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So...do folks here feel that renting for two to even three years is still a wash (or possibly a better return) vs buying? Let me give some background to my situation and prices, etc.
I'm 58, two college age 'kids'.
I'm not enamored with my job nor my location and would love to move out of state. Soon-ish.
2 Bedroom Houses/Townhouses here are ~$390K (plus needed improvements) while rents for similar spaces are ~$2k per month (very nice apartments, pet friendly too!).
I do not own any other real estate.
My heart says take a break from renovating, shoveling, mowing and rent the nice place for $2k for maybe two years and see what happens. My financial side says Never Rent, and I can't be out of the real estate market this long, and prices will not come down.
Most math says the breakeven point is about 3 years.
I think starting in the late 50s many of us are done with the home maintenance and yard work, and there's nothing wrong with taking a break. Life is more than a $ balance sheet.
Even with a slow rise in house appreciation you still need to pay the 5-6% realtor fees when you sell, plus your part of closing costs. Therefore don't count on any profit in 3 years if prices are only appreciating 2-3% per year.
But, it's all a question of risk-benefit. Some people who bought 5 years ago may have seen their property double in value. Years ago after the mortgage shenanigans of 2008 occurred, prices instead fell significantly. And who knew more recently that Russia would attack its neighbor, etc.
So many advise to just do what feels best to your lifestyle and career status at any given time. But make sure you could weather any storms.
Three years could go either way, but I'm guessing that in most three year periods a house would be a good investment, especially if you like your privacy and to modify your living space, or to have a well maintained yard. For a townhouse and older kids though renting might be the most flexible option if your goal is to leave town.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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I'm probably an outlier, because when we downsize I'm looking for a smaller house but acreage, enough that I can grow a lot of produce and will "need" a tractor. Most do look for less yard work, and many choose a townhouse or condo, so there is no work to do outside. For that renting is not much different than buying, being subject to the HOA you can't do what you want on the outside, and the equity won't grow as fast. In your case it would be wise to sell now before prices drop even more, to maximize your gain. Then if you do decide to buy, jump on it as soon as the prices start up again. No one has a crystal ball, to know when that will be, you just have to keep up on the research.
Renting can be a better deal if you live in a cheaper apartment and then save the difference. If you think you want to move soon-ish, then renting probably makes more sense. Remember you will pay a ton of interest in those first 2-3 years so it isn't much different than renting from that perspective as you aren't making significant inroads into equity.
Renting can be a better deal if you live in a cheaper apartment and then save the difference. If you think you want to move soon-ish, then renting probably makes more sense. Remember you will pay a ton of interest in those first 2-3 years so it isn't much different than renting from that perspective as you aren't making significant inroads into equity.
Unless you anticipate quite a bit of appreciation before you move that would make it worth owning and selling, I agree with renting. Or if you buy a place with renting it out in mind after you leave, find a place that you can cash flow on if you can't sell or choose to become a landlord.
Simple math would dictate that it would take 16 yrs of renting to amount to $390K purchase.
Obviously purchasing would cost a lot more after you factor in the interest paid, so it would amount to more than 16 yrs.
So you will be 74 by the time the rent paid catches up to purchase.
On average (without counting in a massive appreciation in house value / price), you are better off buying when you are younger and have more time to enjoy the property.
I think it really depends on what you value most... carefree living = renting. Pride of ownership = purchasing.
You have more flexibility to move around when renting. If purchasing, you probably won't sell if the market is down, etc.
There are so many factors involved. Whether real estate prices are high or low currently. The potential for appreciation. What interest rate you can get for the mortgage. How much money you have for a downpayment. Your debt levels, etc.
If I were you, definitely rent for now... then take your time looking around if you still want to purchase.
Simple math would dictate that it would take 16 yrs of renting to amount to $390K purchase.
I am afraid you oversimplified the math. You forgot to take inflation into consideration, so you would hit the $390K much sooner. But then again..a house worth $390K today will be much more expensive in e.g. 10 years from now.
So...do folks here feel that renting for two to even three years is still a wash (or possibly a better return) vs buying? Let me give some background to my situation and prices, etc.
I'm 58, two college age 'kids'.
I'm not enamored with my job nor my location and would love to move out of state. Soon-ish.
2 Bedroom Houses/Townhouses here are ~$390K (plus needed improvements) while rents for similar spaces are ~$2k per month (very nice apartments, pet friendly too!).
I do not own any other real estate.
My heart says take a break from renovating, shoveling, mowing and rent the nice place for $2k for maybe two years and see what happens. My financial side says Never Rent, and I can't be out of the real estate market this long, and prices will not come down.
Most math says the breakeven point is about 3 years.
What's your advice please?
Thanks!!!
It's a tough decision for sure. For me, if you've found your forever place, it's always better to buy. A reason I buy is for my kids. I don't know where their lives will take them but I want them to always have a home even if something goes wrong in their lives.
In a lot of places, mortgages on a 3 or 4 br home is similar to rent, so why rent?
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