Buying Or Renting/Saving?

Is it better to buy a house and pay of the mortgage even if it is more than renting? Or is it safer to rent and save the extra money you would have paid towards a mortgage? I am thinking long term investment.

With the housing market being the way it is now. I would say buy. Of course you need stellar credit now to secure a mortgage but I am paying 450 for my mortgage with both taxes and insurances included. I figure that I could easily pay this off in the next couple of years cause I was in the same boat as you but could not even find a slum to rent at this price. Good Luck

Buy the house and pay the mortgage, you probably won't find lower interest rates than now. Put down 20% if you can, it saves you lots of money! Also depends on your location. S Cali or florida or arizona or Nevada, I would wait a bit for housing to bottom in another year or two

All i've been told by estate agent friends of late is that renting is just money down the drain if buying is an option, and in some cases ust money down the drain fullstop.

Definitely BUY!

Ok thanks, that is what I thought.

Renting feels like I am paying off someone else's mortgage. They even make me paint the place!

Buying a home isn't always all it's cracked up to be. As an owner you pay for and fix whatever goes breaks or goes bad (like plumbing or the fridge biting the dust) and if you can't do it yourself you pay someone else to do it who does know how. If you're a renter and the fridge bites the dust you just call the landlord and he gives you a new one or you don't pay the rent until he does. I've owned 3 different homes but I've been a renter for the last 10 years because I don't wanna have to fix crap that breaks or buy appliances when they die. But, that's just me... you may be different.
The advice of putting 20% (or more) down is excellent, but don't have your taxes and insurance put in with your mortgage payment. Sure it's convenient, but the bank charges you a few (or several) hundred bucks a year for that convenience. Pay your taxes yourself and look around and get the best deal you can on insurance and you'll save yourself many hundreds of dollars per year, which adds up to thousands of dollars in the period of just a few years. Money that you could have invested and made more money on, or just bought some new lights for that grow room you've been wanting to make bigger. Oh yeah, and when you go to look at places, take someone with you that really knows what to look for (like a friend who works in construction) and what questions to ask the seller and the real estate person - because either one will screw ya if they can (sometimes even worse if they're a relative). Be sure to check out sites like Zillow to compare the place you're interested in with others in the same area. That'll tell you a lot too. Good luck!

here's how it works:

a mortage should NEVER be more than the market rent of the area where the property is located. a mortage should be amortized in such a way where you spend less than any renters around you. that way should you choose you can rent out the place and it yields enough to cover the mortage + a little profit. if you find yourself in a situation where your mortage is more than the market rent, you should look into refinancing, restructuring, whatever... you are being screwed if that's the case..... interest rates are LOW now...

tip top toker said:

All i've been told by estate agent friends of late is that renting is just money down the drain if buying is an option, and in some cases ust money down the drain fullstop.

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Lol... I'm in sales. That line is a classic.

redivider said:

here's how it works:

a mortage should NEVER be more than the market rent of the area where the property is located. a mortage should be amortized in such a way where you spend less than any renters around you. that way should you choose you can rent out the place and it yields enough to cover the mortage + a little profit. if you find yourself in a situation where your mortage is more than the market rent, you should look into refinancing, restructuring, whatever... you are being screwed if that's the case..... interest rates are LOW now...

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That would be near impossible where I live! Mortgage repayments are almost double rent payments.

girlfriday said:

That would be near impossible where I live! Mortgage repayments are almost double rent payments.

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there is NO way you should be forced to pay more as a mortage payment than what a market renter next door pays as rent.

you can be duped into this arrangement by unscrupulous lenders and ambitious salesmen, but HELL NO.

that's a bad deal. even if you have a house in an expensive neighborhood. for ex. a house in a nice neighborhood rents for 7,000 per month. the mortage should not be more than 5500 per month. if you have a mortage payment that's more than 80% of the potential rent income it's time to refinance, especially now with low interest rates.....

that's how it is. not how it should be....

redivider said:

here's how it works:

a mortage should NEVER be more than the market rent of the area where the property is located. a mortage should be amortized in such a way where you spend less than any renters around you. that way should you choose you can rent out the place and it yields enough to cover the mortage + a little profit. if you find yourself in a situation where your mortage is more than the market rent, you should look into refinancing, restructuring, whatever... you are being screwed if that's the case..... interest rates are LOW now...

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redivider said:

there is NO way you should be forced to pay more as a mortage payment than what a market renter next door pays as rent.

you can be duped into this arrangement by unscrupulous lenders and ambitious salesmen, but HELL NO.

that's a bad deal. even if you have a house in an expensive neighborhood. for ex. a house in a nice neighborhood rents for 7,000 per month. the mortage should not be more than 5500 per month. if you have a mortage payment that's more than 80% of the potential rent income it's time to refinance, especially now with low interest rates.....

that's how it is. not how it should be....

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Sorry rediver, but you're wrong. Property values and rental prices are influenced by different market forces. Not all markets are the same. I work with real estate investors, and we all know there are many places in this country where rent is far cheaper then a mortgage.

If you want to save and grow your money, the answer is very simple: live below your means and invest everything else.

If you're willing to rent a place far smaller (and significantly cheaper) then the house you feel you "deserve" you'll save a lot of money by renting.

The problem many home buyers have is they think their place of residence is an investment. It is not, it is a liability you'll be stuck with until you sell it. Investments make money, liabilities cost money.

If you want to be smart with your money rent cheap and invest your savings. Buying real estate can indeed be profitable, but NOT if you're living in the property. By living in the property you're consuming the profitability of your asset. The only exception would be to make improvements on the property yourself.

If you can live below your means, save money and invest, come retirement, you can buy the house of your dreams. If you buy your house now and keep the first house you buy, you'll retire and spend the rest of your life in a house of far less value then if you'd made some true investments to pay for your dream house.

there's literally a handful of markets that behave how you describe it.

i don't care who you work with and that point of view is ignorant at best!!

a house is not a liability, it only behaves as a liability if you are dumb enough to make monthly mortage payments that are more than the market rent in your geographical area.

lol. as long as your mortage is less than what you'd be paying for rent in your area you are SAVING money every time you make that mortage payment and therefore you are WINNING!!! buahaha....

your ubber conservative, loser talk doesn't work with me pal.

redivider said:

there's literally a handful of markets that behave how you describe it.

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So you acknowledge they exist?

redivider said:

i don't care who you work with and that point of view is ignorant at best!!

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Ignoring the advice of people who might know more then you is the very definition of ignorance.

redivider said:

a house is not a liability, it only behaves as a liability if you are dumb enough to make monthly mortage payments that are more than the market rent in your geographical area.

lol. as long as your mortage is less than what you'd be paying for rent in your area you are SAVING money every time you make that mortage payment and therefore you are WINNING!!! buahaha....

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As long as there are payments that must still be made, a house is a liability. A house no longer acts as a liability only when you have no more obligations to make payments.

redivider said:

your ubber conservative, loser talk doesn't work with me pal.

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You really think abdicating NOT buying a house to live in before making other investments is conservative?

Put down the pipe and let the grown ups talk.

yes it is like a liability but in the long run, it can also act like an asset, so stop pissing on each other... relax boys... if you have the ability to invest in something (and can deal with it if it does not work out) then do it... you do not want to bet your bottom dollar on any market, no matter what, you will be let down. there is no such thing as a sure thing, anyone who says that there is is terminally full of sh--... thus ends the lesson... respect

nl3004.kind said:

yes it is like a liability but in the long run, it can also act like an asset, so stop pissing on each other... relax boys... if you have the ability to invest in something (and can deal with it if it does not work out) then do it... you do not want to bet your bottom dollar on any market, no matter what, you will be let down.

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Very true. But if all of a person's wealth is tied up in one property, the risk can indeed be higher then the value of the return versus owning many other investments in more markets then just one.

I should also point out there are some strong tax incentives to owning the house you live in, which does enter into the equation of whether or not one should rent/buy.

An asset is only worth what someone is willing and or able to pay for it.
Housing may go another 20% down according to Gary Shilling who is very good at accurately forecasting recessions.


Here in SoCal we are already in another recession now not that we improved much from the first. Ask any business and most will say business is down or not improving. Look at the freeways and you see unusually light traffic. Parking lots empty at 10:00 am on weekdays unless your counting Wallmart.

We have real wage deflation. High unemployment, the wost since the 1930's.
Politicians making the recession worse on purpose.



This is one risk, unable to sell it and at least break even.
You could loose your house through divorce, a very real risk too.

If you can afford buying a house, that is it is no big deal paying for it. Could you say hey if it goes down 20% I'll just turn it into a rental and buy another house if you need to move, No prob buy a house. If it takes everything you make just to pay for it I would say no way, to much risk.

A couple more thoughts, how much should you put down as a down payment? As little as possible. Use the cheep low interest money to buy the house and reinvest the difference in something better.

Why do banks want a bigger down payment now? They, want to be covered if the house goes down in price and or if you decide to stop paying the mortgage.

how much you gain in a home is a function of how long you've owned it.

regardless of short-term economic fluctuations. remember that.

I can tell you that we are renting a house with another couple. Our rent is only $700, but so is the couple's in the basement. The guy that owns the house even told me that his mortgage is not even $1100 a month, so basically we are paying off his mortgage and he is making a little bit of money. I know a lot of older people that do this as well, they buy a house in a popular area and rent out the top floor and the basement. Then when the house is payed off in the future they sell it and it now becomes a retirement for them. Smart if you ask me.

On the good side, we are getting ready to buy our own house. Now when I make a payment at least some of the money is going back into the house and my pocket.

What if you lose your job, and have to relocate for your new job? You have to try and sell the house. If the house sits empty, you still have to pay for taxes, lawn care, electric, ect. This happened to me. Just recently sold the house. Lost about $20000 from what i paid for it. Not fun paying $10000 in taxes for a house that you dont even live in. A house is definitely a liability until it is sold.