportation, and local public works programs, and I'm quite happy with my decision. For me it came down to finances and long term stability.
posted by jenmakes at 10:34 PM on March 16, 2015 [1 favorite]
Buying a home makes sense for people with family and plenty of money who intend to buy a large home and make it the family home. If you don't plan to hand your home down to your children and grandchildren (with whom you will live until you die), you're better off staying mobile and letting the owner take care of the place. When you rent, you can fairly easily move away from exorbitant rent increases and shifting neighborhoods.
posted by pracowity at 3:33 AM on March 17, 2015
posted by pracowity at 3:33 AM on March 17, 2015
I had a home-owning friend who passed away a few years ago who was always saying: "You don't own the house. The house owns you."
posted by telstar at 3:51 AM on March 17, 2015
posted by telstar at 3:51 AM on March 17, 2015
sourcequench: You can rent houses and buy flats. I absolutely have shared walls with neighbours, and some of them are upstairs from us.
posted by rum-soaked space hobo at 6:22 AM on March 17, 2015
posted by rum-soaked space hobo at 6:22 AM on March 17, 2015
Another thing that's important is to choose a neighbourhood based on what you expect it to be in five years. Figure out where new rail service is going, where universities are increasing admissions, and where shops are being sold along a high street to a better class of retailer. You need to do a bit of the old Jane Jacobs on a place to realise that the place people are calling a slum has been anything but for a few years.
posted by rum-soaked space hobo at 6:24 AM on March 17, 2015
posted by rum-soaked space hobo at 6:24 AM on March 17, 2015
To build on ctmf's point that owning a house is a hedge, here's a relevant article: You're Naturally Short Housing. It provides another interesting point of view, on the rent v buy, especially if you're more investment oriented than emotionally oriented (w.r.t. your housing purchase). It also gives good arguments for why you should never take out an equity loan, even if your house's value rises.
posted by ethidda at 10:22 AM on March 17, 2015
posted by ethidda at 10:22 AM on March 17, 2015
You are seriously deluding yourself if you consider buying a house a hedge. It is a flawed hedge because the hedge only works if prices go up, but unlike a real hedge it can destroy you if prices go down. This is what we saw in the last housing bust.
Buying a house is a leveraged bet, investing on margin, and if the bet goes wrong and your margin is called, you can not only lose the house but your entire life savings. That is not a hedge.
Buy a house because you want the lifestyle of a homeowner. Housing is a consumption choice just like what type car you buy is a consumption choice. Don't buy a house because you think it is an investment, or even worse a hedge.
posted by JackFlash at 10:57 AM on March 17, 2015 [1 favorite]
Buying a house is a leveraged bet, investing on margin, and if the bet goes wrong and your margin is called, you can not only lose the house but your entire life savings. That is not a hedge.
Buy a house because you want the lifestyle of a homeowner. Housing is a consumption choice just like what type car you buy is a consumption choice. Don't buy a house because you think it is an investment, or even worse a hedge.
posted by JackFlash at 10:57 AM on March 17, 2015 [1 favorite]
I know all of these things suggest against buying a home, but I feel like I'm behind in life because I'm still renting. There are also the financial considerations; I don't like throwing rent money into something that I don't own and can never sell for(hopefully for a profit). But of course, buying a home is expensive, plus purchasing appliances, etc. So, I'm really torn about the whole idea. Help?
Probably the best calculator I know of on this front is Micael Bluejay's. Take a look at all the variables in there. For example, commission and closing costs. The average there is 6 percent of the home price. If you buy a home, and sell it 2 years later to buy a different one, and do this for a decade, you will basically have lost a third of your money to agent fees at the end. This is why people recommend if buy and hold strategies, especially for real estate.
There's also some amount of apples vs oranges going on. In an ideal world, you'd be given the opportunity to buy or rent any given home. Typically that's not the case, and you end up comparing renting an apartment, or buying a much larger home. Zillow lists exactly two houses with the same square footage as my apartment in town.
There's also this folk wisdom floating around that renting is throwing away money. As if borrowing money was any different. The reality is that when you factor in insurance, property tax and interest, renting is usually much more competitive. Even the mortgage interest deduction isn't as lucrative as you imagine. The standard deduction is quite high and so by itemizing you're only gaining a bit, and only for a little while, in most locations.
People say it's a forced savings plan. Well, so is social security, and they at least outpace inflation. Unlike real estate, which tends to bounce from slightly losing out to "OMG nobody told me prices might fall 20 percent and now my mortgage is under water". Stocks may have bad years too, but the returns are generally higher, and you don't have to borrow to buy them.
If you are concerned about life milestones, make some internal ones related to total net worth. Max out your 401k, IRAs, and other investments. At this point, at an age not to far away from yours, my retirement savings can buy the home I grew up in. In five years, retirement accounts will be earning more than I live on. Seven years after that, retirement funds will reach a million dollars. The degree to which that portfolio is exposed to real estate is of my choosing, and as a renter, can be adjusted without losing my home or changing my address.
My strategy is to stop thinking about owning a home as a life milestone, and start thinking of apartments and homes as different kinds of luxury goods. Renters pay to have someone else handle all the yardwork and repairs, owners have the freedom to redecorate, rebuild, and customize. Pick the luxury that matters most to you, because neither have terribly good returns.
posted by pwnguin at 9:54 PM on March 17, 2015 [5 favorites]
Probably the best calculator I know of on this front is Micael Bluejay's. Take a look at all the variables in there. For example, commission and closing costs. The average there is 6 percent of the home price. If you buy a home, and sell it 2 years later to buy a different one, and do this for a decade, you will basically have lost a third of your money to agent fees at the end. This is why people recommend if buy and hold strategies, especially for real estate.
There's also some amount of apples vs oranges going on. In an ideal world, you'd be given the opportunity to buy or rent any given home. Typically that's not the case, and you end up comparing renting an apartment, or buying a much larger home. Zillow lists exactly two houses with the same square footage as my apartment in town.
There's also this folk wisdom floating around that renting is throwing away money. As if borrowing money was any different. The reality is that when you factor in insurance, property tax and interest, renting is usually much more competitive. Even the mortgage interest deduction isn't as lucrative as you imagine. The standard deduction is quite high and so by itemizing you're only gaining a bit, and only for a little while, in most locations.
People say it's a forced savings plan. Well, so is social security, and they at least outpace inflation. Unlike real estate, which tends to bounce from slightly losing out to "OMG nobody told me prices might fall 20 percent and now my mortgage is under water". Stocks may have bad years too, but the returns are generally higher, and you don't have to borrow to buy them.
If you are concerned about life milestones, make some internal ones related to total net worth. Max out your 401k, IRAs, and other investments. At this point, at an age not to far away from yours, my retirement savings can buy the home I grew up in. In five years, retirement accounts will be earning more than I live on. Seven years after that, retirement funds will reach a million dollars. The degree to which that portfolio is exposed to real estate is of my choosing, and as a renter, can be adjusted without losing my home or changing my address.
My strategy is to stop thinking about owning a home as a life milestone, and start thinking of apartments and homes as different kinds of luxury goods. Renters pay to have someone else handle all the yardwork and repairs, owners have the freedom to redecorate, rebuild, and customize. Pick the luxury that matters most to you, because neither have terribly good returns.
posted by pwnguin at 9:54 PM on March 17, 2015 [5 favorites]
Neither your current nor future happiness hinge on whether you own your shelter.
Do not allow your peace of mind to depend on your finances. Things change.
Outcomes are complex. Decisions cannot be measured simply by outcomes.
Make the best decision you can make, and then be nice to people and live without remorse.
posted by garry.smith at 10:21 AM on March 18, 2015
Do not allow your peace of mind to depend on your finances. Things change.
Outcomes are complex. Decisions cannot be measured simply by outcomes.
Make the best decision you can make, and then be nice to people and live without remorse.
posted by garry.smith at 10:21 AM on March 18, 2015
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