Over the same period I'd guess you'd loose about 5% more by renting than buying, maybe 10% over 5 years. 10-15 years is when you can walk away with a check bigger than your down payment and sometimes hit if the market does change upwards or you just made a good buy, or found the right buyer etc. But, if the market goes down again you could be writing a check for more than your down payment to get out of it... unless you want to ruin your relationship with Experian, Equifax, and Transunion and short sale. I believe there are still ways around this thou buy buying the house in an entities name etc. My worry is that housing prices will be the same in 20-30 years and renting will then be cheaper than buying. Labor rates are skyrocketing in China, they're bustin' their ass and half our country is high on welfare. I think the Carolinas are a great place to buy thou... a lot of people will want to go there to retire in the near future I think because of the lower cost of land but still being near a coast. My point is more that buying in my opinion is about the same as renting financially and the risk is pretty high to buy and there is little risk in renting. With renting you can get out a lot easier and with buying I think generally in most markets you need to have your place for sale for a good 6 months for it to sell. I think so many people invest in real estate(their home) because everyone needs one, financing is easy to get, and it's a sort of cool thing to do in society. As far as investing goes, I think there are way better things to invest in. Now if you're raising a family and have children that's a totally different ball game and a stable home in more ways than one is invaluable... if I'm saying that right. Then we get in to school areas and so on and so on. I think you made a good buy under $150k for a home is awesome and if you ever need to move or you loose your income or whatever you should be able to get out without an unexpected big expense or ruining your credit... although renters can be a full time job sometimes but that all depends. I think in your case it's a good move... now buying land and building... that's even better if you're able to manage people well. I think people say the rule is you should have at least a year and a half of mortgage payments in savings and your mortgage and other home expenses should be around 40% of your income. That sounds about right I think.
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Originally Posted by rb25s13vert
But how much would you have lost in rent over the same period? Plus you should never invest in a house for anything less than 3-4 years if your looking to make any sort of profitaside from flipping which im not even going into. But you are correct in that if you are looking to sell before the 4 year mark you very well may only break even, but that to me is still better than paying off someone elses mortgage, i dont think paying rent on time is reported to credit agencies. i mean really look at monthly mortgage rates compared to what you will typically charge someone for rent to live in the same house. i know around these parts, your monthly mortage might average 1000 but people are routinly renting those places out for 14-1500 monthly. granted there maintaining the property. but who is going to make out in the long run on this in a perfect world? im sure there are reasons to rent over buying a home, i really cant think of one other than if you move alot. i would say not having to maintain your yard, but unless you live in an apartment that doent always apply, ive even seen scenarios were someone was renting a house and it came with a washer and dryer, however it became unoperable, but because it wasnt on the lease they had to replace it, but they were allowed to keep it upon there lease ending. i would say that anyone who purchases a home on a whim with no reserach being done is a fool, and a fool and his money are easily parted. but i would chose buying a home over renting almost every day of the week. Sorry for the horrible grammor and super huge paragraph.
As for the interest and principle your right, your first several years payments will primarily go towards interest. and most investemts are risky. but what are things that people will always need. land and shelter will always be on that list. And i certianly wouldnt want to buy a house at the top of the market. but its still low right now and on the upswing, so now is a good time to get in if your asking me. i got my loan (VA) 0 down, with a 3.62% with 1 point. its not the best, but it certianly isnt the worst. fingers crossed on it being the right move.
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