Renting Versus Buying: The Pros and Cons

In some point of every individual life comes a time to decide about owning or renting out their place. The most popular question that arises is "Do I have to rent, or Buy?" and in most cases, the answer is "Depending on the housing status, and the market circumstances". The year 2008 was among the most memorable year in the US. It is when the US economy bottomed out and their housing bubble burst. As the world watched, the US struggled since and that is where the idea of renting versus buying turned its head in the market.

Buying was always the best option for most Americans. But because of the economic downfall, renting became a better option. When homes values fell, many homeowners fall into an upside-down problem on their mortgages. Many American homeowners now owe more on their mortgages than what their home was worth.

  • August 16 2012 - Austin
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Answers (9)

Profile picture for user284828
Its even more difficult for a Senior 70+ couple who wish to rent/Buy in Florida for Winter use only.The onus of repairs and maintenance and ever escalating Condo fees keep one on edge,yet with the US laws foreign ownership has it shortcoming so what should one do. to avoid taxes buy in the name of children?
  • August 16 2012
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Yes, but that's not the case in Austin.  At least that is the minority and not the majority.  The fact of the matter is that in a stable state like Texas, it's not as big of a risk.  Furthermore, people need to think of buying a home as a long-term investment.  If you plan on buying a home for a period of less than 5 years, you are taking a risk walking into it.  

On a national level, the average appreciation rate is 4 percent.  If someone is wanting to move up in home as they get older it's important to buy a home as soon as they can.  I live in a very nice neighborhood and home is worth $600K.  I would not want to pay the note on a $600K home and I don't have to because the first home I bought 12 years ago appreciated and when we sold it in 2011, we transferred $150K in equity to the new home, which we paid $450K for.  Now, we the market has exploded in central Austin and we are paying the note of a $300,000 home on a $600,000 home.  That's the beauty of owning real estate.  You don't have to be rich to eventually live in a great community, you just have to have make smart decisions when you buy.  
  • August 16 2012
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Thanks Ryan for the thoughts you shared! It really comes into good decision making. People's decision may probably as well, depend on how they analyze the market and management as well.

Regards,
Mark Tamondong
  • August 30 2012
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Profile picture for RemaxBetty
Hello,

I own a rental company in Olathe KS, Rental Home KC, and I am also a real estate agent.

The rule of thumb that I tell my clients is that unless you plan to live in the house at least 5 years you would be better off to rent.

To buy one year and sell it the next costs the homeowner thousands of dollars ...especially if they made improvements while living there.  I have many people that will only live in an area for 1 to 2 years...then are transferred out...they have no real reason to buy.

I love to sell a home as much as anyone, but in a market with minimal increase in value it doesn't make sense to buy.
  • August 31 2012
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That is true when it comes to renting. Many friend of mine also told me that I should know whether I would be staying for 5 or more years in the location I choose to live or have plans to move in the next 1 more year or so.
  • September 05 2012
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Profile picture for user284828
As a 75 year old and intending to buy/rent for snow birding solution in SW Floida.its only 4 and maximum 5 months a year that my wife and I could use the Condo.My concern as a Canadian is the cost and responsibility of the up keep,the taxes and lastly the Probate and US govt big slice ,apart fromthe Canadian govt when I die.
 I can rent for a reasonable sum and my wife sys"RENT! RENT! RENT!" but being me I think buy in the name of my two boys and they could use it afterwords unless their wives disagree? 
 What say the experts above?
          
  • September 05 2012
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I'm not sure I agree totally.

Of course, we'd prefer it if our home values went up instead of down, and if you lost a ton of money when you sold, you wished you had rented.

But I think that for the most part, people generally prefer to own than to rent. Maybe not now, but eventually. And if they can keep up the payments, and the value doesn't fall to the point where they feel stupid making those payments, they're generally happier owning than they were renting.

I talk to my clients regularly, and several who bought at or near the peak wished that they hadn't paid so much, but they've also said things to me like, "Well, the kids have had a yard of their own for the past six years - should we have waited until they were ready for high school?"

There's not a single thing or circumstance that's good for everybody. Some people really do prefer to rent; others won't buy unless they get a deal they can't refuse - others just want to own.

Go figure!
  • September 05 2012
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Renting is FABULOUS !
I have 4 rentals and they are great. It's too bad that my tenants can't qualify for a mortgage. I'm happy to rent a nicely maintained house to them for as long as they need it....They don't need to pay for any maintenance or upkeep. 
  • September 06 2012
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Renting VS Buying is really a personal decision that is different for everyone. How long do you plan on staying on the home? How stable is your employment? Do you have a down payment? Do you want to be tied down? LOTS of questions before deciding on such a huge question
  • September 07 2012
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