Buying vs. Renting

[AllyM1]

I don't know how many of you are home owners or renters, but my DH and I are looking to move out of our apartment and we dont' know whether to rent or to buy a condo.

Around my area there are these new build apartments and condos. They have a lot of amenities and it's in a really nice area.

Dilemma- Renting 1 bedroom 850 sq ft $740/month
Buy 2 bedroom condo 1300 sq ft $about the same a month

I know some people would say the obvious choice would be to buy but my concern is the economy and interest rates.

Does anyone have any suggestions or advice? Does anyone know anything about condo owning?

Anything will greatly help!

[Kacie_bride]

I don't really have any good, solid, technical advice on this. I know I would rather buy than rent.

[LaceyinPgh]

If you can buy it I suggest you do it. I mean renting is just throwing money out the window every month. When your lease is up, you aren't gong to recoup your loss. If you own, and take care of the property, you can recoup the amount of money that you have invested. THe housing market is starting to switch to your favor. Look into getting a fixed rate mortgage as well. This way you don't end up gettin gscrewed if the interest rate goes up. It will cost you a little bit more in the begining but the long term effect will be more beneficial.

[AllyM1]

Thank you Lacey. I kept telling my husband that we are throwing away our money. If we stayed in this apartment for 5 years at what we are paying, we would basically be throwing away $36,000 that could have went towards a house or condo.

Lacey, you said to look into a fixed rate. What do you think about doing a variable rate (not sure if that's the correct term) and if it starts going up drastically then do a fixed rate?

It's all so confusing! Maybe to some it's not that hard but I just get a little worried about all the possible outcomes good and bad.

[LaceyinPgh]

Thank you Lacey. I kept telling my husband that we are throwing away our money. If we stayed in this apartment for 5 years at what we are paying, we would basically be throwing away $36,000 that could have went towards a house or condo.

Lacey, you said to look into a fixed rate. What do you think about doing a variable rate (not sure if that's the correct term) and if it starts going up drastically then do a fixed rate?

It's all so confusing! Maybe to some it's not that hard but I just get a little worried about all the possible outcomes good and bad.

You are gambeling with the fixed rate versus the variable rate. We have always just had a fixed rate mortgage on our house. Which is good for us if you se how high the interest rate has gone up since 2001 when we refinanced to get that even lower rate. The thing to remember is this, you might get a great variable rate to start with. But, that can skyrocket with no warning whatsoever. But, you are still going to have to wait some time to refinance to that fixed rate. So you are still going ot be paying that higher interest rate for awhile.

[AllyM1]

Okay, I see what you are saying.. it makes a lot of sense.

Well I am going to see what kind of price we're looking and and rate we're looking at and go from there..

Do you think now is the time to start doing this? Our lease is up October 1st.

[LaceyinPgh]

Okay, I see what you are saying.. it makes a lot of sense.

Well I am going to see what kind of price we're looking and and rate we're looking at and go from there..

Do you think now is the time to start doing this? Our lease is up October 1st.
The housing market is starting to slip. So that is favorable to buyers and less favorable to sellers.

[hummingbird521]

I agree with Lacey on this one. I don't know anything about your area, but feel that renting is throwing away your hard earned money. If you can buy I feel that this would be best.

[blueeyedbride]

Okay, I see what you are saying.. it makes a lot of sense.

Well I am going to see what kind of price we're looking and and rate we're looking at and go from there..

Do you think now is the time to start doing this? Our lease is up October 1st.

There are alot of great first time homebuyers programs out there , esp. for Ohio residents

[SerendipityCrafts]

How long do you plan to stay?

It does not make financial sense to purchase a place if you are going to live in it for 5 years or less. If you have to pay the closing costs, taxes, the move, utilities hook ups etc. twice in a five year period, you aren't saving any money by buying.

So if you know that this is going to be a shorter term thing; rent. If it's going to be a long term home, it is better to buy.

Hugh and I are going through the same thing. We would like to move to another province but our jobs are here. If we buy and we do end up finding work in another province we will have to sell and then loose money. This is why we are still renting .... LOL and still looking.

[Jenn060306]

Buying definatly is a good thing. Esp. if the market is in the favour of the buyer over the seller. You can get back the money you've invested in buying and possibly more depending on the market when you sell.
Mark and i are going to purchase a house as soon as we can. Even if it is small. It's better in our minds then paying someone eles' mortage for them.
Good luck with your decision!

[CindySue]

How long do you plan to stay?

It does not make financial sense to purchase a place if you are going to live in it for 5 years or less. If you have to pay the closing costs, taxes, the move, utilities hook ups etc. twice in a five year period, you aren't saving any money by buying.

So if you know that this is going to be a shorter term thing; rent. If it's going to be a long term home, it is better to buy.

Hugh and I are going through the same thing. We would like to move to another province but our jobs are here. If we buy and we do end up finding work in another province we will have to sell and then loose money. This is why we are still renting .... LOL and still looking.
This is what I wanted to say. Buying is better, but there are so many factors in here. How many children, if any do you plan to have? If you buy a 2 BR now, and end up with 3 kids, youre gonna be a little cramped. And like Elizabeth said, are planning on staying where you are at for a while?
Lacey id VERY right though about the adjustable mortgage. A cousin of Brians had been paying just under $800 a month for her house and then out of the blue she got her statement and her payment had jumped to $1150 a month. Ours is fixed at 6%.

[AllyM1]

We really haven't talked about how long we will stay there. We don't plan on starting a family for a while. Even if we had one child we would be okay with a 2 bdrm.

I am going to see what I can find out today. I would say we would probably be there anywhere from 4-6 years

[rainbowtreat]

I agree with the girls when they say how long are you planning to be there etc. But a 2 bedroom for $750 is a steal. Well around here anyway. I needed a 3 bedroom (we dont have the credit to buy at the moment and not sure where we stand either) as I have a boy and a girl and they are getting older so they needed their own rooms. We pay $850 a month. But that includes heat and hot water. And for around here this is a steal. Most 3 bedrooms are closer to $1000 a month.

I would love to buy but Nicholas actualy likes having a break from owning. He lived at home and helped his mom with the bills and such and was tired of having to fix everything ( a very old house, lived there since he was born ). He likes the idea of if something breaks call the lanlord. Like the frindge dieing, they get you a new one etc. Good luck on your choice. Hope it is the right one for you.

[SoontobeMrsClark07]

FH and I are going to have to rent. Apartments here start at about $1300 per month for decent living (no crime, working appliances, etc.). Condos start at $300,000 so our mortgage would be significantly higher until we get a better down payment (we have $20k, but its not cutting the mustard). We definitely are renting.

If your payments are going to be the same, I would buy. I dont know what housing is like where you are, but here when you buy something and do any small work to it (replace the front door, paint, new hardware, landscaping, etc) or keep it for more than a year, you've gained equity on the house and can often sell it for much more than you purchased it for. If thats not the case where you live (meaning housing prices dont fluctuate like that) then I wouldnt advise you buying if you arent planning on staying for a long time. Of course with that said, if you are planning to stay for a long time, then you should probably buy because with renting, you are just throwing money out the window. It all depends on where you live.

Sorry if that doesnt make sense. It does in my head... I'm not a financial person so I dont know if thats right... its just my take on it. Sorry I couldnt be more help!