New answers tagged housing
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I struggled with this dilemma for several years before I finally put an offer on a house. The following is just my personal experience (in the last 12 months).
In my case, my rent had increased by nearly 50% over 6 years ($650 to $940 per month), while my paycheck remained stagnant. My lease renewal date meant that shopping for a home would need to happen ...
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I honestly think buying is better than renting. When you rent a $2K/month apartment for example, it adds up at the end of the year and that is money spent. When you pay a mortgage for a house you have bought, that is money that goes towards your house which you own. It becomes an asset. Even though apartments have better maintenance and when things break ...
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It is possible to perform an economic calculation. Suppose an individual has $100,000 saved for a down payment. You can calculate monthly cash flows for buying and renting.
Rent CF = -(Monthly Rent) + 100,000 * (monthly investment return)
The initial costs to rent are fairly low. There's also value for the 'optionality' implicit in a short-term contract (...
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When taking mortgage you are exposed in the long-term to the risk of interest rates. While they are very low (or even negative!) now, this historically was not the case. See this chart for example: https://www.macrotrends.net/2015/fed-funds-rate-historical-chart .
It is difficult to predict interest rates in the decades ahead, so the balance of mortgage-vs-...
-1
There are risks either way, rent or buy.
FYI the definition of risk I am using is: % chance of a thing happening X size of impact
Risks of Renting
Crazy landlord
Room mate steals your stuff
Locked into a long lease
Rent will go up over time
Rent Money is gone with no extra benefit (you get a roof over your head either way) This can be considered an '...
0
One less thought about reason to decide to rent is that sometimes the market is "at the top" (seller friendly, not buyer friendly) and one might prefer to wait for the inevitable sag in valuations that WILL occur.
Why buy "at the top" when you have no compelling reason to do so?
(The above's pretty clear, but to be sure, say a given house ...
1
The other answers seem very US centric, so here some thoughts for western-europe:
Buying is the better option in the long run. As others mentioned, you have a lot more responsability compared to renting, but some of those concerns are under false assumptions (at least here in EU):
maintenance cost: When renting property, you pay also maintenance (like water,...
8
There are already great answers that cover most of it. Here are a couple of other considerations.
Be sure you understand the cost of ownership. The other answers have covered this pretty well, but make sure you calculate the actual cost of ownership. This will include your mortgage, maintenance costs, insurance and taxes at a minimum. Depending on where/...
22
Buying means you are taking on the risk associated with the price fluctuation of the property. If the property goes down in value, it's possible you end up underwater on your mortgage when you decide to sell - or when you have to sell. Even if you're planning on buying one property and staying for the long term, you could have a major health issue, or a ...
-1
My opinion is that buying is inherently better than renting. When you pay rent, that money is spent. All of it goes into the pocket of your landlord. But when you make mortgage payments, you are essentially paying yourself. Every payment builds capital (minus the interest to the bank, of course). At some point you will own your home, which means that you ...
50
There are a few economical reasons to rent instead of buy including if the cost are similar.
The first is that you anticipate that you might be moving soon. It is typically expensive to transact real estate and this would include closing cost and loan origination fees. If you know you are going to be moving in a year or two, then it is probably better to ...
4
For buying a home, what kind of loans can I seek with a large cash collateral but no credit history?
I'd suggest going to speak with a mortgage broker* in your area rather than going to a bank (and particularly not a credit union). Mortgage brokers have relationships with a number of different lenders and are likely to have a relationship with a lender that will do a loan with a non-traditional credit report. Credit unions are awesome for banking but tend ...
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