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Buying vs. Renting - did you regret it?
The husband and I are currently looking to possibly purchase a home before renewing our lease for a fourth year come August 1st. Unfortunately for our pocket books, we really love the area we currently live in, despite the sticker shock. Most of the homes near us cost upwards of $500k-$1mil. We can only really afford to go up to $300k and occasionally there are some smaller houses that come onto the market. (Before you ask, nearly all the home in a 20 mile radius are older than 50 years.)
Our deal on our apartment is pretty good for the area. We live near public transport (which is essential for commuting here) and our utilities are included. But we're running out of comfortable living space as we spend a lot of time at home and are itching for some yard to do gardening. And our apartment hasn't been updated since years before we arrived. Management is updating now as a few people move out, but we won't have that luxury unless we rent someplace else (which would probably be a 20-30% increase in rent and no guaranty on utilities being included).
Hoping to find a home in decent shape in our price range. But we are worried that we may regret moving from a building where utilities are included, any problem with plumbing/etc. get fixed by maintenance, etc. Did any of you regret renting vs. buying? Any thing we should consider that you hadn't when deciding to become homeowners?
Re: Buying vs. Renting - did you regret it?
I sort of do. We bought at the height of the bubble (in 2005) when buying seemed like such a great way to make a profit and we had 4 years of grad school left for DH.
It was nice to have the space, and the yard especially as the kids came along. It was nice to paint, have the tax benefits, etc.
It was not nice to have the bubble burst ;-) and now have a house we are underwater on and can't sell and are renting out since DH finished his PhD and we moved across the country for his job.
So, I guess I'd say if you really plan to stay awhile and can ride out the ups and downs in the market, go for it. But definitely consider the maintenance stuff. We are renting now and it is nice to call and get things fixed without paying for them....it's a pain to be the landlord paying for things on the other end. We are in both positions which is odd LOL.
I guess I should say that we are planning on probably living in this city for the rest of our lives. Considering our career choices, this is the best city for those of us to find jobs, and there are plenty of them in our fields.
As far as the house we'd be picking, we'd probably stay in it for 7-8 years until we have more than one kid (zero as of the moment).
As for market ups and downs... we plan on keeping some money back, at least $10k, to fall back on in the next two years in case of an emergency. Aside from that, we should be making more money than we currently do soon, as he will be getting a bump in hours and pay soon. Obviously one can never predict the future economy, but that kind of thinking could give pause for decades...
We don't regret buying but we got our home for a ridiculously low purchase price making our mortgage with taxes+insurance about 25% less a month then we were paying in rent.
Some things that I think have made us not regret buying...
-We went with a newer home (only 6 years old),the house was truly move in ready (walls were all freshly painted neutral tones, brand new carpets, new appliances), we had a decent amount of money on top of our emergency fund put aside to do all the immediate changes we wanted, we used a realtor who gave us back 50% of her commission towards closing costs since my Fiance is a police officer (she'll do the same if we sell and use her again)
The biggest thing is probably that my fiance is handy around the house. He can do mild plumbing, electrical and construction work on his own. My father also works in construction and has helped with a lot of things. If we had to call a handyman with all of the small things that needed doing then I could imagine getting frustrated with home ownership.
October 13, 2012
We're holding out until we buy a house we can stay in long-term (30+ years). I feel like the mentality of the "starter home" is risky because you never know when the market might/will tank and you could end up stuck (as has happened to many people we know).
That said, DH is finishing his PhD this year and once we move wherever we're going we plan to rent either a townhouse or a single family home. It will cost more in rent than a small apartment would and as a result take longer to save a down payment, which we're well aware of, but I'm *done* with apartment living and need a yard and a driveway. I figure we'll rent for 3-4 years, save a down payment then buy our "forever" home. We do plan to rent in the town we will eventually buy in so the kids don't have to change schools.
Container gardening is one solution. Is there a community garden in your area?
Ask the landlord if you can move into one of the renovated apartments or to a large apartment when one becomes available
Do NOT buy unless you are in a good financial position to do so. (Have downpayment, closing costs, moving costs, start up costs, repair decorating costs, yard items as well as ladders, tools etc. Plan to have a good emergency savings as well in addition to the above.
It sounds like your current situation is very good if you get creative about space (get an IKEA catelogue for ideas) .
Some advice that I was given while house shopping for our first nest:
- Get the smallest place in a nice neighborhood.
- Find a neighboorhood with a history of a good real estate market.
- Have 6 months of income in savings.
Those were good first advice words for us. Remember real estate is LOCATION LOCATION LOCATION, as you already know.
If most homes in your area go for $500-$1M, you're not going to find something habitable at $300. You're either going to buy a fixer and spend the rest of your life paying to have it redone or move far out of your ideal location. Don't do either.
Your apartment sounds like an incredible deal and I'd definitely ask the landlord to do the upgrades to your apartment since you've been such a great tenant.
I can guarantee you homeownership is a helluva lot more expensive than a 20-30% increase on rent. You have more sq ft to heat and cool, you have lawn care expenses, you have to furnish the place, you have to pay for repairs, the list goes on. We're much like the first poster - got bit bad by the market and are not happy with the losses and costs we've had.
My Pinterest
The Googlesites Paint Bio
Thinking of doing cosmetic updates to a dated home? These were our costs.
We also can't really move elsewhere, into a different building or a rental home because of our pet situation. We have a rabbit, which is a big no-no to most renters, and our current management is the only place we've been able to find that'll let us keep her. It's here or a home.
Your area and situation sound very much like us and I do not regret buying. We bought in the town I grew up in and we want to stay here (if not this town, this area) for a long while. It's a very HCOL so while people will often say they want to buy a 'forever house' sometimes in HCOL it's reality to go in with a starter home.
We bought a 3BR 1.5 bath 1.350 sq ft 'starter' home in a great school district so that IF we are here longer than planned, we're fine school-wise (even if we're squished on space).
Also, FWIW, our mortgage plus taxes plus commutation costs is almost exactly the same as our rent was in NYC. Granted, we put down a lot on the house but still. Of course, mortgage/taxes, etc aren't your only costs and you have to think of things like heating, maintenance (our oil burner was young and fine at inspection and failed in our first year living here - that was $8K alone to repair...).