Venting here: I got notice that my rent is going up about 15%!!!! if I take this apartment for next year. I've been here 4 years, and they've never raised the rent more than about 5% at once before. I am so pissed off--I love my apt and my neighborhood, but it's now a small fortune for rent. So we've been all over NY and NJ this past week--I have to let my landlord know by next Friday if I'm renewing my lease or not, though I don't have to move out until June 30. It's really stressful--I'd like someplace that's an easy commute, but that's nice; am tired of living like a college student in a cramped apt! But we are also trying to save to buy a place. It's a real pain trying to figure out what neighborhoods are decent, where we want to live--city or suburbs, how long of a commute is acceptable....on and on. My workouts have just gone down the toilet all week because I haven't been home after work one night this whole week! :-(
Apartment stress
- Thread starter Bunbun
- Start date
Oh dear sweet bunbun, I feel your pain. From someone who grew up in MD, learning about living/renting in NY almost gave me a stroke. Although our rent hasn't hiked like yours (we're in westchester) it is still a bloody fortune. We hope to have a house by the time we're 40. Gawd. Do you know the average home price in my town is 1.5 million? I do hope you find something that suits you. I'll cross my fingers and toes for you.
Live with sincerity, love with passion, and dance like you mean it.
Debbie
Live with sincerity, love with passion, and dance like you mean it.
Debbie
4
40something
Guest
If it's at all possible...buy a house now and stop throwing your money away on rent. I realize, you're probably saving for a down payment but get out and talk to some bankers and see what your option's are right now. You may just find out you can buy instead of continuing to rent even if you have to borrow some of your down payment.
By renting you are only making the landload wealthy. You need to buy a house. You've been renting for 4 years...cut back somewhere and start putting more in your fund for the house, it's all about priorities. And tell me you have that money invested so it's earning higher than passbook savings?
But get out and talk to some mortgage banker's about your option's. I hate to see anyone renting, you need to be investing your money for your future...not for your landlord's future retirement.
By renting you are only making the landload wealthy. You need to buy a house. You've been renting for 4 years...cut back somewhere and start putting more in your fund for the house, it's all about priorities. And tell me you have that money invested so it's earning higher than passbook savings?
But get out and talk to some mortgage banker's about your option's. I hate to see anyone renting, you need to be investing your money for your future...not for your landlord's future retirement.
Stringbean
Active Member
A 15% jump in rent is pretty high. I have never rented anywhere where the rent did not go up each time my lease expired. What you can do is call the apartment and act like a prospective renter and see what they are charging for a place the same size as yours. That will give you some perspective.
I have been in real estate my entire career and I will tell you it is cheaper to rent. Yes, I said it is cheaper to rent. Even with the tax breaks of owning a house, you will still come out better renting if you are saving up to buy a house.
You may be better off staying where you are at for another year. That is probably what I would do because if you feel strapped for cash now, you will really feel that way once you own a house.
I have been in real estate my entire career and I will tell you it is cheaper to rent. Yes, I said it is cheaper to rent. Even with the tax breaks of owning a house, you will still come out better renting if you are saving up to buy a house.
You may be better off staying where you are at for another year. That is probably what I would do because if you feel strapped for cash now, you will really feel that way once you own a house.
nancy324
Cathlete
I disagree with you 40something, and I agree with Stringbean. I think that economically it can often be very wise to rent. The first several years of a mortgage are mostly interest payments anyway, and no equity is gained. I don't think people should buy until they are good and ready to do so, and all the factors fall into place.
-Nancy
-Nancy
candi
Cathlete
Bunbun,
What really matters is what you want. If you have always wanted to own a home and thought it was unaffordable, now may be the right time to consider it. Mortgage companies are making it much easier to own than rent.
I would never rent again but I live in Central FLorida where owning is probably much easier than other parts of the country, especially up north. Our taxes are getting just about as outrageous though.
As far as a house payment goes, DH and I always paid an additional bit of principal along with our house payments for 7 years and I cannot tell you how much it helped to buy our new home. Actually, I can. Our new home is worth approx $500K and we only owe $150K on it after gaining equity when we sold our prior home in December. So, along with the tax benefit, there are others. But, again, I think it depends on where in the country you intend to live and what you want.
What really matters is what you want. If you have always wanted to own a home and thought it was unaffordable, now may be the right time to consider it. Mortgage companies are making it much easier to own than rent.
I would never rent again but I live in Central FLorida where owning is probably much easier than other parts of the country, especially up north. Our taxes are getting just about as outrageous though.
As far as a house payment goes, DH and I always paid an additional bit of principal along with our house payments for 7 years and I cannot tell you how much it helped to buy our new home. Actually, I can. Our new home is worth approx $500K and we only owe $150K on it after gaining equity when we sold our prior home in December. So, along with the tax benefit, there are others. But, again, I think it depends on where in the country you intend to live and what you want.
4
40something
Guest
"The first several years of a mortgage are mostly interest payments anyway, and no equity is gained."
Yes, that is true but...you'll never build equity if you never buy a house!
Another option is to buy a two family home, a duplex or a triplex and you let your renter(s) help you build equity. You live in one of the apartments.
Use your money wisely. Invest for your future.
Yes, that is true but...you'll never build equity if you never buy a house!
Another option is to buy a two family home, a duplex or a triplex and you let your renter(s) help you build equity. You live in one of the apartments.
Use your money wisely. Invest for your future.
Fortysomething, this is exactly what DH and I do/did and it's been a financial windfall. We own a duplex and a rental cottage, and, as I posted here a few days ago, have just bought a home to live in, not rent out. We lived in one side of the duplex for a few years and have built substantial equity. The great thing about owning rental property is that, with planning, you can finance your own life with OPM as financial whiza call it: other people's money. I would encourage anyone to try this. I know alot of people are leary of dealing with tenants but I have to say we have had such great luck with tenants!! You only hear about the bad ones but there are great people renting out there.
Bunbun, you have my sympathy as I know what it is like to try and find a decent apartment in NY. My only advice would be that if you do decide to buy, don't get too much house. One of the reasons people get in over their heads with houses is because they take on too much mortgage-wise and become house poor. Good luck!!
Sparrow
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in sideways, thoroughly used up, totally worn out, and loudly proclaiming ‘Wow - what a ride!’ — Peter Sage
Bunbun, you have my sympathy as I know what it is like to try and find a decent apartment in NY. My only advice would be that if you do decide to buy, don't get too much house. One of the reasons people get in over their heads with houses is because they take on too much mortgage-wise and become house poor. Good luck!!
Sparrow
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in sideways, thoroughly used up, totally worn out, and loudly proclaiming ‘Wow - what a ride!’ — Peter Sage
Stringbean
Active Member
Houses have maintenance. You must always update or your house will look dated. You have to maintain the lawn etc. Our new roof repair ate up any equity we have have gained this year. Oh, and lets not forget that the carpet needs replacing. And not with more carpet because people want hardwood or tile now, which is twice as expensive. Interest payments are money thrown away.
It is cheaper to rent. But who wants to hear the neighbors toliet flush or not be able to play your music, or raise your voices?
They each have their pros and cons. Owning a house is very nice, but you will have to pay for it.
I say continue to rent for now.
It is cheaper to rent. But who wants to hear the neighbors toliet flush or not be able to play your music, or raise your voices?
They each have their pros and cons. Owning a house is very nice, but you will have to pay for it.
I say continue to rent for now.
4
40something
Guest
Ahhhh, Sparrow...we are two birds of a feather! Dh and I never spend money without knowing what we will get in return. We have planned for our retirement since we were 25, you have to if you have any hope to gain financial wealth.
And as Candi pointed out...paying more on the mortgage principle every month will take time and interest off of your loan. Dh and I have done the same thing and we will pay our loan off in half the time AND we will save ourselves $52,000.00 in interest. That is real money saved.
You gain nothing by making rent payments.
Stringbean...there are alternative's to buying a single family dwelling. For people who don't want to do the upkeep and maintanence there are condos/townhouses.
And as Candi pointed out...paying more on the mortgage principle every month will take time and interest off of your loan. Dh and I have done the same thing and we will pay our loan off in half the time AND we will save ourselves $52,000.00 in interest. That is real money saved.
You gain nothing by making rent payments.
Stringbean...there are alternative's to buying a single family dwelling. For people who don't want to do the upkeep and maintanence there are condos/townhouses.
Housing prices in the NY metro area are sky high right now, and property taxes are even worse. We're trying to save so that when the housing market gets a bit saner, we have the money for a downpayment. Either that, or we'll save the money and move a bit further out into the NJ suburbs, where there are some new and somewhat affordable developments going up. I have the downpayment now to afford a condo is some of the "up and coming" areas in NY and NJ, but I really don't want to live in a condo that's really just a glorified apartment building. Plus "up and coming" translates to "drug dealers on the street around the block from your nice building." Not something that I would buy.
I guess I should find one of those rent vs buy calculators online. I've read a lot of articles about how renting is cheaper, and yes, a house is a bottomless money pit. The main selling point for me is not having to move every few years just because the landlord has sold the place/raised the rent to a ridiculous level, etc.
I guess I should find one of those rent vs buy calculators online. I've read a lot of articles about how renting is cheaper, and yes, a house is a bottomless money pit. The main selling point for me is not having to move every few years just because the landlord has sold the place/raised the rent to a ridiculous level, etc.
4
40something
Guest
Bunbun...don't think I'm picking on you but I can't resist this one...
"I've read a lot of articles about how renting is cheaper"
yeah, and those articles were written by RENTAL PROPERTY OWNER'S. ;-)
Seriously though, I think you would be hard pressed to find any certified financial planner who would agree with that. Look at it this way, let's say your rent is $1200.00 a month. That is $1200 gone from your life forever every singel month, twelve months a year (that's $14,000.00 per year!). Now, would you take that same $1200 and go to a casino once a month and pump it into a slot machine knowing it will never pay out? That would be pure folly wouldn't it.
Putting your money into a home is investing for your future. Real estate prices usually increase over time, not decrease, so your investment will grow and be worth more over time. Yes, owning a home does require maintanence but this is why you have the prospective home inspected BEFORE you buy so you are fully aware of it's condition and you then decide if you want to put money into repairs like a new roof or a new heating system.
For your area you certainly couldn't go wrong buying a townhome or a condo. You always want to try to buy real estate that you can resell should you need too and condos in the urban areas are usually a good investment. You need to do some homework and make sure the area you are thinking of buying in has been active for buying and selling.
Buying a home is a big step. And certainly take the advice of Sparrow and not buy more house then you can afford. You decide what monthly payment you can make without struggling and that is the amount you stick with. It may take months to find the right home...but you'll never find one if you never look.
Okay, end of Financial Planning 101 for today.
Oops, I wanted to add that buying a condo/townhome is a good investment because you can live in it until you decide you want a bigger home or just want a single family home...and you then can rent the condo for additional income/investment. And the one nice thing about condo's is the association takes care of the maintanence and you just have to replace appliances as they wear out.
Make your money work for you...don't work for your money!
"I've read a lot of articles about how renting is cheaper"
yeah, and those articles were written by RENTAL PROPERTY OWNER'S. ;-)
Seriously though, I think you would be hard pressed to find any certified financial planner who would agree with that. Look at it this way, let's say your rent is $1200.00 a month. That is $1200 gone from your life forever every singel month, twelve months a year (that's $14,000.00 per year!). Now, would you take that same $1200 and go to a casino once a month and pump it into a slot machine knowing it will never pay out? That would be pure folly wouldn't it.
Putting your money into a home is investing for your future. Real estate prices usually increase over time, not decrease, so your investment will grow and be worth more over time. Yes, owning a home does require maintanence but this is why you have the prospective home inspected BEFORE you buy so you are fully aware of it's condition and you then decide if you want to put money into repairs like a new roof or a new heating system.
For your area you certainly couldn't go wrong buying a townhome or a condo. You always want to try to buy real estate that you can resell should you need too and condos in the urban areas are usually a good investment. You need to do some homework and make sure the area you are thinking of buying in has been active for buying and selling.
Buying a home is a big step. And certainly take the advice of Sparrow and not buy more house then you can afford. You decide what monthly payment you can make without struggling and that is the amount you stick with. It may take months to find the right home...but you'll never find one if you never look.
Okay, end of Financial Planning 101 for today.
Oops, I wanted to add that buying a condo/townhome is a good investment because you can live in it until you decide you want a bigger home or just want a single family home...and you then can rent the condo for additional income/investment. And the one nice thing about condo's is the association takes care of the maintanence and you just have to replace appliances as they wear out.
Make your money work for you...don't work for your money!
LauraMax
Cathlete
Chiming in on this debate--I think whether it's better to buy or rent depends on the market. I chose to buy about two years ago & am selling now, & I stand to make a substantial amount on my house--enough for a downpayment on another, paying off all my debt, & having a little play money left over.
AND I got money back on my taxes for the first time last year. Not just a little bit either. It paid for like half my summer rental.
So, the downside of buying now is it's supposedly turning from a seller's to a buyer's market, meaning you won't make as much off a property as I am this year. But if you plan on staying there for a while that wouldn't make a difference.
The other downside to owning is you can't call your landlord when something breaks. I have a home warranty though, I've bought a new fridge & hot water heater over the last 2 years, cost me a total of $100.
AND I got money back on my taxes for the first time last year. Not just a little bit either. It paid for like half my summer rental.
So, the downside of buying now is it's supposedly turning from a seller's to a buyer's market, meaning you won't make as much off a property as I am this year. But if you plan on staying there for a while that wouldn't make a difference.
The other downside to owning is you can't call your landlord when something breaks. I have a home warranty though, I've bought a new fridge & hot water heater over the last 2 years, cost me a total of $100.
nancy324
Cathlete
My certified financial planner often recommends that people rent, and he is not a rental property owner. If you're young, you may not remember a time when people were stuck with real estate. I had a relative who couldn't sell for 10 years without taking a substantial loss, so he just stayed where he was, even though he desperately wanted to move. Real estate is not like other assets in that it produces absolutely no income. If you put too large a chunk of your money into real estate, that portion of your portfolio is not diversified. There are umpteen reasons to rent instead of buy. And saying that rental money is money down the drain is like saying that buying food or paying for a haircut is money down the drain. You receive substantial value for your money. I strongly believe that it is a mistake to buy real estate unless you (the general "you") find the right place in the right neighborhood, where you want to put down roots and stay indefinitely.
-Nancy
-Nancy
This is an interesting thread. Here's how I look at it, based on my own experience. I rented for most of my twenties. I had wanderlust and, as Nancy point out, it would not have been practical to buy a home somewhere. But, now that I am more settled, owning a home is not just about having a place to stay, it's about building into the future and making my money work for me. After renting all those years, I had nothing to show for it but a pile of cancelled rent checks. After owning for a number of years I have cancelled mortgage checks, but I also have equity in my home. I have tax breaks. I have a house that has appreciated considerably, which I can use to springboard into another property, if I chose to do so. So owning a home might not produce a weekly or monthly income, but it does provide more long-term financial value, IMO, than renting does. I know some financial planners may advise clients that renting is better for their circumstances, but I would be surprised to find many who say that a rental apartment is a financial asset, especially over the longterm.
And, there is also the psychological factor of not being at the mercy of a landlord in terms of rent increases, not renewing leases etc.
Just my opinion.
Sparrow
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in sideways, thoroughly used up, totally worn out, and loudly proclaiming ‘Wow - what a ride!’ — Peter Sage
And, there is also the psychological factor of not being at the mercy of a landlord in terms of rent increases, not renewing leases etc.
Just my opinion.
Sparrow
Life is not a journey to the grave with the intention of arriving safely in a pretty and well preserved body, but rather to skid in sideways, thoroughly used up, totally worn out, and loudly proclaiming ‘Wow - what a ride!’ — Peter Sage
4
40something
Guest
Nancy...back in the late 80's real estate was all over the place. Where H and I were living, houses were going for cheap. A friend of ours in a large city bought a new townhouse in that time period and way overpaid for the property but he couldn't be talked out of it. When he and his wife decided to build a new house, the townhouse had depreciated so much in value they couldn't afford to sell it so they rented it out. They still own that same townhouse because the husband refuses to sell it until he can get out of it what he paid. But, at least they have the rental income and the tax deduction.
Anyway, back to H and myself...we were newlywed's both working good paying jobs and we found a terrific house that we rented for almost 5 years...for $125.00 a month. Yes, that is not a typo! But where we were living the housing market was depressed and houses were not selling so owner's were just happy to get someone to rent. We lived on my income and invested all of DH's checks for the future purchase of a house. Back in those days, you needed a 25% down payment on a rural acreage/farmette because people were defaulting on mortgage loans left and right. Banks didn't want to be stuck with a rural property they couldn't sell so we knew we would need a big chunk of change to buy what we wanted.
So...yes indeed, real estate can go both ways. But unless a person can rent an immaculate four bedroom house for $125.00 a month...buying is a smarter use of your money than renting.
I forgot to mention...at the time we were renting that house...we were renting OUT another house that we owned and had moved from because we couldn't get it sold. It took us three years to sell that house but we were able to keep it rented and keep good people in there who took care of it for us but it's a pain to own rental property that is 100 miles away from where you live.
Anyway, back to H and myself...we were newlywed's both working good paying jobs and we found a terrific house that we rented for almost 5 years...for $125.00 a month. Yes, that is not a typo! But where we were living the housing market was depressed and houses were not selling so owner's were just happy to get someone to rent. We lived on my income and invested all of DH's checks for the future purchase of a house. Back in those days, you needed a 25% down payment on a rural acreage/farmette because people were defaulting on mortgage loans left and right. Banks didn't want to be stuck with a rural property they couldn't sell so we knew we would need a big chunk of change to buy what we wanted.
So...yes indeed, real estate can go both ways. But unless a person can rent an immaculate four bedroom house for $125.00 a month...buying is a smarter use of your money than renting.
I forgot to mention...at the time we were renting that house...we were renting OUT another house that we owned and had moved from because we couldn't get it sold. It took us three years to sell that house but we were able to keep it rented and keep good people in there who took care of it for us but it's a pain to own rental property that is 100 miles away from where you live.
How is buying a smarter use of your money if you absolutely do not have the money to do that? We'd love to buy but it's not feasible now, and we cannot really move much out of the area we are in due to DH's job. Actually, we pay a pretty decent rent for what we get, and I like not having yard maintenance at the moment. So, it can be greener on either sides of the fence, I guess.
Live with sincerity, love with passion, and dance like you mean it.
Debbie
Live with sincerity, love with passion, and dance like you mean it.
Debbie
toughYrun
Cathlete
I need to chime in here. My DH and I have two homes. One is a rental and we live in the other. House #1 was purchased in 1998 for $141,000 and is now worth $475,000. House #2 was purchased in 1999 for $300,000 and is now worth $800,000. Sorry, but I don't see how paying the mortgage for either of these houses in the form of rent would be cheaper. I realize that home appreciation is not as great in other parts of the country, but you get zero return when you rent wherever you live. A mortgage stays the same for the length of the loan (unless your have an ARM or refinance, of course). I'd say if you can afford it and plan on staying in it for a long time then I would most definately buy.