To buy, rent or rent to own?
Question:I know I am tired of apartment living. And I have only been with my boyfriend for 2 years, however we've been living together the whole time. Its worked out so far and now we're considering our options. Also I have a pit bull and 2 cats. The apartment life doesnt seem to fit our family situation, so we have pretty much figured that we need a house. But should we buy, rent or rent to own? Any suggestions or things I should also be taking into consideration? I know buying would be a big move and a large investment. But we are both on the same page and I feel we could handle it. But also, how do we go about it? What would we need? is first time buyers something to consider? Also marriage isnt something were both wanting to do, we practically are but we just dont have it on paper by the state. But should we wait untill after we do get married. (even though thats not in the plans? and its not ment in a bad way)
Answers:
No one knows your personal situation, however I can tell you after living in an apt, renting and now owning, there are pros and cons. Here are some I have experienced:
apts- no maintenance, something breaks, one call and someone else fixes it. usually do not have to pay for all the utilities. ie: garbage, water, pge, etc. if you do, they are usually cheap. you do however have neighbors very close, above below, etc. restrictions on animals, etc. parking can be a nightmare. deposit usually covers all damages and cleaning, etc. so you just move out and no questions asked. rent will change at the end of each lease. if you go month to month, usually the rent is higher.
rent a home- sometimes you have to maintain a yard, but not the actual home itself. you can still call to have things fixed. deposit will cover some things, but landlords can be more picky than apts, as the maintenance is usually their responsibility, not a maintenance crews. you have to pay the utilities, all of them, which are usually more than an apt. however, your neighbors are a normal distance away, usually have a yard to have parties, BBQ's. Often times have a garage for storage/parking. Depending on the landlord, some do not change the rent at the end of the lease. they just let you continue month to month at the same rate.
buy a house - HUGE tax write off!! You have to fully maintain the place. Yard, any issues, plumbing, heating, carpets, etc. However you can make it your own. You still pay all the utilities, etc. Animals are up to you. Cannot move easily if you do not like area/neighbors, etc. You will only make money on your home, however it may not be over night. The mortgage will def. be more than rent, and do not forget property taxes. Not sure where you live, but look into that. Many people forget about how much more it is per month/year on top of the mortgage. There is a definite sense of pride in owning.
If your not married, have something written up regarding the terms, if you do end up splitting up. A cousin of mine was engaged, bought a home and he cheated. He wanted her to buy him out. He failed to recall that it was her credit alone that got them the place. His was crap and he had a low paying job. Without her, they would have had nothing. She ended up not having to pay him, however it got ugly and costly for her.
Either way, there are perks. You just have to weigh them out for your particular situation. Also, make sure the guy you are dating, does not mind working on the house. It is a never ending project. If you cannot or will not do it yourself, make sure you have enough to pay a contractor to do it for you!
I love owning, but it is expensive. Cost wise, I do see the allure of renting a home! Apt living is not an option for us! We have kids who need a place to play!
Good luck in whatever you both choose!!
i totally understand what you are going through,, i hate living in my apartments,, it is like drama headquarters,, i plan to buy a house,, but i really recommend renting a house,, that way when stuff breaks you dont have to pay for it,, but on the other hand you are just throwing money down the shoot for nothing,, so i am kind of torn,, very good question
I really wouldn't recommend purchasing a house with anyone that your not married to. It's just doesn't make good business sense.
Definitely buy. You need fairly good credit, become preapproved for a loan amount, maybe have money to put down, and don't buy a new car while doing all this at this time. A rent to own is really not yours, and with pets like I have, buying is best. You don't have to be married to purchase a home together. And houses build equity. Our home has is worth 3 times what we paid for it in just 7yrs. So, when we need to pay off credit cards, buy a car, or whatever, we just refinance. It's like having your own savings account, and since we can't seem to save, it's great. Happy house hunting!!!
You don't need to be married to buy a house, owners in joint tenancy. you get good tax benefits buying a home. As a first time buyer you will get some good deals on the financing (I'm preapproved at 0 down, 107% @ 6%; don't waste it on a mobile home or cheap condo.
Consider this: a modular home in a park might cost 150k ($1000/month mortgage) plus the space. ($500/Mo total $1500/ mo.) a condo at 250k ( $1600/ mo.) plus Home owners assoc. dues (400/mo total 2000/mo.) a 2 bd house 300k (2000/mo.)
The best advice I could give you today is to evaluate your market. I live near San Francisco, CA. The housing market is hurting badly, after 10 years of hog heaven. Prices on some homes I'm looking at have dropped $30k to $150k. in the last couple months. The houses are still too inflated. If I buy one next month, come December it might sell for $50k less. The market here is projected to continue to drop for another year, making this just the beginning of a buyers market. 2 months ago I offered 250k on a 2 bdrm condo (asking 300k) they accepted, I decided to continue looking. Now I see 3 bedroom houses at 300k.
Save your money for a 5% min. deposit (more is better). Watch the market and buy toward the end of the year.
Money magazine published an article recently that said with the housing market the way it is now, it is smarter to rent than buy. Example- If you purchase a home for 150,000 and your payment is 1200. only about $50 goes toward the principal each month and you are not building much equity. If you rent a place for 600. and put 600. in money market you make more money. For you this might be a good thought since you are not sure what your future is. -- On top of that 1200. mortgage you have to consider your repairs, etc. While renting your landlord handles all of that.
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