[Villager1234]

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

[Stu from NYC]

Originally Posted by Villager1234

Yesterday I read about the lady who is having problems with house closing
There are alternatives to purchasing. I moved here 2 years ago, finally found a yearly rental
I closed on my house up north last month. Instead of buying a house I am seriously considering renting permanently. A 5% cd pays all of my bills and don’t have to worry about any maintenance,water bills,sprinklers Many of my friends miss activities to meet repairmen. I am a retired tradesman and don’t care if I ever pick up a tool again

More power to you but what happens to your budget when interest rates go down?

[Villager1234]

I think I can survive on my pension and social security. If I can’t I can get a NYC address and get a free EBT card, cell phone, and $1000 for rent

[Villager1234]

Seriously, if you add up the cost of potiental repairs and maintenance increases
It might be financially prudent to rent

[Two Bills]

When you total up all the annual outgoings, build in ongoing major replacements, re-roofing etc. full time rental in TV is a viable option in my book.
You have all the capital from previous house sale, invested for income/growth, which should cover any capital appreciation from house owning, plus for most retirees, income from investments and pensions.
Another bonus is you can move to a better location or deal whenever you feel like a change, and all you have to do is pack your suitcases!

[Villager1234]

I believe that the rental market is getting more affordable. I am told that almost 50% of new purchases down south are investors. This can cause rents to drop

[JMintzer]

Originally Posted by Villager1234

I believe that the rental market is getting more affordable. I am told that almost 50% of new purchases down south are investors. This can cause rents to drop

"Told" by whom?

[villagetinker]

I guess I am missing something, but the owner of the rental will eventually need to recoup some (maybe all) of the previously mentioned expenses, by increasing the rent. I am going to watch where this discussion goes.

[MightyDog]

I was crunching numbers on this very thing about a month ago and, in some cases, the OP is right.

Don't have the math paper right in front of me but, as rough example: If you have 250 to 300K in cash that you were going to use to buy a house and instead buy a T-Bill or CD for almost 5% that generates $12,500 annually for the 250k and $15,000 for the 300K.

I've seen monthly rents on many decent homes at $2000 so, 24K per year cost to rent. The rents include: water, sewer, trash, landscaping, pest control, amenity fee, repairs and, of course, property tax. Renter pays for electric, cable and internet....as additional cost.

So, if you add all the items the owner covers (that would be additional cost to you if you plunked down the big cash for a home purchase) it starts to get quite interesting to rent. My final numbers were something like $6000 or $7000 net out-of-pocket on an annual basis to rent currently if you don't require large or fancy digs.

[Stu from NYC]

Originally Posted by MightyDog

I was crunching numbers on this very thing about a month ago and, in some cases, the OP is right.

Don't have the math paper right in front of me but, as rough example: If you have 250 to 300K in cash that you were going to use to buy a house and instead buy a T-Bill or CD for almost 5% that generates $12,500 annually for the 250k and $15,000 for the 300K.

I've seen monthly rents on many decent homes at $2000 so, 24K per year cost to rent. The rents include: water, sewer, trash, landscaping, pest control, amenity fee, repairs and, of course, property tax. Renter pays for electric, cable and internet....as additional cost.

So, if you add all the items the owner covers (that would be additional cost to you if you plunked down the big cash for a home purchase) it starts to get quite interesting to rent. My final numbers were something like $6000 or $7000 net out-of-pocket on an annual basis to rent currently if you don't require large or fancy digs.

You are omitting what happens when interests rates go down not to mention annual increase in rents.

[MightyDog]

Originally Posted by Stu from NYC

You are omitting what happens when interests rates go down not to mention annual increase in rents.

1) Interest rates may not go down to any significant degree for quite awhile.
2) Often owners will not raise rent (or only slightly) in order to keep solid tenants. That's always better than sitting for months with no $$ coming in while waiting for a new one.
3) Renter may make a different decision about rent vs buy in the future if condition change.

[Stu from NYC]

Originally Posted by MightyDog

1) Interest rates may not go down to any significant degree for quite awhile.
2) Often owners will not raise rent (or only slightly) in order to keep solid tenants. That's always better than sitting for months with no $$ coming in while waiting for a new one.
3) Renter may make a different decision about rent vs buy in the future if condition change.

If these are your expectations hope you have a rainy day fund if you are wrong.

[jimbomaybe]

Originally Posted by Stu from NYC

You are omitting what
happens when interests rates go down not to mention annual increase in rents.

Taxes on the income, write off on mortgage interest, of course there are many things that only the future will reveal, home ownership has always been a reasonably good investment in the longer term, at least in the past

[Randall55]

Originally Posted by MightyDog

1) Interest rates may not go down to any significant degree for quite awhile.
2) Often owners will not raise rent (or only slightly) in order to keep solid tenants. That's always better than sitting for months with no $$ coming in while waiting for a new one.
3) Renter may make a different decision about rent vs buy in the future if condition change.

We are currently renting a small home for $1950 a month. We have to pay electric and wifi. Our social security checks pay for all plus plenty to spare for food and necessities. Our money is sitting collecting interest. We understand this can not be a forever situation. We know the cost of living will eventually go up.

We are watching the housing market carefully and looking for a home that will provide us with equity on day one. Deals are out there! We found a few but passed because they were not our ideal. When we find THAT ONE, we will pounce on it. If it needs remodeling, we are okay with that.

We went through every floor plan of new construction homes and there is not one we would not have to change to fit our comfort level. For us, buying a preowned will be cheaper long term. (No bond, lower taxes, low maintenance, etc) We are hoping the money we earn in interest will significantly help cover the cost of remodeling.

Everyone has to crunch their own numbers. In this housing market, It is a gamble whichever path you choose. We are waiting for a golden opportunity that keeps us at the lowest risk. There is a saying, 'good things come to those wait." Will it work for us? Or, are we being penny wise and pound foolish? Only time will tell.

[Randall55]

Originally Posted by Villager1234

I believe that the rental market is getting more affordable. I am told that almost 50% of new purchases down south are investors. This can cause rents to drop

50% or more of scheduled closings seem to be buyers from Florida. Some are investors.

You misunderstood. This in NO WAY equates to 50% of ALL new home purchases are investors. The percentage of investors is probably between the 10-20% mark. This percentage will vary based on the location of new homes. Homes close to squares usually have a higher percentage.