Brides Helping Brides ™ - Torn between renting and buying

091804bride Posted: Jan 01, 2004 06:20 PM

Torn between renting and buying

Was anyone torn between the choice of buying or renting? FH and I are both living at our parents homes now and probably could strech and buy a small home this year. My concerns about renting are interest rates seem like they may go up, houses aren't going to go down anytime soon on LI and if we do rent for 6 months to a year after we get married then we'll just have to move again if we buy a house later. Conversely, buying a home seems scary and I hope we'll be able to find something that will appreciate in value. Has anyone else found this to be a tough decision? Any comments/suggestions appreciated.Thanks.

peabody Posted: Jan 01, 2004 06:28 PM

Re: Torn between renting and buying

I suggest buying. We bought before we even got engaged officially. Best decision we ever made. I hated wasting $$ on rent. if you can do it, buy. It'a also an investment. Our house had gone up at leat $80 K since we bought it in 2001.

jennbaby Posted: Jan 01, 2004 06:37 PM

Re: Torn between renting and buying

Posted by peabody

I suggest buying. We bought before we even got engaged officially. Best decision we ever made. I hated wasting $$ on rent. if you can do it, buy. It'a also an investment. Our house had gone up at leat $80 K since we bought it in 2001.

I agree, if you can buy, then do it. If you can save and live at home, or wil FIL, do it.

drjenn10 Posted: Jan 01, 2004 06:40 PM

Re: Torn between renting and buying

Definately buy if you can it is one of the best investments you can make. Yes, the market sucks, but who really knows when and if it will get better. It is a great feeling to own a home.

AtticaQT Posted: Jan 01, 2004 07:00 PM

Re: Torn between renting and buying

Buying is a great investment. I would hate knowing I was throwing money away on rent when I could be using that payment to pay off a mortgage. FH and I are looking to buy a place before we get married.

091804bride Posted: Jan 01, 2004 07:11 PM

Re: Torn between renting and buying

AtticaQT how far ahead are you planning to start looking? Thank you all for your responses.

Sonicstef Posted: Jan 01, 2004 08:15 PM

Re: Torn between renting and buying

Supposedly the equation is that if you dont plan on staying in a home a min of 5 years, its not worth the costs of looking/closing, etc.. and renting is a better economy.

Kelly9904 Posted: Jan 01, 2004 09:44 PM

Re: Torn between renting and buying

FH and I are looking now to buy! we figure we can do it now so we are trying BUT, if we dont find something that we can be happy in for 7-10 years then we will NOT settle and will therefore get an apt!
Personally, if you can afford it, I think it makes more sense than giving someone about $18,000++ over teh life of a 1 year lease!

We are getting married in June and started looking (really looking) at the end of October.

Where would you be looking??

LIPrincess00 Posted: Jan 01, 2004 11:00 PM

Re: Torn between renting and buying

MY FH and I have decided to start looking for a house this month instead of renting. He has a daughter and by the time we rent a 2 bedroom for a year we could by a 2bdrm house.

butterfly20 Posted: Jan 01, 2004 11:31 PM

Re: Torn between renting and buying

i love buying because its going towards owning a house(asset)

papabear Posted: Jan 01, 2004 11:51 PM

Re: Torn between renting and buying

Posted by Sonicstef

Supposedly the equation is that if you dont plan on staying in a home a min of 5 years, its not worth the costs of looking/closing, etc.. and renting is a better economy.

WHAT?!?!

My brother and his wife bought a home and within two years sold it for 150% of what it they bought it for plus whatever they put into it. Don't know how 'renting would have been a better economy' - whatever that means...

Where did this supposed equation come from?

This 'supposed equation' sounds familiar in the sense of refinancing an existing mortgage.. if you refinance a mortgage to a lower interest rate and it saves you $200 a month on interest, for example, you have to divide your closing costs on the refi by the amount saved each month to determine how long it will take to recoup the closing costs - typically 5 to 7 years from my experience.

junebride04 Posted: Jan 02, 2004 01:22 AM

Re: Torn between renting and buying

I also think buying is the best way to go overall because it is an investment. Personally, I think renting is a waste of money, but then again everyone's situation is different.

Niecey Posted: Jan 02, 2004 09:12 AM

Re: Torn between renting and buying

I rented for many years and for a little bit after getting married while DH and I saved money. After getting engaged we moved in together in my small one bedroom to save even more money - so we were only paying one rent. I never felt like I was throwing away my money. Renting helped us save money to buy our house while having our independence of living on our own. We would have rented longer but we found our house pretty quickly in the search process. Now my mortgage is close to double what my rent was ever and my home expenses (furniture, repairs, paint, etc.) are way more than ever and we aren't really saving yet but love our home. I think it is a personal decision that you must really think about your finances to make this decision.

Jenn P Posted: Jan 02, 2004 09:21 AM

Re: Torn between renting and buying

Papabear, I've heard the same thing. While I can't speak for Stef, that logic probably refers more to averages over time than what's going on right now. If you buy and then sell again within five years...well, you're incurring all major costs associated with buying and selling twice. They're big enough costs that you have to consider them before any major decisions. By better economy she just meant cheaper in the long run. True, I'm sure most people would recoup those costs and then some on Long Island but this outrageous growth will not last forever.

Kelly9904 Posted: Jan 02, 2004 09:38 AM

Re: Torn between renting and buying

One thing that you have to remember in regards to holding on to a house for at least 5 years. This is true in a NORMAL market.

Papabear, if your sister bought her house before 2000 she probably paid ALOT less than if she would have bought it just a year or so later!

My brother bought his house in 1999 for about 160K, its a very large house, in a nice SD and nicely located. His neighbor sold his house in 2001 for 280K, its a smaller house. Now his house was just appraised at about 350! THats a HUGE return but if it wasnt for the turn in the market that wouldnt have happened.

They say you have to hold on to your house for that period of time becuase in most cases you are laying out say 10K+ for closing costs! Plus they figure you are going to sink money into new carpeting, painting, landscaping etc. In a NORMAL market, your house doenst appreciate 20K+++ in less than 5 years! To make it worth it to sell your house in LESS time you would need to sell it for what you paid plus cover any home improvements and your closing costs, otherwise you LOST money!

alina Posted: Jan 02, 2004 10:36 AM

Re: Torn between renting and buying

I think if you're looking to buy, you should stay in that place for at least 5 years. I have heard the same equation as Sonicstef. Also, when you look at renting vs. buying, renting gives you a lot of flexibility and you do have the ability to save.

House ownership can be expensive, with maintenance/taxes and many renters/first time home buyers don't always know how expensive it can get.

AtticaQT Posted: Jan 02, 2004 11:06 AM

Re: Torn between renting and buying

Posted by 091804bride

AtticaQT how far ahead are you planning to start looking? Thank you all for your responses.

We are looking for a coop because we just cant afford a house now (we dont want to buy a one family the expensees are too high - we'd rather buy a three family so that the renting of the other two apartments woudl virtually pay the mortgage but those prices are just too high right now in light of all our other expenses (wedding, car). We are actually starting now- we've attempted to see one since november but through a bad realtor and school and work it was put on hold. FH and I are actually going ot the coop management offices today to get lists of which units are for sale. We've heard that the listing prices through the offices are lower than the listing prices through the realtors.

palebride Posted: Jan 02, 2004 12:59 PM

Re: Torn between renting and buying

we're buying a co-op because the price was right and i'd rather have the possibility of making some money off it in the long run. i know that there's a chance that by the time we want to buy a house the property will have gone down in value...but it eases my mind a little to know that we could possibly have some extra money someday....
the mortgage is a huge pain....but i'm sure it'll be worth it. we didnt' want to do a house right away because that has a lot of added expenses and we're not ready for that right away.
i think buying is generally better than renting...but it all depsned on your situation. you have to have some money to put down (co-ops usually want 20%) right away, and when saving for a wedding, that's usually difficult to do!
good luck!!

LIJuneBride Posted: Jan 02, 2004 04:09 PM

Re: Torn between renting and buying

I've always thought that if you can afford it, you should definitely buy. You get tax savings (can you say BIG refund???) not to mention the personal satisfaction of knowing that it is yours. If your budget isn't as large as you'd like, look for a house in a neighborhood you love that maybe needs a little cosmetic work, and is also easily expandable (ranches and capes are good for this). I don't think I've ever heard of anyone losing money on a house in this area - it's a great investment. I was lucky enough to buy my house before I even met FH and we'll be living here after the wedding. Paying for a house and a wedding is not easy, but so worth it!