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In the OP's case, it may make more sense to rent than to buy, but given how high rents are, it's unlikely most people could rent something cheaper than they'd buy, unless they're renting a 1BR or something.
Yes it is always in the details. The OP just needs to run the numbers and see what makes sense. If the OP is thinking they will move out of state, then I'm more pro-renting. Not everyone wants to be an out-of-state landlord and that takes a lot of trust in hiring a good property manager. I've seen a lot of devalued property over the years owned by out-of-state investors that haven't seen their property in years.
As someone who has owned most of their life, at your age I'd personally rent. In fact, that's probably what we plan to do once I retire. My husband is totally neutral about ownership and we don't want to deal with the associated aspects of ownership like maintenance. We also don't want to be tied down to a location or even a property. Dealing with a one year lease IMHO beats having to deal with the pain of prepping and selling.
As someone upthread said, life isn't a balance sheet. As one ages, personally I like being unencumbered. A house is an encumbrance. Taking on a mortgage as a senior is an encumbrance.
I was just having this discussion with my husband in regards to our daughter. I went and found a mortgage calculator and on a 190,000 with current interest rate of 4 something % and as little as 5,000 down, the monthly payment would be around 700 a month. Rents for a house are running over 1500 a month. In her situation it is better for her to buy a home then rent.
If you can find a decent house at that price and a mortgage at 4% you still have to factor in monthly escrow of taxes and insurance.
But even if you end up at $1000 per month it's still better to own than to rent.
You're putting money into your own future instead of somebody else's.
I collected rent for 20 years on 3 houses. The equity I built up in those houses allowed me to buy a house for cash. All those tenants all those years contributed to my future instead of their own.
I collected rent for 20 years on 3 houses. The equity I built up in those houses allowed me to buy a house for cash. All those tenants all those years contributed to my future instead of their own.
Just curious on how you handle the sale of rental? Did you do a 1031, or just pay the capital gains?
Waiting for the OP to return to their own thread...
Thanks Norty! I'm still here, renting a room. This arrangement has been relatively inexpensive over the last 12 + mos but certainly takes a toll on quality of life. You never realize how much you just want to cook in your own kitchen, or binge watch tv on your own furniture on a rainy day...until you can't. It's the simple things, especially as we all age, right?
As many of us know, rates are up near 7%. Listing purchase prices have eased just a bit. Demand in the form of prospective buyers at open houses has decreased a lot but could be just due to the season and/or fewer folks looking to sell if they must then borrow at these high rates. I've also bumped up purchase price to ~$415K. (Plus HOA fees ~$400/mo.)
Rents: Rents are still CRAZY high. $2,300/mo. plus utilities.
Having trouble convincing myself that renting is the way to go. Sometimes think i'd rather just roll the dice and buy. And if rates hit 9%+ in the spring I'll look like a genius. lol. And we might not see significant reductions in rates or purchase prices for years from now. Then again...what if the bottom falls out and prices drop 20%+ in the next two years - making buying a costly mistake.
Definitely excited in a good way! Looking forward to getting back into my own private clean comfortable space with a kitchen and private bath, either renting or buying. One positive is having learned how little space i need to be comfortable. Very excited for the next place, right or wrong.
Thank you to all here for the great advice. Seriously. But keep chiming in as I believe there are many others in very similar situations, on the sidelines, between homes, in this incredible market.
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