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  • chuck2657
  • Expert Waygook

    • 677

    • September 11, 2012, 02:29:12 pm
Renting vs Home Ownership
« on: January 14, 2013, 12:22:49 pm »
(This thread is orientated towards America, both in the concepts and data)

One of my pet peeves is people who associate renting with "throwing away money", regardless of duration.  Don't get me wrong, owning your own house allows you to build equity, and there's always a break-even point where owning your own house comes out ahead of renting.  However, I see far too many people who jump right into home ownership without a clear plan for their futures; they assume that buying is always better in the long run.

I had always heard the time-frame (pending on how you calculated it) range from 5 to 10 years.  Basically, if you were going to move within 5 years, renting was a better option.  If you were going to be living in one place for 10 years or longer, buying was the better option.  The 5-10 year window largely depending on other factors and how you chose to calculate things.

I ran into a calculator on the NYT's site earlier today, and I thought I'd share.  It turns out that the 5-10 year guideline may be a tad generous...and pending on which rates you apply for (and your tax situation) 10 years might be a better cut-off than 5.  In any case, here's the link.  Have fun : ).

Note, there's lots of variables besides cost that go into whether you want to rent or own.  Renting frees you from lots of the hassles and worries (snow removal, lawn care, large repairs, etc.) while owning allows you to make decisions like "hey, I don't like that wall there" or "this room would look good i purple".  I'm trying to focus solely on the financial implications of the decision.  Most of all, I'm just hoping that before you make the choice of home-ownership, you actually run the numbers.  It's a huge decision, and an hour of math is time incredibly well-spent.

  • lbcloud
  • Veteran

    • 90

    • June 22, 2012, 05:05:05 am
    • United States
Re: Renting vs Home Ownership
« Reply #1 on: February 04, 2013, 12:00:01 pm »
I think a good portion of people who are opposed to buying a home are opposed because of how iffy the house market is. (In a lot of places, your investment dollar would not be appreciating.)

I am for home ownership because I can always rent out the place.  :P

Too, I am sure most people who rent, rent because they must (credit rating is not at its finest yet, down payment money needed, etc.)