After trying to rent for many years, I feel like the reality of renting is far different than what is talked about here. I'd like to give the other side of the story, and share my experience as a long-time renter:
Beware of buying - you'll have a ton of repair / upkeep costs.
Reality:
Major Repairs: I've rented my entire life. Very rarely have I needed a major home repair. I don't understand where this "you'll spend 1-2% a year on major repairs" comes from. The risk of major immediate issues can be greatly reduced by a proper home inspection. I understand there are still risks, but these risks are not as great as people make them out to be, in my experience.
Minor Repairs: If you rent a home, you don't magically escape paying the upkeep costs. Every rental company I've rented from expects me to mow the yard, upkeep the yard, clean the gutters, and to take care of trivial repairs under $100. This is probably different for apartment rentals. I actually prefer policies like the ones I've agreed to - I'd rather spend 100 bucks ever month to ensure I don't have a landlord in and out of our (sigh... their) house.
Buying a home is not an investment, invest your money instead:
Reality:
I don't need to move, and a mortgage payment is just as much as rent where I live. Therefore, I can either put my $1400/mo towards rent, or towards a mortgage. Why is putting $1400/mo towards rent more financially prudent than putting it towards ownership in an asset?
Other realities of renting:
- Rent prices rise much higher than taxes + fixed mortgage - My rent was $950, now its $1495, soon it'll be higher.
- Bad landlords - People seem to assume all landlords are great and will pay for everything. The reality is that most will nickel and dime everything, and will just do the cheapest fix possible to get you to stop complaining.
- Lack of stability - Want to put down roots? Sorry, the landlord wants his kid to have the house now, you gotta go.
- Sterile environment - It is not wise to put money into the house, because it's not yours. Therefore, you house is only as nice as your landlord wants it to be, and things are usually less home-y and personalized as a result.
- Unchangeable - you can't really re-paint or revamp anything, and it would be a bad idea to do so since it's not your house.
- High security deposits - rentals have "closing costs" too. they are called "security deposits". Most can be 1-2k depending on the house, and you will also need to pay your first / last months rent (3-4k), and potentially a non-refundable pet deposit, plus $50/month per pet. I've gotten my security deposit back like 50% of the time, it's definitely not guaranteed, and isn't worth going to court over.
- Random visits - hope you don't like privacy because the landlord can pop in whenever they'd like with sufficient notice (48 hours notice is still a huge hassle).
Final thought
Assuming you don't need to move in the next 3-5 years, I think it's almost always better to buy. I'd have at least 30k in home equity if purchased instead (I've paid ~ 50-75k in rent over the years).
Submitted April 21, 2019 at 04:07PM by zefcfd http://bit.ly/2VXKBlJ
