Renting (vs) Buying

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Jabroniville
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Renting (vs) Buying

Post by Jabroniville » Wed Aug 16, 2017 7:04 pm

So I've been contemplating buying a place for a while now, largely because everyone I know who DOES buy recommends doing so. Weighing the pros and cons is annoying, though, and buying a place makes you kind of SET there. It doesn't help that I'm on the lower tier of people who can afford that sort of thing, which is a primary issue.

I mean, it's WAY more expensive to own. Condo payments can be pretty huge, so unless your mortgage is small, you're paying a ton per month. This spares you paying some utilities, I suppose, but those condo fees can always go up. Plus, you have to pay for any repairs and stuff like that out of your own pocket. Last year, when my fridge broke, I got a new one in less than an hour, free of charge, because that's what apartment buildings do :).

But that said... condo fees aren't likely to rise as fast as rent can. And buying a place means you can sell it, so that money is technically going to go back to you at some point.

What do you all think? What are you experiences with the pros and cons?

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Ares
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Re: Renting (vs) Buying

Post by Ares » Wed Aug 16, 2017 7:09 pm

If you see yourself being in that location for at least the next 5 years or more, buying is the better option, IMO.

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Goldar
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Re: Renting (vs) Buying

Post by Goldar » Fri Aug 18, 2017 5:53 pm

I heard on the news about 3 years ago that renting is much better these days than buying, a turnaround that had begun about 7 years prior.

Some points I remember mentioned we're the higher cost to own, owners need to spend money to fix and replace everything that goes wrong with a house, and that you are stuck until someone buys your property. That was a big concern mentioned because buyers often don't want to pay the price you list, dispite all the "goodies" you believe your home offers them. Then it can take years to sell or you might have to spend a lot of money in order to get the asking price you want, although at that point, people usually tack on the monies they just spent, further elevating their home price away from those looking to buy.

I Hope this helped some.

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Tattooedman
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Re: Renting (vs) Buying

Post by Tattooedman » Thu Aug 24, 2017 4:19 pm

To be fair a lot of the goodies most folks add end up being to suite their personal tastes - i.e. how rooms are decorated and things replaced (drywall, new light fixtures & such).

It's when you add things likee hot tubs, swimming pools, water softeners, or do total teardown redesigns of the rooms (like done on most renovation shows on TV) that you are adding "value" to your home.

Putting/adding "new" roof, hot water tanks, & furnaces are considered home upkeep & do not raise value. Most folks don't take that into consideration.

Personally, I bought my home 13 yrs ago & it's been way better than renting (which I did for over a decade). Granted I found a place that had already been mostly fixed up & have only spent about a grand fixing "problems" (needed a new floor & walls in my bathroom).

This past summer I had new railing put on my front porch, and while it looks nice it didn't raise the value of the place which you've got to have a working bathroom. So overall it's been a fair trade off IMO.

It's all about being realistic about what you want in a house & what you are willing & able to pay for a mortage (as my monthly payments are easily half tjat of paying rent).

Shock
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Re: Renting (vs) Buying

Post by Shock » Thu Aug 24, 2017 4:41 pm

One thing I'll add is that buying is a lot more satisfying than renting. There's nothing quite like having a place that you can say is yours.

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Arkrite
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Re: Renting (vs) Buying

Post by Arkrite » Thu Aug 24, 2017 4:51 pm

Yeah, that's currently my problem.
Me and my wife are looking for a place to live too, but at this moment in time I am wondering if I wouldn't be better off continuing to rent.

As it stands right now renting a nice place is actually cheaper than owning a place. Unless I get really lucky my mortgage is going to go up by anywhere from two hundred to three hundred dollars from my rent. Plus I'll be paying for land taxes and additional utilities that normally get covered by the owner.

Make it a little harder to deal with.
Also dealing with the bank for a Mortgage has been somewhat hilarious. What I can afford is literally a hundred and fifty thousands dollars above what they're pushing at me right now. And would put my mortgage payments another fifteen hundred dollars over what I pay in rent right now.

So, for starters, figure out what you can afford to pay before you go because the bank is going to try to upsell you. Figure out what you can afford to spend, and remember that you want to have money left over every month so you can save up to do repairs, upgrades, or deal with emergencies.

Nothing worse than getting a new place and being house poor. Which is to say you don't want to wind up in a situation where all your money is being dumped into the house and there's nothing left over for upgrades/emergencies.
Sounds silly to have to say that, but I know out where we live there are a lot of people living waaaay above their means.
People thought the big paychecks from the oilfield would never stop and, well, now we're recovering from a recession.

You'd figure that would mean people would be trying to sell their houses at a better price, but they're still inflated because nobody wants to take a loss on the house they payed way to much for.

I know the house market in our region is insane. Last time I looked for a house in Edmonton I wound up in a state of depression since the only thing I could afford was a crackden in the worst part of town ;~)

That being said, the advantage is that you can have a house suited to your needs.
I want to move outside of the city, I was born out the rural areas and having so many people around me at all times is kind of eating at me. I'd like to have pets, but without a good yard I'd just feel bad.
And I want to have kids, something that I cannot really pull off in a tiny apartment.

I have heard that the cost of the houses goes down the further you go outside the city... as long as you aren't really going east. That's generally where all the rich people live and, yeah, I saw a five hundred thousand house out that way that literally needs to be knocked down, burned, and built from scratch.
And that's what the guy selling it was saying!
But, yeah, location can be key. Acreages can be reasonably priced, but you may wind up with a long transit to and from work.
Inside the city I can't speak to, as much.

Really I think it comes down to the question of cost and personal desire.

Oh, I would suggest checking out multiple places for a mortgage too. Even if you have a place you want to go with you can use the rates from other places to bring down the rates at your bank/mortgage lender of choice.

MissRo
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Re: Renting (vs) Buying

Post by MissRo » Thu Aug 24, 2017 5:29 pm

Ares wrote:
Wed Aug 16, 2017 7:09 pm
If you see yourself being in that location for at least the next 5 years or more, buying is the better option, IMO.
This. My husband and I held off on buying for years because his job (and my former job) requires a lot of mobility. When we decided I was going to stay home with the kids (after I got pregnant with #3), we set down our roots.

One thing I'll say, and this might seem small but I really noticed it, is snow. Being responsible for your own snow removal really sucks. It's either expensive to hire somebody or backbreaking and time consuming to do it yourself. That's what I miss about our condo most.

Jabroniville
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Re: Renting (vs) Buying

Post by Jabroniville » Thu Aug 24, 2017 8:50 pm

Wow, lotta responses all of a sudden! Thanks, guys.

Yeah, my issue is that I have to use public transit, but don't want to get a bus pass (which would only ADD to monthly expenses), AND I want to live in Strathcona's area, which is pushing it into the expensive zone. There are puny, old houses here that cost $350K, easily. I figure 200K is good for most of the condos around here, but they tend to be on the small side (a 194K condo was only 553 square feet. For all my Dino Riders toys!). Some older buildings have larger units for around the same price.

I figure I can afford a hundred or two more dollars than I'm currently spending on rent... but not THAT much more. The issue is... I have no idea how rent will look in another decade. My old apartment was $800 for two rooms, then went to $1050 by the time we left. My single-bedroom has gone up from $800 (when I moved in) to $1075 after six or seven years. While I know a condo will have to deal with interest payments & land taxes, and the possibility of condo fees going up, it probably won't go up HUNDREDS of dollars over the course of a half-decade. Unless it can- I'm in unknown territory here :).

Arkrite & Ro: What are the tax benefits of home ownership in Canada?

MissRo
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Re: Renting (vs) Buying

Post by MissRo » Fri Aug 25, 2017 5:15 pm

I know there's a tax credit for first time home buyers. It was around 700 bucks for us, if I recall. There's a GST/HST new housing rebate you can apply for if your property is under $450,000. You can apply for rebates if you have to do renovations as well.

mrdent12
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Re: Renting (vs) Buying

Post by mrdent12 » Sun Aug 27, 2017 10:42 pm

I went through this same sort of coice when my wife got pregnant with our daughter now nearly 9 months old. While the immediate costs are lower for an apartment and all you have to worry about is utilities and rent, it came down to the long term for me.

For rent, once you pay it the money is gone and any tax breaks from owning property go to the land lord. Owning means you build equity and get all the tax deductions that go with owning. So why my mortgage is 600 higher than if I had rented all things included, come tax time I can deduct interest plus state taxes. In addition, if needed I can open a line of equity on the house. True, maintenance is a factor, but that is mitigated with warranties, home owners insurance, and the like. Also, you know what you are paying excluding hoa fees for 30 years if you get a fixed rate mortage.

In the end though it comes down to your budget as well. In my case, it meant sacrificing some things like fancy dinners, getting basic cars vs fancier ones, and the like. We aren't house poor though as someone already mentioned.

Flynnarrel
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Re: Renting (vs) Buying

Post by Flynnarrel » Tue Sep 26, 2017 11:02 pm

A month old I know, but I wanted a place to turn into a homestead and mini-farm. I couldn't do that as thoroughly as a renter. So it depends on what you want to do with it as well.
"Something pithy this way comes."

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