Buying a House vs Renting

amother

OP ↓

Yesterday at 2:20 pm

Is it worth buying a 3 bedroom 1200-1600sqft house with a mortgage payment of approximately 5k vs renting a 5 bedroom 2400-2800sqft house with a rental payment of $3500-$4000?
Buying also means anything that needs to be fixed or replaced comes out of my pocket vs the landlords.
I kept on saying yes but my husband is now trying to convince me otherwise and it made me wonder.

amother

Obsidian ↓

Yesterday at 2:22 pm

Yes buying makes the most sense because your rent can increase but mortgage stays the same and for many other reasons as well just google them

amother

Olive

Yesterday at 2:24 pm

Can you comfortably afford the extra $1-1.5 k per month? Are homes in your area likely to hold their price or go up? Is it a home that will need a good amount of work or is more or less move in ready?

If you can afford it, the price will hold or likely go up, and it's no money pit, I'd say buy. At least you have something to show for all the money you're laying down month after month after month.

kneidelmeidel

Yesterday at 3:33 pm

Yes of course, you’re slowly buying a house, which will eventually be yours, instead of slowly transferring all your life’s earnings to a landlord.

amother

↑ OP ↓

Yesterday at 3:51 pm

Thanks all gonna reiterate these points to DH. It just sounds crazy right now since a 3 bedroom rent I’d hope will never be 5k but if we’re thrown out of an 5 bedroom that’s 4k and rent will be 5-6k somewhere new it’s not like we’ll downsize to a 3 bedroom at that point.

Yes it’s mostly move in ready asides for some basics like appliances, paint, some closet shelving, and a good cleaning.

amother

Amber

Yesterday at 3:59 pm

Unless one's rent is substantially lower than marketplace, it is always better economically to purchase rather than buy

Of course one needs to be smart about purchasing it in many ways - don't use it as an ATM; don't think one must trade up to more expensive homes. One needs to have a bit of a cushion to cover normal maintenance expenses.

But the reality is that a home has traditionally been the largest asset for most American families.

Historically a home will rise in value over the years.

A percentage of the money is tax deductible.

If one is willing to think long term the mortgage gets paid off and then one's living expenses are far lower than if one was renting. Not to mention that rents will always rise versus housing which is much more fixed.

And a home represents a real asset for retirement - live in it inexpensively or sell it and down size or even take out a reverse mortgage to fund your retirement.

amother

Waterlily

Yesterday at 3:59 pm

amother OP wrote:

Are there maintenance fees?

MO3B

Yesterday at 6:04 pm

Buying a home is a smart financial decision for many reasons.

When you rent, you're paying someone else's mortgage, and that money doesn't benefit you in the long term. Unlike rent, which can increase unpredictably at the end of each lease term, mortgage payments are consistent.

Renting also comes with uncertainty. Your landlord might decide not to renew your lease, forcing you to find a new place to live. Moving can be stressful and costly, - think when you're 60+.

If you can afford the down payment and monthly mortgage payments, even if it means living on a tight budget initially, buying a home is a worthwhile investment.

Part of your mortgage interest and property tax payments may be tax-deductible, offering additional financial benefits. If interest rates drop, you can refinance your mortgage to lower your monthly payments.

amother

Steel

Yesterday at 6:11 pm

We’re renting 9 years.

I’m buying now bzh. A 1800sq ft home that’s 100 years old and needs lots of help

You need a lot of money for the down payment obviously and other unexpected costs.

-rent for our family would be $4k min, mortgage would be 3.5k if we put enough down. That definitely makes sense for us. However, we didn’t realize how much everything else would be…
-closing costs are 10k- keep in mind
-renovation would be around 30-60k. Depends on how much work we end up doing.
-furnishing simply another 10k.

We will hopefully get it ready for the summer and rent it out in the summer before we move in. We live near a beach and people do that here.

That all being said I’m so happy not to have to rent ever again and can’t wait to start making the house our home iyh!

itsokay

Yesterday at 6:13 pm

I actually agree with your husband. Crunch the numbers but I bet if you put the difference in an index fund every month you would come out ahead financially in the long run and have a better standard of living in the meantime.

amother

Indigo

Yesterday at 6:18 pm

Yes bec when your old your house will be yours vs being at the mercy of a landlord
My husbands family (parents grandparents uncles) thought like your husband and now they suffering have to try to get a price lock bec they’re retired and no way of getting a higher income
If they just bought a house when they were young for 200,000 or even cheaper then they would’ve been wayyyyy better off especially that houses these days sell for over 1 mil

amother

Ruby

Yesterday at 6:24 pm

BUY A HOUSE. we bought in 2022 when we thought the house was soooo expensive and our mortgage payment was $800 more than our rent. And now look in 2024. My mortgage payment is less than half of the numbers you're talking and will continue to be over the next 5 years (unless Hashem blesses us financially and we pay it off) I really believe with all my heart that in 5 years, everyone will be kicking themselves for not buying today, just like they do every time an opportunity arises since the beginning of time. If you could AFFORD the mortgage, buy buy buy!

amother

Jetblack

Yesterday at 6:39 pm

amother Obsidian wrote:

Yes buying makes the most sense because your rent can increase but mortgage stays the same and for many other reasons as well just google them

My house has doubled in value. While that's overall good, it won't help us til we sell. In the meantime, our mortgage has gone up because property taxes are part of your mortgage payment and our taxes have gone up since our home is worth more. So it's not actually true that your mortgage can't go up. I'm not sure but we're probably paying that $150 more per month than we were when we bought the house 9 years ago.

amother

↑ OP ↓

Yesterday at 7:14 pm

amother Waterlily wrote:

Are there maintenance fees?

No HOA fees just regular every day maintenance that any house will require, you just never know if it’s $200 for a plumber or 30k for a new roof.

amother

↑ OP

Yesterday at 7:17 pm

itsokay wrote:

Thing is though that the property value can and will go up. In the last 4/5 years the prices in this area have Doubled! Now I don’t think prices will continue going up as dramatically however I’m sure it will rise slowly but surely.

amother

Beige

Yesterday at 9:34 pm

amother Ruby wrote:

I hope. We bought now. I feel like it was the worst time. I hope in long run will look back and feel like we got good value.

Op I believe buying is the best idea for all the reasons listed above. I would try to find something a bit bigger Even if it means going further out.

1200 sf is pretty small. Compared to thr houses u are looking to rent ( though I don't knwo what stage you are at)