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Mistake to keep renting

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  • Mistake to keep renting

    Is it ever a big mistake to keep renting? I've come across many threads about mortgages (too big?), when to buy (now vs rent for several yrs) etc but are there any folks that are long term renters here?

    Renting in a nice new building has its pros and buying a nice house with a yard also has its pros, but it's a difficult comparison for me as both are equally appealing. Also, because of this, the rent vs buy calculators arent quite an apples to apples comparison (apt in a nice building vs house and not renting a house vs buying a house) because I wouldn't want to rent a house.

    Are the only downsides not being able to take the mortgage deduction and missing out on appreciation?

    The thought of being shackled with a 15 or 30 mortgage is also unappealing.

  • #2
    What's wrong with renting a house?

    At any rate, if you're in a stable job situation and a stable social situation, and in a reasonably normal real estate market, buying is the right move. The reason why is obvious. A landlord must cover all his expenses and make a profit. When you own, you're the landlord too.  You still must cover all the expenses, but you get to keep the profit.
    Helping those who wear the white coat get a fair shake on Wall Street since 2011


    • #3
      I think it is a mistake to buy a house if you are not convinced you want one. Renting gives you the continued option to buy whenever you want or if the "perfect" house comes along. The best thing about owning a house to me is knowing the monthly mortgage payment won't change. I don't generally see renting as "throwing money away". Don't buy a house just to get a mortgage deduction or for the appreciation (investment).  What does your spouse think?  Does he/she want a house? Do you plan on moving or changing jobs in the next 5-10 years?


      • #4
        i only see docs making mistakes buying has a commute that is killing them but they are stuck!


        • #5
          <5 years - rent.  even in high appreciating market 3 years is the outside marker IMHO.

          But you have to ask yourself - are you an owner type or renter type?   We've only rented during residency and 1st year out.  Settled down into 1st home for 3 years, then 11 years (with major expansion) and another 4 now with probable renovation in 2-3 years.

          Home ownership can be money pits, but it really depends on whether it's just a place to rest your head or something more.


          • #6
            Renting is right for us, for now at least. 3 years into attendinghood with lots of student loans, trying to really get the career going and also have some time with the kids. Financially, I feel like I don’t need extra money on hand for unexpected home issues. So this year when the toilet, dishwasher, and hot water heater all needed replacing it didn’t cost us any extra. We also seem to be in the landlord’s good graces by paying 5 days early every month and have not had a rent increase despite significant impaction in the local rental market. . We do rent a house (duplex) on a cul de sac: awesome for our 2 little kids.


            • #7

              I own but wouldn't have been opposed to renting.  I'd probably buy less crap so renting would have saved me a ton of $!  Also, the flexibility is always a plus.  If you have unexpected kids or a job in a different city it might be nice to not be tied down to a house.


              • #8
                Short term circumstances typically make it much better to rent, but of course it depends on what happens in your market and that is unpredictable.  Long term circumstances typically make it much better to buy, but it also depends.  Inflation is also a huge factor here. Housing prices follow several things:

                population growth

                job growth

                mortgage rates and availability of financing


                supply in the form of available new construction

                Analyze these factors for your local market and you can make an informed decision about renting versus buying.  If inflation remains quite low over the next 20 years, buying will not be as highly rewarding as it was for the older generation.


                • #9
                  I think it's fine to rent, especially if you have no strong desire to own.  If you run the numbers, in can be a financial wash sometimes, even long term.  Having a mortgage hanging over your head can certainly feel uncomfortable.  The rule about owning if you plan on staying there for 5+ years I generally agree with, but the fact is that most people really don't know where they'll be in 5 years, or things change, life happens and people move.  The most certain circumstance I can see that a person would stay put, and make ownership more favorable, is if they are near family.


                  • #10
                    I don't see how long term renting could be big mistake. The worst case it seems would be it could sub optimal from a finance perspective depending on the circumstances. If you don't want to own a house then not having the hassles of home ownership are probably worth the potential financial downside.


                    • #11
                      Appreciate the responses. Currently renting in a nice, new building close to work. Would probably need to buy a move in ready or new construction to get an equivalently nice place, which would probably cost 1.5-2x as much monthly and add about 15-20 minutes to my commute. Renting an equivalent house would probably cost around 1.5x renting an apartment.

                      Saw a lot of folks dealing with flooding/weather issues recently. But feeling some pressure to buy (others are buying, interest rates are low, might be better to buy now if going to buy anyway, etc).


                      • #12

                        At any rate, if you’re in a stable job situation and a stable social situation, and in a reasonably normal real estate market, buying is the right move.
                        Click to expand...

                        And remember, you don't have to buy a house.  A townhouse or condo offers the same benefits in regards to locking in your mortgage payment, but both are significantly less work to keep up than a house is.  I moved two years ago from a house to a condo for precisely that reason.


                        • #13
                          @artemis - like renting, nothing is 'free'-- just included in prepaid format  in the form of a large HOA fee.

                          Similar question:  is one a all inclusive type vacationer or an a la carte one?  Do you sign up for tours or self-guided type?  Different stroke for different folk.

                          The mistake is doing the wrong housing that doesn't fit you.    Some of my friends LOVE urban downtown condo living, whereas I would die from all the congestion and noise from the sirens.  To each their own.

                          Renting is essentially paying all inclusive.  Long run, not financially better, but can be a lot easier too.


                          • #14
                            For me, a short commute is quite valuable.

                            Being 5 minutes from work means these days I can start my day mountain biking in the woods, then head back home to shower and change, then arrive at the hospital by 8:30 without stress.  In the old days when dealing with a longer commute, I would pack my gym bag and show up at the hospital after hitting the dirt trails in the woods, covered in mud.  I would shower and change in the doctors' locker room.  It did give the hospital security staff something to laugh about... "Homeless doctor has arrived again, covered in mud.  Should we let him in? Nah, I don't think so!"

                            That is a long winded way of saying that renting might be better if it allows you the lifestyle you enjoy and the convenience of a short commute.  If you aren't spending time in the car, you have more time for other pursuits that may be important to you.