Is it better to buy or rent? • Hacker News Board

Re: Is it better to buy or rent?

#101

Post by giulianob » Sat, Jun 20, 2015, 12:59 AM UTC

batou wrote: post #71

giulianob wrote: post #56

Earlier quoted context omitted.

Not sure if it's a difference in location but where I live it would cost me more per month to rent a similar property than what I own. If I wanted to save, I'd have to rent a smaller place instead.

You're probably right but will it in 5 years is the question you need to ask? You always pay over the odds to rent initially but due to inflation and relative property prices it becomes good value rather quickly.

It wasn't before the market crashed but it's been much cheaper to buy than to rent where I live at least.

Re: Is it better to buy or rent?

#102

Post by pkolaczk » Sun, Jun 21, 2015, 1:02 PM UTC

ido wrote: post #89

pkolaczk wrote: post #68

Earlier quoted context omitted.

Well, but after 30 years, when you retire the place is yours own and your monthly payment goes down. Even if you saved that 100-150 euro every month, you'd not afford buying it after 30 years, assuming it stayed at the same price-point. On the other hand, it is hard to believe you can rent a 200k€ place for 500€/m. In Warsaw, a 2-room 40-50 m² apartment in the city center costs about 400-500€/m to rent, but if you wa…

Even if you saved that 100-150 euro every month, you'd not afford buying it after 30 years, assuming it stayed at the same price-point. The thing is that many people don't have an extra 150 euros per month (not to mention ~50k euros for the down payment) to save or invest in a mortgage, they spend everything they earn every month even when renting. If you're in a position where you have extra money and you can choose…

This is the point I was making: renting is the only choice if you can't get a safe mortgage with good terms. And getting a mortgage with monthly payment X, when you could hardly pay more than X would be a very risky option and even if some (crazy) bank agreed to it, they would set a very high interest rate for covering the risk. But getting a mortgage with a monthly payment X when you can really afford 4X is a totally different story.

Re: Is it better to buy or rent?

#103

Post by ocdtrekkie » Sun, Jun 21, 2015, 8:03 PM UTC

jakejake wrote: post #96

ocdtrekkie wrote: post #94

Earlier quoted context omitted.

So, let me give you a practical example. Three years ago I bought a condo for $55,000. Six months ago, I sold it for $70,000. Factoring in various transaction fees, and interest, I made about ten grand. Why ever would I consider renting? We're still at a relatively low point in the market, and there's a pretty good chance the value of your property is going to go up, not down.

It would be interesting to see your breakdown. I figure your purchase closing costs to have been around $2k. Your agents selling commission around $3.5k. Then you must have had condo association fee of some kind. Property tax as well. You might have fixed up something or other to sell? No doubt you can make money on property though, plenty of shows about flipping houses are popular. I was just curious about your math…

Generally I consider taxes/association fees to be more cost of living than part of the property, in honesty (no way to really live anywhere for "free"). I spent a little to make the place nicer for sale, but it's a one bedroom, and we did a lot of stuff ourselves. (I learned to rescreen a screen door!)

I'd have to look at a lot of paperwork I can't bother myself with for an HN comment to get you an exact number, but after the sale of that place, and the purchase of a new place (I moved to get a larger place, wasn't really aiming to make money specifically.), I ended up with about the same amount of money put in towards the new place as I had paid into the old one, and an extra ten grand in my savings.

I'm not trying to say "buying is always better", and you have to do your research on the value of your property, properties in the area, where the housing market is at the time, how the rental market is going. There's no way anyone on this site can conclusively tell you that buying or renting is "better" nationwide.

But it's hard to understand why one would rent in a lot of cases, where you have no chance of getting that money back out.

Re: Is it better to buy or rent?

#104

Post by jakejake » Tue, Jun 23, 2015, 3:03 AM UTC

ocdtrekkie wrote: post #103

jakejake wrote: post #96

Earlier quoted context omitted.

It would be interesting to see your breakdown. I figure your purchase closing costs to have been around $2k. Your agents selling commission around $3.5k. Then you must have had condo association fee of some kind. Property tax as well. You might have fixed up something or other to sell? No doubt you can make money on property though, plenty of shows about flipping houses are popular. I was just curious about your math…

Generally I consider taxes/association fees to be more cost of living than part of the property, in honesty (no way to really live anywhere for "free"). I spent a little to make the place nicer for sale, but it's a one bedroom, and we did a lot of stuff ourselves. (I learned to rescreen a screen door!) I'd have to look at a lot of paperwork I can't bother myself with for an HN comment to get you an exact number, but…

Thanks. I guess I personally haven't really made much money on property, I've managed to break even probably if I figured it out. Although our upcoming sale will leave me with mid 6 figures in our bank account, it's not really profit, just equity that we've paid down.

I have enjoyed having our own place to do with as we pleased, but I'm looking forward to renting for a while!

Re: Is it better to buy or rent?

#105

Post by eueueu » Tue, Jun 23, 2015, 3:34 PM UTC

akgerber wrote: post #82

eueueu wrote: post #28

Earlier quoted context omitted.

Property will always increase over the long term. Unless you're moving every 6 months this isn't a good reason. Of course selling your house and buying a new one will take a few months, so it does restrict your mobility in that way.

My parents bought a 2-family in Milwaukee in 1980 for around $30,000. They sold it in 1988 for around $30,000. It's still worth around $30,000, if it's still standing and maintained. And Milwaukee is not, by a long shot, Detroit— it's still barely below its peak population. Wages have declined, however— an average young person when my parents were young would make the same amount of money as in San Francisco: http://…

8 years isn't the long term. Sorry if this wasn't obvious.