We hatched 3 eggs, and we are renting. Nestingcouple, we sold our house in Jan 06 and are renting out the downturn. I have 1 in elementary school, and 2 in high school. Our family loves renting, although our rental is not nearly as nice as the home we sold. I, a woman, value the financial security over home ownership. Possibly because I have owned several homes, I don’t have that “gotta have a house” itch anymore.
To your costs, add $500/month for Home Depot and remodeling costs. Don’t let anyone tell you it’s only $100. All you need is one broken pipe or leaking roof to blow through $10K – $15K. My neighbor had a bust pipe that her insurance didn’t cover (flood) so they had a hug expense in replacing all downstairs flooring and furniture.
All all the “I want…” items: furniture and draperies to fill the space, matching towels/sheets (who cares in a rental, but when it’s your own house, you want it to be perfect), landscaping, upgrading for energy conservation (replacing windows). If I owned this rental, I would already have spent a ton, replacing the old windows, the carpet, painting, new countertops, better flooring and baseboards, better landscaping. The truth is, as a homeowners, you spend a ton of money making everything nicer. So it’s not just the repairs and maintenance, it’s the improvements, and it is constant. Our biggest savings in renting is eliminating all those home improvements.
My suggestion is to get a rental you really like, and invest a couple grand in painting it, or adding some landscaping, and make it nice. It’s a lot lot cheaper to sink a tiny bit into a rental than to lose several hundred thousand grand on a place you own. We bought a lot of potted plants, including several trees and ivy plants, that we will take with us when we move. I consulted with a tenant attorney before I signed my 2 year lease.
I love ocrenter’s suggestion to use that same money to buy one house plus several rentals. If you don’t mind living in a duplex, you can live on one side and let your tenant on the other side pay the entire mortgage.
To your rent-buy calculator, add a 5-10% annual decline in nominal house prices. Personally, I expect a 30-50% nominal decline before this is all over, and I believe that we will not be back to today’s prices in my lifetime.
