Comments on: Buy vs rent datapoint of the day http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: strakedavis http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-45771 Tue, 05 Feb 2013 23:36:49 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-45771 This is an excellent article if you’re in Dallas. Apartment finders are fantastic, especially if you know what you want.

]]>
By: lylaburns123 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-37724 Tue, 10 Apr 2012 15:51:35 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-37724 I have both bought and rented before. I think renting can be great if you have good landlords. We had our furnace go out and our landlords fixed it. http://www.ultimateairinc.com It would have been pricey to do on our own. I know that not all landlords will do that, so be careful!

]]>
By: lylaburns123 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-37723 Tue, 10 Apr 2012 15:50:58 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-37723 I have both bought and rented before. I think renting can be great if you have good landlords. We had our furnace go out and our landlords fixed it. It would have been pricey to do on our own. I know that not all landlords will do that, so be careful!

]]>
By: AZRentalHomes http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-10020 Mon, 14 Dec 2009 06:46:24 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-10020 The lack of confidence in the real estate market is the key issue in this matter. So long as the overall outlook of owning real estate is unappealing to the common buyer, the margin between renting vs buying will continue to narrow. However, rents are also on the decline, spurred by high unemployment and falling real estate values. The last time this ratio was inverted was at the peak of no money down, negatively amortizing loans. So long as these types of loans are not available, I expect the ratio not to go negative. Interest rates are at lows yet the lack pay interest only loans is still keeping the price of renting lower then the price of buying. This is especially true for the low down payment buyers.

http://www.azrentalhomes.com

]]>
By: David hogard http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-8316 Tue, 03 Nov 2009 12:57:15 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-8316 You must also consider that if you decide not to purchase the property you have been renting, the seller will get to keep the rent premium you paid to them. The seller would also keep the option fee you paid when you signed the contract. While it is considered a loss to you, it does allow you to the privilege of living in the home during the “option to buy” period. This period of time is usually three years or less and gives the buyer a chance to build up their down payment.

http://betterblog.ning.com/profiles/blog s/buying-home-to-rent

]]>
By: Greg http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-6561 Wed, 09 Sep 2009 18:27:04 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-6561 Unless price-to-rent ratios (or gross rent multiple or whatever you want to call it) fall back down to 10 to 12, then renting will always be cheaper than owning over a long horizon.

If the price-to-rent ratio is 20, then a $500,000 house will only command $2083.33 per month in rent. The mortgage on a $500,000 house is going to be something like $2997.75 per month (30 years at 6%), plus $520.83 per month for property taxes (1.25% in my city), plus hundred per month in insurance and hundreds more in upkeep.

If you bought a property at a sane valuation 25 years ago, then you can continue to collect your rent and make a return on investment. But people who try to buy right now are paying so much that their return on investment might very well be negative for 30 years.

In those intervening 30 years, the renter’s stock portfolio will have grown so much that he could buy 10 houses in cash versus the homeowner who now has 1 house. (This is if the renter can be disciplined enough to save all the extra money he’d have by not buying a house.)

]]>
By: KenG http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-4829 Thu, 30 Jul 2009 23:51:26 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-4829 Dave, are you saying that renting will be cheaper than buying because landlords are willing to lose money?

I don’t think anyone would expect that buying or renting is always better, but that on average, one will be better than the other for a given condition (the condition I provided was buying a home and staying in it for a long time, and that will usually, not always, be less expensive than renting).

As far as blanket statements go, if none are allowed, then we shouldn’t be discussing a rent vs. buy decision, because it will often depend on whether it is a renter/landlord market or a buyer/seller market. Which is to say “it depends”.

]]>
By: Dave http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-4824 Thu, 30 Jul 2009 21:36:31 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-4824 KenG:

You assume that the landlord can get a rent which covers his expenses and gives him a profit.

This is true in some real estate markets and not so much in others. Blanket statements such as yours are of little utility when discussing something as general as “real estate.:

]]>
By: KenG http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-4801 Thu, 30 Jul 2009 16:25:24 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-4801 Landlords charge for maintenance, and they charge a lot. Almost every large business will charge a lot more than the hourly rate for a professional service than the service provider is actually paid. If I hire a plumber, he may charge me $55 per hour, but if a big company hires a plumber, they will be me $95 per hour, to cover their overhead, even though they may get the service for $45 per hour. This idea that large landlords have economies of scale that they pass on to their tenants is a myth, as they use every opportunity to add fees. And not everybody rents from giant companies, there are lots of individuals who rent out houses and condos, or who own small apartment buildings.

I have been a homeowner for the last 12 years, and there is no question maintenance is a neverending expense. But when I was renting, rent increases were a way of life. And in California, where I live, property taxes don’t increase unless you trade up.

You two guys (Eagle and Dave) ignore the fact that landlords add a profit margin that will exceed any cost savings, if there are any.

]]>
By: Dave http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/comment-page-1/#comment-4788 Thu, 30 Jul 2009 14:16:31 +0000 http://blogs.reuters.com/felix-salmon/2009/07/29/buy-vs-rent-datapoint-of-the-day/#comment-4788 The price of owning is not fixed. Taxes, maintenance, insurance, and sundry other costs associated with owning generally increase over time.

The volatility of ownership costs, in fact, is one of the reasons why a renter can predict his monthly living expenses with more accuracy than can an owner.

]]>