Rent vs. Buy for Us

This has been debated about for years and there about 1 million different calculators out there to help you figure this out. Rent vs Buy. I think every situation is different and each person or family should look at what they can do and what they can afford and go from there. Our rent is currently a little less than $1,100/month, add a few hundred more and we can afford a decent house so I think its time to go. We are shooting for 2 years, if our finances and our lives are in order Lord willing. It takes a lot of planning to make the move so we are getting an early start.

I don't think of renting as "throwing away money" as some people do. In some cases its all you can afford. Some people listen to this advice and stretch out every last dollar they have to make a mortgage payment. This not only adds stress to your everyday life, it takes away from the enjoyment of having your own house in my opinion. Soon you'll start with the "damn house is sucking me dry" or "I'm working just to pay the bank", where if you would have stayed in your rental you could afford that chinese food you've been craving (love me some chinese food). When you rent, your paying a landlord to provide you with shelter for you and your family, your not throwing money away.

Now if you can afford it without stress and without sacrificing too much, I think owning has many advantages over renting. For one, even if your house does not appreciate one dollar and maintains the value it did when you purchased it, you build up equity over time. In case of a cash crunch, you can take out a home equity line or even refinance and take some of that equity out. You can't really do this with an apartment. You can keep a savings account for emergencies (emergency fund) but with a house you can have both. Second, it's yours. Well its really the banks until you pay it off, but you can do what you like with it. Knock down a wall, change your cabinets, put a poster of Van Halen out in front. This is really your home. There's a certain sense of accomplishment and purpose I think you get from owning property. It's part of the American dream dammit, let me live :)

Now the drawbacks are there too, its not all roses and "look at me I have a house".
When you rent, you call the landlord when there's no hot water, a window breaks, or god forbid there is a problem with the plumbing. In your house this is your problem. There is no one to call but a repairman which you have to pay for. If there is any maintenance needed, its on you. Water heater has to be replaced, you pay for it--if it snows, you have to shovel--leaky roof, you might as well line up that 2nd job cause it going to cost you big time to replace the entire roof that the seller failed to mention needed to be replaced. Of course your inspector saw nothing wrong with the roof, now you have to take him to court...sorry ran off for a second there :)

Again if you can afford it, and can plan well and budget these expenses in with everything else...Go For It. I have an uncle who works parts time as a contractor, makes about $3,000 month but it varies. His mortgage payment is over $2,600/month. His wife works also but he is pretty much on hustle mode every month just to make the mortgage, this is what you want to avoid. Renting was no problem but he wanted a house to sort of "keep up the Jones'". My wife and I are working out a budget and savings plans now, 2 years ahead of time before we even start looking. My wife is a great planner and she has shown me the magic of making lists and clipping coupons, she really was the last piece of my puzzle. I can't thanks you enough mama, I love you. Hopefully this all works out and in 2 years I'll put up some pictures of our brand new home. Figure it out for yourself which side you stand on, Rent vs. Buy.

So if you really want it, plan ahead, don't rush. make sure you can afford it and take the leap into the sea of debt :) If you can't, keep renting. It's not a waste of money if you have somewhere to live and someone you can call to make repairs when needed. Make sure you are putting something in that savings account in the meantime though, your going to need it for those emergencies. I said it before, ING Direct can take the money straight from your checking account for you, no hassle. Just though I should mention that since they've been so good to me. They offer paperless checking too with that Electric Orange account. I'll try to review that later. Anyways...

Thanks for reading

I Love You Baby

2 comments:

  1. moneymonk said...

    Same here, renting is not bad, at least you do not have a bucket of debt on your shoulders. To each it's own.

    Owning a house is not for everyone. If you travel a lot or constantly changing jobs it may be better to rent, but if you have a family a good career and plan not to move across the state a home is more beneficial.

    When me and my husband first bought our home, The first year I must admit it was a struggle. Because unlike rent, we had extra bills, ie trash pickup, taxes, insurance, HOA fees-- unexpected.

    So it always be to look before you leap.

    By the way, we also have a 9 month year old girl.

    Peace, my brother !  

  2. Christopher Smith said...

    Renting vs. owning is a question of timing in many markets. If you're in one of the areas where $500k buys you a starter home that needs a little work then you might be better off renting.

    However, you have to get into the game eventually. Long term, it's difficult to envision a road to financial health that doesn't involve owning a home.  


 

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