apartment therapy changing the world, one room at a time

In a perfect world own, but then you would have to find the money to buy it. Always a sticking point here.

To own is the dream, renting is the reality.

I own. We just sold our flat and are looking for the next place, hopefully the place we'll stay in for awhile. We bought our first house in Austin, then sold it to buy a place in San Francisco. It was definitely a compromise, that flat. Dark, street-level, a claustrophobic TIC. But we needed to get into the market, and it was the only place we could find that we could afford. Four years (and an extensive remodel) later, we're renting again while we look for the next step up in the quest for the perfect house. It's hard to get into the market, but once you do, it's such a worthwhile investment.
Easier said than done, right?

By renting instead of buying, I save over $1000 per month, all of which I invest immediately. I get to maintain my mobility and freedom. When things break, I fix them and deduct the expenses from my rent. Life is a lot simpler this way.

A friend recently told me some of the best advice he'd ever been given. His ethics professor's closing words for a class: don't overextend yourself financially because then finances will make your decisions, rather than your sense of doing what's right.

Buying is certainly right for many people (especially in cheaper markets), but it makes me so sad to see people put themselves in horrible stressful situations for a holy grail that, while pretty great, may not be ALL that. Google rent vs. own calculators; the results may surprise you when you do all the math- with the cost of real estate here and now, the decision is not the no-brainer it used to be.

I own, and feel house-poor all the time. But I don't see how you can get ahead by renting.

On another topic, do the friendly readers on this site have any recommendations for movers and house painters in the area. Thanks!

There are benefits to both. For myself, I try to leave the emotions out of it. Emotionally, psychologically, I would love to own, to have a place that I can call "mine", even if it techincally belongs to the bank for 30 years.
The reality though is that for me, it makes the most sense to rent. When I do the math, it would cost me approximately $1200 more each month to buy a place the size of my current rental in the same area of the city. The mortgage payment would only be about $200 more than my rent, but by the time I add in homeowner's insurance, monthly maintenance, property taxes, etc. things add up quickly. I also then have that 20% down payment in my house instead of invested where it is earning lots of interest.
Another major factor for me is the ability to just pick up and leave. We (wife and I) will likely move in a couple of years. If you aren't certain that you are going to stay in one area for quite a few years it is rarely worth it to buy. Closing costs, loan fees, agent commissions - I heard an estimate once that a round-trip in and out of a house is approximately $20,000.
The first few years you build up very little equity, so unless you plan on staying somewhere for a while, OR unless you are certain of appreciation (a real gamble where I live) it's hard to make such a big commitment.
Of course it varies on what part of the country you live in. It seems like rentals are generally a better bet in larger cities while buying is generally a better bet in rural areas.
I think the most important thing is buying for the right reasons. Buy because it makes the most financial sense for you and your family, not because somebody makes some cliched comment like "renting is throwing your money away." That isn't always the case.

I rent, in a small town on the edge of the DC Metro. For the last five years, sale prices have climbed 15-20%, and I can't tell you how many times people have called me stupid to my face for not buying ("You're throwing your money away"). Now, the market is dropping, and the buzz is that foreclosures are coming, as a lot of people in the last two years bought interest-only mortgages on places they really couldn't afford in the first place.

Of course, I'd love to buy one day, but I'm with Ben - you need to buy for the right reasons, which means because it's both financially advantageous and that you're buying a place you want to own in a place you want to live. For my (cheap, for the area) rent, I get to live in an historic district within walking distance to work - something I just couldn't do if I owned. And I know people who make really good salaries who are now house poor, between mortages and crazy condo/housing associations fees. To buy even a condo in this area, I'd have to spend 2x-3x my rent, and then move away from the town center - neither of which interests me.

So, for now, I'm happy to call the landlord when a problem crops up (which happens with regularity - it's an old place :), and to sock the extra money I'd be paying for a mortgage into savings.

As an aside, some of those people who've told me how crazy I am to rent have moved 40-50 miles in order to buy single family houses. I wonder what the real cost of a two-two and a half hour daily commute is in terms of both wear and tear and time lost?

When I made the switch from renting to owning, my monthly expenses actually went down by about $200 a month. After renting for years, I was just tired of having to deal with landlords who never fixed what they were supposed to, having no (practical) recourse if you feel ripped off and just generally having to worry about noise levels.

So, my partner and I made the leap to buy, and it's very possible - even though my partner wasn't employed at the time we bought. The main thing in our advantage was that we had enough savings to pay a lot down and thus avoid mortgage insurance. Plus, living in a growing housing market (Edmonton, Alberta), the value of my home has already appreciated significantly - if we sold now, just 7 months after buying, we'd be making money, even taking the costs of buying into consideration.

I'd recommend buying to anyone who can afford it. Just knowing that you're paying yourself each month rather than paying a landlord is wonderful, and if you're in an economically booming locale, it makes sense financially as well.

We rent. Unless you need something that rentals just can't provide, the time to buy is when owning is cheaper overall than renting.

Had we bought in SF in 2003, we would have doubled our monthly costs and found ourselves trying to sell an apartment in a flat, slow market. The best we could have done is break even on sale price -- when you consider realtor commissions, HOAs, mortgage interest above what comes back as a tax deduction, and lost opportunity costs from the excess money spent on housing, "breaking even" would have represented a substantial loss (upwards of $50,000, which isn't chump change in our household).

We chose to rent here in Phoenix because condos are declining rapidly in value -- I'm not making a down payment just to *lose* equity as values drop. We're probably paying less in rent than our landlord pays on his mortgage and HOAs.

When the market hits bottom, if we're somewhere we want to stay at least five years, then we'll consider buying.

My husband and I rent a house in the Sunset district. We've been very lucky in the rent department. Born and raised in the City, many of our friends and their parents own property, and because of that we have been very fortunate to rent for below market rate. Plus our landlords in all cases rarely raised our rent. We've pushed around the idea to buy, but now with aging parents (who also rent) we need to be flexible in case something happens.

The home we rent now is large enought that if need be (and that time is coming soon!) that my parents will come live with us. Would love to someday own a condo/flat/home here, but right now I just can't go through that stress.

Yeah, money is tight, but it could be tighter. So I'll keep thanking my lucky stars that I have great friends that aren't greedy landlords : )

I used to live in a 700ft rent-controlled studio apartment in Berkeley. I stayed there 10 years and the rent ended up being $750/month when I left. That's significantly less than the maintenance fees I would have to pay if I were to buy any decent flat in Manhattan. Plus the apartment and neighborhood was loads better than what I have now in NY (my personal preference).

Like another poster, I was saving loads of cash renting [in Berkeley]. I actually daydreamed about renting the other apartments on the floor should I have children and give them their own spaces.

I agree that the renting vs. buying is dependent on where you live. I will be buying a house sometime next year in Jersey, CT or upstate NY as buying (or renting) in Manhattan just does not make sense to me. My neighbor owns her apartment and bought it during the relatively low cost times of the early 90s. However, she has had to pay an exhorbitant temporary increase in her maintenance fees for the past year due to signicant work on her building. What good is buying when you can't be fairly certain what your monthly outlay will be and have no choice in the matter?