@seoulsearch In my opinion, owning a home is better than renting
as long as:
- you can afford the payment, property taxes, insurance, upkeep and repairs
- it's not a money pit (needs lots of repairs or upgrades)
- it's in a good area where property values aren't in risk of decline due to crime, proximity to environmental hazards, etc..
IF one can meet those 3 important criteria, the reason it's better is because when you sell it you get to recoup all the money you paid plus any equity. And if/when its paid off, it's paid off. You'll still have to pay taxes, upkeep and all that, but it's still much cheaper than renting a place of similar size.
That's true.
However if we had 30 yrs of rent payments, instead of mortgage payments, we would have exactly zero assets to show for the hundreds of thousands of dollars we would have spent on housing over the years.
Now, we have AT LEAST that much CURRENTLY available to us through Home equity loans.
There is NO such thing as renter equity. It's money spent, and money gone.
I definitely think it depends on the person (or persons') situation, especially these days.
I live in an area that is extremely expensive, and if you want to buy a house in an area that has a lesser chance of dealing with the homeless putting up tents on the corner (it's happening everywhere,) houses start at about half a million dollars. I am not in any way trying to put down the plight of the homeless, but the fentanyl situation is known to be so bad that even the police won't go to some areas.
I have family members who live in a what's considered a nice area across from several medical buildings, and a homeless village is forming behind their walled trash dumpster. It started out with a sheet draped across some branches. And now tents are going up...
The houses here are also built for families, which I do not have, so I don't need that kind of space, nor do I have the capacity to keep up with the yard and landscaping expenses, etc. Even if I mowed the lawn and did all the trimming myself, I'd still wind up paying for fertilizer, pest control, etc.
I have had a house before in other areas, so I do have some experience with what it involves. For myself, I actually find an apartment very freeing. When something goes wrong, I simply put in a maintenance ticket and am on good terms with the maintenance guy, who often answers my calls the same day. I don't have to worry about finding someone on my own in a each field (plumber, carpenter, etc.) who has enough skill and can be trusted within my living space -- it's all done for me.
I've done a lot of research on renting vs. owning and while I realize the numbers vary greatly, they say at today's prices, you'll only start to really get your investment back if you're planning to stay there 7-10 years, sometimes longer much longer. I don't have the luxury of thinking I'm going to stay in the same place for a long time because I go wherever my family most needs me.
I know the number one reason people say not to rent is because it's money you can't get back, but I recently heard an estimate that most homeowners have to pay about $1500 a month that they'll never get back either (maintenance, HOA fees, insurance, property taxes, etc.) Where I live, I'm sure that number is even higher, and if I'd already lose, say $2000 a month in money I can't get back, for me, it's worth it to rent instead. I love that I don't have to take care of a yard, and I get peace of mind in having help merely a text or email away.
I currently don't have any debts and I wouldn't sleep at night if I were suddenly chained to a half-million dollar debt plus accumulating interest, property taxes, sky-high insurance, and maintenance. For example, my apartment rental insurance this year was $125. I like the security of knowing (at least right now) that no bank has any power to dictate my life. And while sure, anything could happen, I'm in a complex so it's less likely that they'll sell the place out from under us and force us all to move.
The other thing about using a house to build wealth -- which I am all for if it works for some people -- but I never hear anyone talking about the fact that in order to actually make the money, you either have to rent out part or all of your house, or you have to sell and move. I've moved several times and it can be extremely expensive, along with taxes on the capital appreciation. Not to mention if you have to have your things stored if the sale/purchase/move-in date of a new place doesn't line up perfectly. Some of my family members have paid $30,000 in moving costs alone (granted it was across the country, but it's a reality for some people moving closer to family or to other areas.)
And that brings up the other thing I don't hear many people talking about -- even if you sell your house for a million dollars -- how much is left after taxes, moving costs, and buying a new place? Unless a person is really downsizing or moving to a less expensive area, their new residence might wind up costing even more than what they got for their original house. People also count on their houses appreciating in value -- but that's not always true. There's no guarantee that the price of one's house will go up, let alone enough to cover the costs of moving somewhere else.
I'm in a chat where lots of homeowners share their plights -- air conditioners that conked out and cost $12,000 to replace; a roof that needs to be redone; plumbing issues that cost an arm and a leg; flooding; property taxes and insurance doubling.
For myself, I know I could never handle all of that by my lone self -- so instead, I rent, save, and invest on my own.
I'm very thankful that for now at least, God has provided through renting.
I love it when people are able to own their own homes, but for me, it's just not a reality.