I really want to create a Live w/rents vs Buy Myths thread now but I know Fry will cry because it puts sand in his vagina. 
Easy they arenât looking profit vs loss. They are only speaking dollars out of pocket. Then they are using a typical home and comparing it to your average shoebox apt building. So they then in turn think they are saving money but forget we get to go to out 3-4 beroom 2,000 sq ft. homes at the end of the day and they ummm well its takes three steps from kitchen to bedroomâŚCONVIENCE IS ON THEIR SIDE YAY!!!
that is the truff, renting in WNY if you plan on being there 3+ years is dumb, renting other places is significantly cheaper and a better decision than buying, unless you can afford to buy the building you are in. Granted I still plan on buying this summer/fall
I wouldnt call it a better decision i would call it doing what you can afford. I live out near Seattle when in the states and i rent as well. But its certainly not because buying a home would be a bad idea it is because thats all i can afford out there.
FYI, I did not write the post, nor necessarily agree with it. Just thought it would make a nice discussion.
nvm, you voted.
someplace like California that could collapse the housing prices anytime, or a place that offers a 100 year mortgage, investing the difference between renting and owning will result in better returns, same as NYC.
NYC real estate =! Caliâs markets⌠two different models. Space is undervalued in NYC if anything.
Yea you are right. I guess if the place is subject to a very volatile housing market it would make sense.
Word supply and demand is a mother fucker. I donât see NYC housing ever having high excess in supply without demand but hey 5 years ago if you told my id be sitting in Iraq i would have told you to lick my ass.
this is going to fail as much as the O.P.;
Myth #1: 'Renting is Like Getting a Turbo Kit Every 6 Months
Buyers throw their money away for the first five years they own a home, because they simply give money to the bank for the privilege of borrowing money. 'Renters, on the other hand, pay for one thing at a time every month: turbo, injectors, intercooler, siq rotas. They donât pay interest to the bank, property taxes or maintenance fees, or even food.
Smart renters run 12âs. Since the average renter saves hundreds of dollars every month, they can afford to invest in st00ks, boosts and other vehicles.
Myth #2: There are Tax Benefits to Owning
Contrary to popular belief, buyers can only claim you until 21. Even if you are âdependentâ.
Mortgage interest can only be deducted from taxable income. This essentially means that buyers pay a dollar just to save 30 cents.
Furthermore, deducting interest has no tax advantage unless a buyer pays so much in interest that the amount exceeds the standard deduction that everyoneâincluding rentersâis allowed to take.
When it comes to owning, nothing owns more than a boosted hatch. Since 'renters are not required to pay anything on the property they 'rent, it seems downright foolish to factor not get forged pistons and crank.
Myth #3: It Doesnât Cost Any More to Buy Than It Does to 'Rent
People can usually 'rent a home by mommyâs sympathy, daddyâs failures, and possibly a donât throw me out deposit (a âprojectâ car tying up the garage is perfect for this). All the money that is paid initially actually goes towards a lightly rusted shell, with the exception of the stock block, which is nearly always returned to the 'renter in the end.
When a parent buys a home, the money that is paid upfront is more significant and may or may not be seen again. For example, a parent must pay for groceries (typically tweenty percent hot pockets) and utilities(typically being used more in non peak hours) before being called a homeowner. This 11 percent âinvestmentâ ensures that the home must appreciate by at least 11 percent before the buyer can hope to break even.
A buyer is responsible ,a 'renter is not.
Myth #4: Buyers Have Assets, 'Renters Do Not
At best, buyers have depreciating assets and slow cars. Home prices are falling in nearly every area of the country. An estimated 50 percent of buyers are in the 17âs.
Homeowners who have been paying on their homes for ten years or more have been seen disappearing in the rear view.
'Renters may not co-own a home with an owner (although the owner will co-sign new car loans), but this doesnât mean that they donât have assets (yes it does). Many renters have a large and prosperous portfolio, boosted Proteges (just an example) and other assets that can be sold IMMEDIATELY for cash. The reason they own these things is because they havenât been paying a lender to ârentâ money so that they could pretend like they own an asset.
Myth #5: Houses are a Good Investment
During the housing boom, everyone thought that housing was a great investment. Many people bought under the assumption that home prices go up, not down. Try and find an aging and ailing relative that bought into this.
Soon enough they will pass away leaving no work to you to own a home.
meh, got bored with itâŚ
Interesting points and a bunch of reasons why I have been renting instead of buying a place here.
People say you build equity by having a home but tell me this⌠how much equity do you have if you owe 200,000 on a house worth 150,000?
if you were dumb enough to sign for such a mortgage, well, you get the idea.
:zong:
âWow. Buying is better than renting, so buying a lot is a lot better than renting.â
signs $247,000 dollar mortgage on $40k salary
Itâs people using those truths as a way of justifying bad decisions that ruined the housing market.
Keep renting, property owners like misteroman$$$ need you to pay for his ZR1. :lol:
So⌠big down payment or no down payment?
Say you have $20k in the bank⌠and youâve been saving it for a house⌠but now interest rates are 5% (ish) ⌠are you better off investing that money elsewhere or putting it down on a $150k house?
I dunno the last house I owned was a 40,000$ brick house corner lot with a detached 2 car garage 1000 sqft and a dry finished basement.
The mortgage was 288$ a month.
I now pay 750 a month rent (nicer area) for a small 4 bedroom 1 story house with a garage big enough to fit a car in, if you only open the drivers door 1/2 way.
Owning > renting.
But if you ever wanna move, breaking lease is sooooooo much cheaper and easier then trying to sell your house.
this is off topic but i just had to quote your sig.
Buying>Renting.
First of all, I co-own a title company and I own my own real estate investment company. I have a BA in Law from UB and 9 years of experience in the real estate/mortgage industry.
When I first broke into the business I was closing mortgage loans at around 10 - 11% interest and that was for people with âgood creditâ. Today good credit (680 fico or better) can get you between 5.75 - 6% interest. So overall there is already a benefit just in rate reduction over the past 9 years.
Also, the myth about closing costs⌠SELLERS pay the real estate commission, it is clearly stated in the NY State Bar real estate sale contract (and in FL and just about every other âtitleâ state), title evidence (search, exam, ownerâs title insurance, etc.) and the survey is also the SELLERâs responsibility. So the claim of 5% overall closing costs and 6% to the realtors is FALSE.
The most expensive part of buying a house and where a MAJORITY of closing costs come from is when a lender is involved. Cash transactions typically have WAY less closing costs. LENDERS charge discount points, closing fees, appraisal fees, credit report fees, etc. etc. which is usually around 2% - 3% of the loan amount in closing costs.
The problems stated in the original post are mostly attributes of the âZero money down, adjustable rate, stated income and interest only mortgagesâ that are now not available due to the reformation of the mortgage industry. For instance, here in FL the housing prices shot up DRAMATICALLY in the past 5 years due to the thriving market and demand. Lenders were giving loans to people with a heartbeat who could sign their name because housing was appreciateing so rapidly they took a calculated risk that if they had to foreclose, the house would be worth more or as much as the original loan amount.
The problem is, buyers who were either ignorant, stupid, or both signed up for loans they could NOT afford when the rates adjusted or when the interest only period expired. Also, without putting money down adn paying interest only, people had no EQUITY into their homes of their own and when the values of homes declined in recent months, they were unable to refinance due to houses not appraising at original value.
Buying a house still is the best investment. If you look at the past 30 years overall as a whole you will see that houses typically appreciate at a rate of 100% return every 10 years, even with ups and downs in the market. If you put the same money into say a money market you might get a return in 10 years of at best 5%, stocks and mutual funds at about 11%. BUT, you should diversify and not put all your eggs into one basket either.
Owning a house builds wealth over time, typically homeowners who are responsible with their credit have a much better credit rating than someone making the same money with similar debt who does not own a home. Also, home equity lines of credit have a much better rate then unsecured loans and you can use the equity in your home to pay off high interest debt and consolidate debt into a more manageable payments and save yourself anywhere from 10 - 15% in interest. I can proudly say I that I have NO credit card debt and with my credit (which is in the 700âs) my credit card rates are around 11 - 12% and I still only use them as needed and typically pay the entire balance every month.
The best thing you can do when buying a house to make sure you are in a win/win situation (even in this market) is to PUT MONEY DOWN when purchasing. At minimum 5% is required by lenders now for purchases. If you can afford it put down 20% (that is the âmagicâ number) because you will eliminate PMI (private mortgage insurance, which all lenders require unless you have 20% or more in equity into your home and it will save you at least 2% of your loan amount in PMI).
Search around, shop lenders and rates and right now you can purchase homes under market. I am loooking at another property here in FL for my investment company to âflipâ (and no, it is not like the partially bullshit TV show) that when all said and done, even in this market, I could stand to make about $35,000 in about 3 months or less (already even have a buyer lined up). Donât be afraid to look at short sales (pre-foreclosures), REOâs (foreclosed properties) and distressed properties⌠they have so much potential equity into them if you know what you are doing and buy it in the right location. Do your homework and research, talk to someone who knows what they are doing and have no fear, you will end up over time much better off owning than renting.