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(former)FormerSanDiegan
ParticipantI think some others jumped the gun on their advice by saying you should not buy because you do not have enough saved (10% down). They assumed (perhaps correctly) that you had no other assets than the amount you mentioned for a down payment.
Before suggesting that you have no business buying in your situation I would ask how much you have in other assets (401k, IRA, brokerage accounts, etc).
If, for example, you have 2X the amount you have saved for down payment in these other accounts, I would consider buying, especially if the place you buy could be rented out nearly break even or positive cash flow.
The retirement accounts can serve as an emergency backup and if the property could break even you have a contingency plan.
I don’t see a problem buying prudently right now with less than 20% down. I would not be in big a hurry, though.
ParticipantHey, you asked for examples. I gave examples.
Some folks are applying extra conditions (such as normalizing by time or use) or trying to make examples that are analogous to a house.The problem is that there are probably no other analogues. Food, shelter and clothing are very basic essentials. Food and clothing are typically consumed over much shorter time frames than shelter. These facts and the presence of inflation make finding an analogue to rent/purchase of housing very difficult, if not impossible.
ParticipantHey, you asked for examples. I gave examples.
Some folks are applying extra conditions (such as normalizing by time or use) or trying to make examples that are analogous to a house.The problem is that there are probably no other analogues. Food, shelter and clothing are very basic essentials. Food and clothing are typically consumed over much shorter time frames than shelter. These facts and the presence of inflation make finding an analogue to rent/purchase of housing very difficult, if not impossible.
ParticipantHey, you asked for examples. I gave examples.
Some folks are applying extra conditions (such as normalizing by time or use) or trying to make examples that are analogous to a house.The problem is that there are probably no other analogues. Food, shelter and clothing are very basic essentials. Food and clothing are typically consumed over much shorter time frames than shelter. These facts and the presence of inflation make finding an analogue to rent/purchase of housing very difficult, if not impossible.
ParticipantHey, you asked for examples. I gave examples.
Some folks are applying extra conditions (such as normalizing by time or use) or trying to make examples that are analogous to a house.The problem is that there are probably no other analogues. Food, shelter and clothing are very basic essentials. Food and clothing are typically consumed over much shorter time frames than shelter. These facts and the presence of inflation make finding an analogue to rent/purchase of housing very difficult, if not impossible.
ParticipantHey, you asked for examples. I gave examples.
Some folks are applying extra conditions (such as normalizing by time or use) or trying to make examples that are analogous to a house.The problem is that there are probably no other analogues. Food, shelter and clothing are very basic essentials. Food and clothing are typically consumed over much shorter time frames than shelter. These facts and the presence of inflation make finding an analogue to rent/purchase of housing very difficult, if not impossible.
Participant[quote=scaredycat] In wha other area is buying NOT cheaper than renting. [/quote]
Since you asked there are plenty of cases where renting is cheaper than buying. Here are some examples :
1. Renting a seat on an airplane is much cheaper than buying the aircraft for all my trips.
2. Renting a car when I travel is cheaper than buying one. (Same with the hotel room, etc)
3. My tux for my Junior prom.
4. Rent for the hall where we had our wedding reception was cheaper than buying it.
5. My company’s lease (so far after 5 years) is much less expensive than purchasing a similar building.
6. I rented an RV several times. Cheaper than buying.
7. We take a boat to Catalina at least a couple times a year. Renting one is cheaper than buying.
8. U-haul truck.
9. Internet access.
10. Movies on DVD.
Participant[quote=scaredycat] In wha other area is buying NOT cheaper than renting. [/quote]
Since you asked there are plenty of cases where renting is cheaper than buying. Here are some examples :
1. Renting a seat on an airplane is much cheaper than buying the aircraft for all my trips.
2. Renting a car when I travel is cheaper than buying one. (Same with the hotel room, etc)
3. My tux for my Junior prom.
4. Rent for the hall where we had our wedding reception was cheaper than buying it.
5. My company’s lease (so far after 5 years) is much less expensive than purchasing a similar building.
6. I rented an RV several times. Cheaper than buying.
7. We take a boat to Catalina at least a couple times a year. Renting one is cheaper than buying.
8. U-haul truck.
9. Internet access.
10. Movies on DVD.
Participant[quote=scaredycat] In wha other area is buying NOT cheaper than renting. [/quote]
Since you asked there are plenty of cases where renting is cheaper than buying. Here are some examples :
1. Renting a seat on an airplane is much cheaper than buying the aircraft for all my trips.
2. Renting a car when I travel is cheaper than buying one. (Same with the hotel room, etc)
3. My tux for my Junior prom.
4. Rent for the hall where we had our wedding reception was cheaper than buying it.
5. My company’s lease (so far after 5 years) is much less expensive than purchasing a similar building.
6. I rented an RV several times. Cheaper than buying.
7. We take a boat to Catalina at least a couple times a year. Renting one is cheaper than buying.
8. U-haul truck.
9. Internet access.
10. Movies on DVD.
Participant[quote=scaredycat] In wha other area is buying NOT cheaper than renting. [/quote]
Since you asked there are plenty of cases where renting is cheaper than buying. Here are some examples :
1. Renting a seat on an airplane is much cheaper than buying the aircraft for all my trips.
2. Renting a car when I travel is cheaper than buying one. (Same with the hotel room, etc)
3. My tux for my Junior prom.
4. Rent for the hall where we had our wedding reception was cheaper than buying it.
5. My company’s lease (so far after 5 years) is much less expensive than purchasing a similar building.
6. I rented an RV several times. Cheaper than buying.
7. We take a boat to Catalina at least a couple times a year. Renting one is cheaper than buying.
8. U-haul truck.
9. Internet access.
10. Movies on DVD.
Participant[quote=scaredycat] In wha other area is buying NOT cheaper than renting. [/quote]
Since you asked there are plenty of cases where renting is cheaper than buying. Here are some examples :
1. Renting a seat on an airplane is much cheaper than buying the aircraft for all my trips.
2. Renting a car when I travel is cheaper than buying one. (Same with the hotel room, etc)
3. My tux for my Junior prom.
4. Rent for the hall where we had our wedding reception was cheaper than buying it.
5. My company’s lease (so far after 5 years) is much less expensive than purchasing a similar building.
6. I rented an RV several times. Cheaper than buying.
7. We take a boat to Catalina at least a couple times a year. Renting one is cheaper than buying.
8. U-haul truck.
9. Internet access.
10. Movies on DVD.
ParticipantI would only offer reduced rent if they IMMEDIATELY catch up on back rent. Your plans for possibly moving in next year seem flexible, so there is time to have another tenant in there for a year.
My threshold for giving a break is about 1/2 month’s rent. Once they exceed that point it typically does not turn out in your favor to give additional latitude. They are likely paying other creditors who are less forgiving (e.g. credit card companies). You need to be higher up on their list of priorities. You can offer a carrot (reduced rent for the next 4 months if they pay all back rent) a stick (3-day notice) or both (EconProf’s suggestion).
Either way you will lose about a months rent or more, either in vacancy between tenants or in discount the next 4 months to the current tenant.
In any case this is not a long-term solution. You either need to plan on getting new tenants or moving back in as you suggested you might. The predicament of the existing tenants is your short-term problem, treat it as such.
ParticipantI would only offer reduced rent if they IMMEDIATELY catch up on back rent. Your plans for possibly moving in next year seem flexible, so there is time to have another tenant in there for a year.
My threshold for giving a break is about 1/2 month’s rent. Once they exceed that point it typically does not turn out in your favor to give additional latitude. They are likely paying other creditors who are less forgiving (e.g. credit card companies). You need to be higher up on their list of priorities. You can offer a carrot (reduced rent for the next 4 months if they pay all back rent) a stick (3-day notice) or both (EconProf’s suggestion).
Either way you will lose about a months rent or more, either in vacancy between tenants or in discount the next 4 months to the current tenant.
In any case this is not a long-term solution. You either need to plan on getting new tenants or moving back in as you suggested you might. The predicament of the existing tenants is your short-term problem, treat it as such.
ParticipantI would only offer reduced rent if they IMMEDIATELY catch up on back rent. Your plans for possibly moving in next year seem flexible, so there is time to have another tenant in there for a year.
My threshold for giving a break is about 1/2 month’s rent. Once they exceed that point it typically does not turn out in your favor to give additional latitude. They are likely paying other creditors who are less forgiving (e.g. credit card companies). You need to be higher up on their list of priorities. You can offer a carrot (reduced rent for the next 4 months if they pay all back rent) a stick (3-day notice) or both (EconProf’s suggestion).
Either way you will lose about a months rent or more, either in vacancy between tenants or in discount the next 4 months to the current tenant.
In any case this is not a long-term solution. You either need to plan on getting new tenants or moving back in as you suggested you might. The predicament of the existing tenants is your short-term problem, treat it as such.
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