vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"I'm a ""new"" (last 2 years) homeowner.  For me, at least, benefits of owning far outweigh renting.  $8000 tax credit for the first time homebuyer, a massive deduction every year for your tax return, the option to rent out rooms to offset the large majority of my mortgage payment, and the real estate trend indicating that the value of my house *should* increase over time.  I think that if one has the means to buy in the current environment rather than renting, they certainly should.  You get no return on your money if you rent."
Property in general tends to go up in value.  That's one advantage you won't get if you rent.
When you deduct insurance, taxes, maintenance, etc from that $800, you may find you are still throwing away most of your monthly payment on interest and expenses you wouldn't have if you rented. The money you do ""save"", after interest and expenses, isn't really saved. Housing markets go up and down, but on average, over the long term, they go up just enough to keep up with inflation, meaning a 0% real return. If renting means less cash out of pocket per month, you can put that extra cash towards investments that yield a much higher return. Sure, you may need to continue making rental payments in perpetuity, but you can save enough extra money to pay for the rental in investment income. Again, it depends considerably on how the housing and rental markets compare where you live. Popular cities (San Francisco, New York, Paris, etc.) tend to favor renting. Unpopular cities (Detroit, St. Louis) and rural areas tend to favor buying. Further reading: Mr. Money Mustache: Rent vs. Buy: If You Have to Ask, You Should Probably Rent"
There's also the option to put most of your stuff into storage and rent an apartment or go to an extended stay hotel.  Some apartments have month-by-month options at a higher rate, though you may need to ask around.   I've known some people to use this as their primary plan because it was easier for them to keep the house clean and ready to show when it's empty.  Basically, this option is to sell your current house then buy the new house with a (hopefully fairly short) transition time in the middle.
Since then I wanted to move out of this house because the property taxes are so high and the mortgage payment is a killer. As I understand this is a property jointly owned by your parents and you. As they are not living staying in the house, you have taken over the mortgage payments for this house along with any other maintenance. If you move out of this house; the rent is expected to cover the cost of maintenance and mortgage payments. Are we better of staying in Jersey where our family and friends are?  This is an individual decision. It is not just family and friends, but also schooling of kids, penitentially if you change jobs would it also entail changing residence as the workplace would be more near from current home than the new home. I want to convince my wife to make this move because it will save us at least 800 month, but she fails to see how buying a second home is financially sound because we have to lose our savings and we have to pay interest on our second home. There are quite a few posts on first-time-home-buyer Some question like this one and this one and this one are good reads. There are historically times when the Mortgage EMI becomes equal or less than Rent paid. In such times it is good to buy home, than pay rent. Otherwise quite a few invest advisor's mention that fools buy house and wise live in it. There are advantages to buying as well advantages to renting. There is no simple answer and it depends on multitude of factors.
Seems pretty stupid to buy when switching jobs every 2-4 years yields the greatest gains in salary.  Why would you want to grow roots in an area for 15-30 years when you might be better off changing jobs/locales?   Sure you don't have to keep your house that long but with all the extra costs and risks renting is a fine option for an upwardly mobile citizen.
First off, I'd highly recommend looking at this nytimes rent vs buy calculator. This calculator gives you some great flexibility (for example, estimating what will happen with a 7% return in the stock market, and comparing renting vs buying). Secondly, I have personally gotten a lot out of this wall street journal book. Check it out at the library or buy it and read it cover to cover.  My personal opinion is that buying a house or condo is mostly a lifestyle choice.  Some specific caveats with your situation: A sidenote: One of my friends who bought a condo in chicago is considering moving to a different city and is very much regretting buying a condo, even though he got the $8k housing credit, because renting isn't as easy as it looks (you can do it and do it profitably but you darn well better consider that BEFORE buying a condo)
The 3% and 9% figures are based on the cost of borrowing money and all the other ownership costs associated with real estate.  From the same article: http://patrick.net/housing/crash1.html Because it's usually still much cheaper to rent than to own the same   size and quality house, in the same school district. In rich   neighborhoods, annual rents are typically only 3% of purchase price   while mortgage rates are 4% with fees, so it costs more to borrow the   money as it does to borrow the house. Renters win and owners lose!   Worse, total owner costs including taxes, maintenance, and insurance   come to about 8% of purchase price, which is more than twice the cost   of renting and wipes out any income tax benefit. Imagine you are renting a house. If the cost of your annual rent is lower than X then renting is obviously the best idea from a monetary calculation. If rent is greater than Y being a landlord makes more sense. In the middle it is debatable, and the non-monetary reasons need to be considered.
If you have a view on housing you can buy a real estate investment trust and use proceeds to pay rent. Downside is, depending on where you live, you'll have to pay tax on dividend income from REITs. So if you invest the same amount in a REIT as in a house you'll effectively loose some money due to the tax. You can also think of it this way: you wouldn't pay tax on the rent that you don't have to pay as a result of owning a house, but you pay tax on rent that other people pay you.
Strictly from a money perspective, the renter is going to be the best option, IF you get reliable tenancy for the entire life of the mortgage on that house; you'll be paying $2020/mo for 30 years, which is $727,200, to end up with $950k of total home value (plus adjustments for actual home value appreciation/depreciation). That's the only way you'll come out ahead on any mortgage; have someone else pay most of it for you. If you don't rent, the $800k home will cost you $1,099,800, while two $450k homes will cost you $1,454,400. The percentage of home value over total payments for the 800k home would be 72% (you will have paid 137% of the value of the home), while you will have paid 153% of the value of two 450k homes.
i would recommend that you establish a landlord/tenant relationship instead of joint ownership (ie 100% ownership stake for one of you vs 0% for the other). it is much cleaner and simpler.  basically, one of you can propose a monthly rent amount and the other one can chose to be either renter or landlord. alternatively, you can both write down a secret rental price offer assuming you are the landlord, then pick the landlord who wrote down the smaller rental price.  if neither of you can afford the down payment, then you can consider the renter's contribution an unsecured loan (at an agreed interest rate and payment schedule). if you must have both names on the financing, then i would recommend you sell the property (or refinance under a single name) as quickly as possible when the relationship ends (if not before), pay the renter back any remaining balance on the loan and leave the landlord with the resulting equity (or debt).  in any case, if you expect the unsecured loan to outlive your relationship, then you are either buying a house you can't afford, or partnering on it with someone you shouldn't.
"Buying a house is often more emotional than financial. Which makes that kind of advice tough to offer. Staying with the finance side - You wrote ""2 bedrooms is enough for me."" Is it enough for your girlfriend/fiancee? Is she on the same schedule for kids as you are? 2 bedrooms means that with just one child you are less able to host a guest and the second child will need to share the bedroom. Nothing wrong with that, just making sure you are aware of these things. If the long term plan is to move to a new house, a ten year horizon for the second house sounds good to me.  I'll make one brief comment on rent vs buy - it's easy to buy too big and discover you are paying for rooms you don't use. I have a house I'll be glad to get rid of when our daughter goes off to college. A dining room and formal living room go unused save for 3 or 4 days a year. It already sounds like you'll avoid this mistake.  Your question - the right time - when you are ready, with the downpayment, income, and desire to do so. You should at least have a feeling you plan to stay there for a time, else the cost of buying/selling would exceed any potential gain."
I did this about 8 years ago with a buddy in Chicago for the reasons specified in the original post.  As other posters have suggested, we discussed  a lot of the same questions listed above, figured out the possible scenarios, and then had a lawyer draw up a contract.  We bought a 3 bedroom house, and rented out the 3rd bedroom.  Overall, it was a great experience.  We both built equity while having a renter pay a third of the mortgage.  Plus the property tax and interest on the loan were tax deductible.  Compared with renting an apartment, it made us  a lot more money.  In the end, we sold the house, and split the profits.  Assuming you have the personalities to make it work, I say go for it.
I would use that money to buy a car instead of taking out a loan to buy the car.   It does however prompt the question:  What do you want more a house or a car?
Where do you live? I have not seen a single instance where renting is cheaper per month then purchasing a home. You are obviously doing well, so I'm not questioning the logistics just curious.   $200,000 home or less is roughly $1,300 - $1,500 a month with everything included (property taxes, etc), based on when I was looking at homes to purchase. To rent the same size home would have been about the same (or more) depending on the area. Texas and California being my main two areas of interest. The property I purchased now was being rented out for $1,100 but a 30-year fixed mortage w/ property taxes is only about $630 a month.
"Depending on where you live in the UK, buying a house sooner might be a better option. I would echo the advice about putting some money away into a ""rainy day"" fund etc. above but I know that in my area house prices are going up by around 7% per year. I bought a house two years ago and I'm paying 4% interest on my mortgage so I'm effectively making money by owning my house.  Given that you want to buy a house soonish, if your money sits in an account somewhere making no interest, you're effectively losing 7% of your cash each year by not keeping up with house prices, meaning you'll be able to afford a smaller house with the same money. Do bear in mind though that buying a house costs around £4k in lawyers fees, surveys, mortgage setup fees etc. and selling a house can be more since estate agents will take a % of the sale cost. If you live somewhere where house prices are not increasing as quickly then this will not be as good an option than if you live in e.g. London where house prices are currently skyrocketing. If you don't want to live in the house, you may be able to do a buy-to-let as an investment. Generally the rent will cover the mortgage payments and probably a letting agent/property management company's fees, so while you won't see any actual net income, the people renting will be paying the mortgage off and you'll be building equity on the home. It's not entirely without risk though as tenants can trash homes etc."
"I encourage you to think of this home purchase decision as a chance to buy into a community that you want your children to grow up in. Try to find a place where you will be happy for the next 20 years, not just the next 2 or 7 years. In your situation, option 1 seems like a bad idea. It will create an obstacle to having children, instead of establishing a place for them to grow up in. Option 2 is close to ""buying a house on a layaway plan"". It offers the most financial flexibility. It also could result in the best long-term outcome, because you will buy in an established area, and you will know exactly what quality house you will have. But you and your fiancé need to ask yourselves some hard questions: Are you willing to put up with the mess and hassles of remodelling? Are you good at designing such projects? Can you afford to pay for the projects as they occur? Or if you need to finance them, can you get a HELOC to cover them? Especially if you and your fiancé do much of the work yourselves, break down the projects into small enough pieces that you can quickly finish off whatever you are working on at the time, and be happy living in the resulting space. You do not want to be nagging your husband about an unfinished project ""forever"" -- or silently resenting that a project never got wrapped up. I posted some suggestions for incrementally finishing a basement on the Home Improvement Stack Exchange. If you are up to the job of option 2, it is less risky than option 3. Option 3 has several risks: You don't know what sort of people will live in the neighborhood 5 - 20 years from now. Will the homes be owner-occupied? Or rentals? Will your neighbors care about raising children well? Or will lots of kids grow up in broken homes? Will the schools be good? Disappointing? Or dangerous? Whereas in an established neighborhood, you can see what the neighborhood is currently like, and how it has been changing. Unless you custom-build (or remodel), you don't control the quality of the construction.
"Verbal agreements are not legally binding. Unless you have signed a new lease agreement, you are not obligated to continue renting the property - you are free to go.  On the other hand, if you really like the place and want to stay, you should sign another lease agreement. This agreement will be binding on whomever owns the home - whether it is your current landlord, a bank or a new purchaser.  But, if you go this route, make sure that there is not a clause that says the lease agreement is void upon foreclosure (or something similar). This is a standard clause in lease agreements allowing the bank to cancel the lease. Another option, if you really like the house is to offer to buy the property. If the property is being foreclosed on, you could suggest buying on a short sale. Here is a link to an article I wrote entitled ""Buy Instead of Rent: A Recovering Real Estate Market"" that discusses the benefits of buying rather than renting."
Borrow the lot (as your family recommended)! The extra money will come in useful when you want to buy a house and move back to the area where your employer is. The government loan in the UK is a fantastic system, just a shame they are charging you so much in tuition fees...
If so, what should I do? Explain the situation to your parents, and, in particular, however far out of balance the rental rate may be. Decide for yourself if you want to rent vs. buy, and where (that property or some other). If your parents are fair people, they should be open to negotiation. If not, you might need a lawyer. I suspect that a lawyer would be able to find several issues with which to challenge the contract. The other terms are important as well, namely gross vs. net proceeds (as others point out) because selling a property costs a % to real estate agents and possibly some taxes as well. And as the others have pointed out, if the property ultimately looses value, that could be factored in as well. It is immaterial to judging the fairness of this particular situation whether getting a bank loan would be preferable to renting 75% from the parents. Further, loan interest rates don't factor into the fairness of this rental situation (but of course interest rates do factor into identifying the better of various methods of investment and methods of securing a place to live, e.g. rent vs. buy). Contributed by @Scott: If your parents view this as an investment arrangement as described, then you need to clarify with them if the payments being made to them are considered a ""buy out"" of their share. This would allow you to gain the equity you seek from the arrangement. @Scott: Terms would have to be (or have been) declared to that effect; this would involve specifying some schedule and/or rates. It would have to be negotiated; this it is not something that could go assumed or unstated. -- Erik"
"The flaw in your reasoning is that you are assuming that renting a house is easy and automatic. Who is going to manage the property? Your parents? What are you going to do if the tenants burn the place down, start having drug parties there, or secretly have 6 cats who piss everywhere so noone will ever want to rent it again? What are you going to do when the house goes unrented for a year and you have to pay a year's worth of mortgage payments with no rental income? What are you going to do when some deadbeat decides to stop paying the rent, but won't move out, and when you try to evict him, he goes to court to stop you? You going to fly to NJ to make the court appearances? Unless you sell your existing house, or your parents buy you out, then you need to stay. You should not attempt to own two houses at once with one of the houses located not where you are at. That will not turn out well. Also, just as an aside, 30-year mortgages are not an ""investment""; they are a way to lose money. Usually people get them because they want a big beautiful house that they cannot afford, so they borrow the money. That is not ""investing"", that is wasting money to live in luxurious circumstances. If you want to become wealthy, buy a property you can afford, not something that you have to string out payments for 30 years."
"Trying to determine what the best investment option is when buying a home is like predicting the stock market. Not likely to work out. Forget about the ""investment"" part of buying a home and look at the quality of life, monthly/annual financial burden, and what your goals are. Buy a home that you'll be happy living in and in an area you like. Buy a home with the plan being to remain in that home for at least 6 years. If you're planning on having kids, then buy a home that will accommodate that. If you're not planning on living in the same place at least 6 years, then buying might not be the best idea, and certainly might not be the best ""investment"". You're buying a home that will end up having emotional value to you. This isn't like buying a rental property or commercial real estate. Chances are you won't lose money in the long run, unless the market crashes again, but in that case everyone pretty much gets screwed so don't worry about it. We're not in a housing market like what existed in decades past. The idea of buying a home so that you'll make money off it when you sell it isn't really as reliable a practice as it once was. Take advantage of the ridiculously low interest rates, but note that if you wait, they're not likely to go up by an amount that will make a huge difference in the grand scheme of things. My family and I went through the exact same thought process you're going through right now. We close on our new house tomorrow. We battled over renting somewhere - we don't have a good rental market compared to buying here, buying something older for less money and fixing it up - we're HGTV junkies but we realized we just don't have the time or emotional capacity to deal with that scenario, or buying new/like new. There are benefits and drawbacks to all 3 options, and we spent a long time weighing them and eventually came to a conclusion that was best for us. Go talk to a realtor in your area. You're under no obligation to use them, but you can get a better feel for your options and what might best suit you by talking to a professional.
So you’ve decided to capitalize on your big, spacious house by renting it out. Before you go out in search of your first tenants, though, it’s important to get it prepared for leasing first. Think of yourself as a home seller trying to prep his home for an open house.
Both seem to be reasonable. To decide you need to guess if the value of the house will go up or down between now and when you sell. If you think the value will go up - reach a calculation agreement now. If you think the value will go down - wait until the house is actually sold. So ya pays yer money, and ya takes yer chances... I think I understand the two scenarios Unless you are absolutely confident that you understand both scenarios - make sure your lawyer gets involved and explains them to you until you do understand.
It's hard to financially justify buying a house just for one person to live in. You end up being 'over-housed' (and paying for it). Would you rent a whole house for yourself?  A condo might be an option - but TO ME the maintenance fees are hard to take (and they are notorious for increasing dramatically as the building ages). You could consider buying a house that includes 1 or 2 rental units, or sharing with a friend. You do run the risk of having bad tenants though, and you have additional maintance to deal with. Having a rental unit in my modest house has worked out very well for me (living alone), and I have been VERY fortunate with tenants.
Paying off your student loan before buying a house is certainly a great risk reduction move for you. It will lower your debt to income ratio allowing your mortgage approval to go easier and it will free up more of your dollars to pay for the many miscellaneous projects that come with buying a house. I think that if you are considering paying off your student loan before buying a house that means that your student loans are an amount you can fathom paying off and that you are motivated to be rid of your student loan debt.   Go for it and pay off your student loan.
Housing prices are inseparable from the job market of an area. The 40k you want to use as a down payment will buy an entire house outright in many places of the country that have no jobs. If your job is mobile why not follow cheap housing, even if it is just to rent?
Even selling isn't riskless. Sure, your house has gained value-- but unless that's due to improvements you made to it, every other house in the neighborhood you might buy has gained value too, so moving might not result in extracting any net value. This is one of the reasons I keep reminding folks that a house is not an investment. It can be a business, if you're renting it out. But if you're occupying it, it is simply housing. If you are lucky you'll make a profit if and when you sell it, but don't count on that.  It does store value, but except for taking loans against that it's had to access that value. And lower loan rates than you'd otherwise pay are not a huge value when you'd save more if you don't borrow at all. The only use I'm making of my house's value is that by taking a very-low-rate mortgage when I could have paid cash I was able to leave more money in my investments -- arguably the safest leveraged investment possible.
Buy a car. Unless you definitely know you are living in the area for a good long time, avoid buying a house and get a car instead.