Owning vs. Renting: My Two Cents Worth.

I miss renting. I know that home-ownerhip has it’s perks (I’ve reaped the financial rewards to some extent myself), but there are too many myths and complications associated with owning vs. renting:


1 – Myth – rent goes up, but your mortgage will always stay the same. Bullshit. True, if you get a 30 year fixed mortgage your bank payments remain the same, but your monthly payments go up every single year when your property taxes go up. And we’ve seen increases of over $100 per month added to our monthly payments because of that. Plus, if you get an ARM-style mortgage, payments will increase after a certain period of time unless you re-finance (which costs thousands).


2 – Complication – Unlike with renting (where you can simply move out once your lease expires), with home-ownership, you’re stuck waiting until you can find a buyer. Then you have to try and coordinate finding a new place to buy (or rent) that coincides exactly with the closing date on the home your’e selling.


3 – Complication – speaking of that coordination issue – When you own a place and want to buy a new place you need to come up with the 5%-20% downpayment (minimum) on the new place BEFORE selling the old place. I’ve learned the hard way how difficult that can be when most of your money is tied up in the property itself.


4 – Complication – when you own, you’re responsible for everything that breaks. I have friends who’ve bought a place and found less than a few months after moving in that a new furnace is needed. I’ve heard stories of water heater’s breaking, roof’s leaking, termite infestation, etc…. At least when you rent, you just call the landlord and the appliance (or problem) is fixed at no charge to you. For me, such repairs have been done same-day or next-day


5 – Myth – you’ll get so much money back in taxes every year since the mortgage interest is tax deductable. True, you get money. But I didn’t notice much of a difference at all (it could be because un-married people owning property together get screwed in taxes). All said and done, I think my tax return was just under $1,000 greater than when I rented.


6 – Complication – the stress. Buying/Selling is so stressful compared to renting. Like I mentioned before, when you rent, you can move out whether the landlord has found a new tenant or not. As an owner, it’s daily phone calls to attorneys, mortgage brokers and real estate agents. There’s the lengthier process of being approved for loans (versus the simple credit check with renting). And, paranoid person that I am, there’s always the fear of “what if we line up new housing and plan ahead…and then the buyer dies?” or “what if the stock market crashes and they bail out of the deal?” or “what if….” You get the picture. Nothing is set in stone until the actual closing…and if things fall apart at the last minute, you’re screwed.


Anyway, as I said before, I know there are perks to home ownership. In a good real estate market you can make a pretty good profit when you sell…much more than you could by investing in mutual funds or bonds. But as I’m in the process for the second time of selling a place, I’m debating whether the stress is worth the money. I’m just not a capitalist, I guess. But aside from money (which isn’t that big of a deal to me, obviously…I work here, after all), what are the benefits of owning versus renting?


I should probably close this entry by stressing that nothing is wrong with our move. Everything is set for now. But what if….?

7 Comments

  1. Comment by David on December 1, 2004 1:06 pm

    Damnit Karl! I’m just a pharmacist, not a doctor.
    Just breathe, will you. When are you closing anyway?
    To all your readers, don’t forget today is Worlds Aids Day. If you are in the giving mood this season, and you wish to give, Aids charities are in desperate need due to funding cuts.
    Peace!

  2. Comment by David on December 1, 2004 1:06 pm

    Damnit Karl! I’m just a pharmacist, not a doctor.
    Just breathe, will you. When are you closing anyway?
    To all your readers, don’t forget today is Worlds Aids Day. If you are in the giving mood this season, and you wish to give, Aids charities are in desperate need due to funding cuts.
    Peace!

  3. Comment by John on December 2, 2004 12:19 pm

    I can relate. I’ve gone from owning a house in Washington DC for four years, to a rental here in Texas. I am kind of enjoying the lack of responsibility, but our housing market being a bit different from yours, I also know that my rent is more than my mortgage payment would be if I owned. But other life factors intrude. (I kind of did this to myself by moving to a relatively high rent area – a Jamaica Plain like neighborhood of Victorians, 40s bungalows, lesbians, and Democrats. It costs more to be a progressive here in a red state I guess.)

  4. Comment by karyn on December 2, 2004 1:50 pm

    Realize you are so asking the wrong person what the advantage is of buying over renting; if we had OWNED our house in the Cape’s version of Mayberry 3 years ago, we’d still be living there like normal people rather than living here at the House of Pain like veal. Sorry sweet pea, but I can’t get behind the Renting-Is-Better argument even though the logistics make sense. Extenuating circumstances of course.

    Also, as a champion player of the World Class WHAT-IF tournaments, I can assure you , that way lies madness. And ulcers. Don’t what-if yourself to death, it is useless, a no-win, self-destructive, niggly means of inducing psychosis. Just stop and trust that you will handle whatever comes along. You can’t know what’s around the bend, but trust your ability to deal with it, survive it, and be okay. You always do. I have faith. 🙂

    xxoo – K

  5. Comment by karyn on December 2, 2004 1:57 pm

    Realize you are so asking the wrong person what the advantage is of buying over renting; if we had OWNED our house in the Cape’s version of Mayberry 3 years ago, we’d still be living there like normal people rather than living here at the House of Pain like veal. Sorry sweet pea, but I can’t get behind the Renting-Is-Better argument even though the logistics make sense. Extenuating circumstances of course.

    Also, as a champion player of the World Class WHAT-IF tournaments, I can assure you , that way lies madness. And ulcers. Don’t what-if yourself to death, it is useless, a no-win, self-destructive, niggly means of inducing psychosis. Just stop and trust that you will handle whatever comes along. You can’t know what’s around the bend, but trust your ability to deal with it, survive it, and be okay. You always do. I have faith. 🙂

    xxoo – K

  6. Comment by karyn on December 2, 2004 1:58 pm

    Realize you are so asking the wrong person what the advantage is of buying over renting; if we had OWNED our house in the Cape’s version of Mayberry 3 years ago, we’d still be living there like normal people rather than living here at the House of Pain like veal. Sorry sweet pea, but I can’t get behind the Renting-Is-Better argument even though the logistics make sense. Extenuating circumstances of course.

    Also, as a champion player of the World Class WHAT-IF tournaments, I can assure you , that way lies madness. And ulcers. Don’t what-if yourself to death, it is useless, a no-win, self-destructive, niggly means of inducing psychosis. Just stop and trust that you will handle whatever comes along. You can’t know what’s around the bend, but trust your ability to deal with it, survive it, and be okay. You always do. I have faith. 🙂

    xxoo – K

  7. Comment by Phany on August 25, 2005 1:10 am

    You are the best. Thank you http://www.bignews.com

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