How long can you rent and still find it makes more sense than buying?

Asked by gabriel palotas, Pompano Beach, FL Mon Sep 27, 2010

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Dp2’s answer
Dp2, , Virginia
Sun Oct 31, 2010
It depends. Renting is the best option for some, and buying is the best option for others. For someone who travels a lot for the job, it might make more sense to rent. For a teacher, it might make more sense to buy.
1 vote
Anna M Brocco, Agent, Williston Park, NY
Mon Sep 27, 2010
BEST ANSWER
Until mobility, flexibility, and freedom from debt become tiresome....
1 vote
jo, , Hollywood Hills, Los Angeles, CA
Sun Oct 31, 2010
If you got champagne taste and beer pockets, then the home you want will always be a dream. But if you can be sensible, then there are bargains abound. Gabriel, if you want to buy a home here in LA, give me a call, i'll be happy to help you out my friend.

Thanks,
Nicholas
1 vote
Traci Bates, Agent, Los Angeles, CA
Wed Oct 27, 2010
There's a lot to look at when you're thinking of owning a home. Some people simply look at the mortgage payment vs. rent and if it's practically the same, they think that they are good candidates to become homeowners. In addition to some of the other obvious factors like having enough money for your down payment and closing costs, you also need to look at things like mortgage insurance, homeowners insurance, property taxes, property maintenance (plumbing, electrical, roof), etc.

Owning isn't for everyone but if you can come to the table prepared for all of the expected and unexpected expenses, then it makes sense to buy.
Web Reference:  http://www.tracibates.com
1 vote
karen numme, Agent, los angeles, CA
Sun Oct 3, 2010
In this market buying is a very smart move but, there can be many variables. The first one being do you have a down payment to purchase. Can you be pre-approved for a loan. If all the pre-requisites are in order then real estate is a great investment. Of course another factor is the tax breaks you get that do not come with a rental.
I would be happy to meet with you and discuss the adv. & dis.advantages of buying vs.selling. Feel free to all me at 323.804.2008. I'm a realtor with a Masters in Architecture.
Thanks,
Karen Numme
REAL ESTATE re-envisioned
Keller Williams Realty http://www.realestateangles.wordpress.com
Web Reference:  http://www.karennumme.com
1 vote
Felix Hung, Agent, Huntington Beach, CA
Mon Sep 27, 2010
Great question Gab!

Although generally speaking most in our profession believe that renting is a waste of money. When I advise clients, it's tailored to their needs and goals. Similar to what Terry Bell said, each client has different and unique financial goals. I walk them through their goals, ask them a bunch of questions and then I go over all possible outcomes and the pros and cons of each.

Some question I would ask:

Why do you want to buy and why now?

How will buying get you to your financial goals?

Have you spoken to a lender to get preapproved for a mortgage?

Does your mortgage buying power equal what you want in a home?

Are you comfortable with the payments?

Please talk to your CPA about your specific tax benefits of home ownership and your projected savings.

What worries you about not buying now?

When do you plan on moving?

What would you do if you lost your job or got laid off?

How many months of savings do you have?

Do you have a business/work from home?

Please consult with your CPA about possible tax benefits so we can compare renting vs buying.

I can't predict the future, so I don't know when we'll have appreciation and at what rate. I can look up historical figures that set average appreciation between 4-6% annually per year, but that's the best I can do. Are you okay with staying in this home for X number of years if necessary before your home appreciates in value?

When would you want to sell?

What do you think you'd make after selling this potential new home?

I'm sure there are more, but it's easier to analyze with a real situation with human interaction.

Great question! Hope lots of our colleagues respond.
1 vote
JD Songstad, Agent, Santa Monica, CA
Mon Sep 27, 2010
I would recommend trying some Rent versus Buy calculators that help you break down the numbers - see Web reference link. With prices down and very low interest rates you can get a lot of home for your money.
1 vote
Terry Bell, Agent, Santa Rosa, CA
Mon Sep 27, 2010
Like diamonds, not all possessions are ruled by practicality or formulas. A home is an extension of ourselves and a way to display our uniqueness in the world. Practically speaking, it is probably a better tax write off to have rental properties that you can depreciate the value of your property for significant tax advantages, and live in a small apartment ala Howard Hughes! But most people tire of rules of what you can and can not do in someone else's house, asking permission to paint or put up a shelf, owning property also is a declaration of independence! Ownership is a trait long ingrained in the human spirit akin to capitalism! Run, do not walk to the closest loan broker, and get your preapproval letter and declare independence! Best, Terry Bell, Realtor, Sonoma County Wine County, CPS Real Estate, Santa Rosa, CA
BA in psychology, legal assistant and homeowner and rental property owner!
1 vote
Cheri Bright, Agent, Santa Monica, CA
Tue Mar 5, 2013
If your rent is equivalent to what your dream home's mortgage would be and you can afford that mortgage payment, then I would say at this point you should consider owning versus renting. Why spend that money paying your landlords mortgage when you could be paying your own.

However, in owning your own home there is a lot more financial responsibility such as property taxes. These are currently at 1.25% of the purchase price of a home. If these factors can be justified financially then it's time you invest in buying your own home and stop renting.

So if you are ready, invest in your future not your landlords and call me! I will find you the best option.
0 votes
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