Renting a house vs buying a house???

DH and I are trying to decide which is ideal for us...renting vs. buying a house? Anyone have any advice for us?

Re: Renting a house vs buying a house???

We rented an apartment for 5 years before buying our house a year ago. My three pieces of advice, which we took seriously when considering, are:

1) Don't just buy a house to buy a house. You need to be ready financially and mentally to do it. Make sure that you are ready to take the leap, because it's a lot of work once you make the decision to buy. Owning is a lot of work. If you go from living in an apartment where your building/landlord takes care of the outside and your garbage be prepared this will not be the case with your house. It's a lot of work!

2) Are you finances in order? Think about the amount of money you can put down and then think about having another $20k-$30k more to cover moving, renovation, furniture, landscaping, etc. Also, your credit will be scrutinized like crazy these days. Make sure all of your ducks are in a row, otherwise securing a mortgage at a decent rate will be tough.

3) Don't settle. If you can't afford to buy the house you love, in the area you want to live in, then wait and save to do that.

HTH!

Re: Renting a house vs buying a house???

Looking at it from a strictly financial standpoint, I would say to consult with knowledgeable experts, such as a mortgage professional, your accountant/financial advisor, a realtor, and crunch the numbers to see what makes most sense. But I think in many instances, it makes more financial sense to own in the current Long Island real estate market.

I completely understand why some people rent, and I know home ownership is not for everyone. I rented for over 10 years before buying my home with DH. Most of that time, I was living in Manhattan where we could not have afforded to buy the type of apartment we were renting. It just made much more sense for us to rent, for a variety of reasons.

However, for people currently debating the rent v. buy issue on Long Island, rentals are very expensive here, and house prices and interest rates are at an all-time low. Renting a whole house can cost you more than a mortgage payment would. And there are tax benefits to owning a home that you just don't get as a renter. I remember my accountant yelling at me and dh to buy something because we had a lot of income at the time and nothing to write off. And buying real estate in this market is a great investment, and you will likely build equity as prices come back up.

A lot of people think that they need to have a huge down payment, but you can (and many people do) buy homes with as little as 3.5% down with an FHA loan. And while banks are careful to qualify borrowers by looking at credit, debt-to-income ratios and other criteria, I think it is comforting for a buyer to know that they won't be in over their head ... the banks are no longer giving money to anyone and everyone. But with FHA, the credit and income requirements are a little more forgiving anyway.

I also think there are a lot of non-financial benefits to home ownership. Also, the OP seems to be contemplating renting a home (versus renting an apartment), which means you often have many of the same responsibilities as a home owner would (for utilities, landscaping/grounds care, taking out garbage, etc.). Renting a whole house is not the type of maintenance free living that you get in an apartment rental, or even as a co-op or condo owner.

Re: Renting a house vs buying a house???

my advice is sit down and look at numbers!!!

DH and i were all set to start looking at houses recently...the rates are so low and the market is down...def the right time to buy! however...we sat down and crunched numbers and decided we should wait.

as a homeowner, you have the down payment, then your monthly mortgage payment, if your down payment is less than 20% you have a monthly PMI charge, you have taxes, electric, hot water, gas and homeowners insurance, cable, internet, phone all as monthly bills.
you also have food, car/commuting expenses.

as a renter you only have rent, electric, cable...its a big difference. when we worked out the numbers it would have been about $1200 more per month for us to buy (we rent in queens and were looking to buy on LI).

we actually thought it was doable and were going to set up appt with a realtor...but then we realized one big thing...
we want to start a family. forgetting the cost of diapers, baby food, baby clothing etc (and a new maternity wardrobe if you are a first time mom)....we realized we would have a monthly daycare expense of about $1,000 per child (DH and i both work and would continue to work after having children). so when we added that to the monthly homeowners payment based on our calculations...we decided to continue renting! our new plan is to start a family and then when the child is towards the end of daycare (starting public school) we will look to buy a house.