buying vs. renting revisited

Jonny_B

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Oct 14, 2004
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Interesting reading for those who were involved in the "buying vs. renting" debate we had a while back.

http://www.nytimes.com/2007/04/11/realestate/11leonhardt.html?_r=1&oref=slogin

Homeownership [...] is a way to achieve the American dream, save on taxes and earn a solid investment return all at the same time.

That’s how it has worked out for much of the last 15 years. But in a stark reversal, it’s now clear that people who chose renting over buying in the last two years made the right move. In much of the country, including large parts of the Northeast, California, Florida and the Southwest, recent home buyers have faced higher monthly costs than renters and have lost money on their investment in the meantime. It’s almost as if they have thrown money away, an insult once reserved for renters.
 
I've been renting for the past 20 months and I'm psyched the market is bottoming out...time to buy!
 
i recently bought and i hope it was a good decision. i have the same size place as when i rented and with taxes and everything included i pay a little less then when i rented. it is also a condo so i hope to keep it and rent it out once i am tired of it.
 
houses around me keep selling for more than 15k more than i paid for my place. Time to fix it up and get re-appraised.
 
I know Cleveland is a dead market. You will not make much (if any) money buying instead of renting. Prices for a lot of homes haven't budged in almost a decade. People are finding they aren't even getting back what they put into it; like a new $10K roof only adds $5K to the appraisal.

That being said, I am taking "delivery" of my condo at the end of the month.
 
why not go for it...fix it and flip it? it seems you'd be good at that!
Flipping has never been a good strategy here. This is old economy type place, the population is pretty constant. Fixing and renting is an option if one wanted to, it would involve incorporating though because of liability issues.

I take offense at most of the 'flipping' type things anyway. The house I live in was an attempt at that, though we bought it way under value. It is purely cosmetic and duplicitous. Painting does not fix crooked walls and sagging floors. Unless you buy something that is FAR undervalued you are only going to get out of it what you put in.
 
Flipping has never been a good strategy here. This is old economy type place, the population is pretty constant. Fixing and renting is an option if one wanted to, it would involve incorporating though because of liability issues.

I take offense at most of the 'flipping' type things anyway. The house I live in was an attempt at that, though we bought it way under value. It is purely cosmetic and duplicitous. Painting does not fix crooked walls and sagging floors. Unless you buy something that is FAR undervalued you are only going to get out of it what you put in.

depends on the market...Atlanta has been showing something stupid like a 20% ROI in like 3-5 years for the past 10 years or so...the market was way undervalued across the board to begin with though for this size city
 
depends on the market...Atlanta has been showing something stupid like a 20% ROI in like 3-5 years for the past 10 years or so...the market was way undervalued across the board to begin with though for this size city
Aye, you are from NY though. Do you think that there is an undervalued market here? Esp upstate. Short of a major employer moving into Syracuse we have Lockheed Martin, and Syracuse University. Both of which have been here a long time.

The south has been booming for awhile. I remember all 1998-2003 my parents were getting constant job offers in Atl and NC, SC. If I'd pick a place to go and flip houses it would be Charlotte, NC or like Richmond, VA. Ontario is also starting into an upswing... ^.^
 
i'd still rather buy.

All northern markets are stagnant... everyone wants to move to warmer climates. Alot of southern markets simply inflated to fast and got to high, that bubble had to burst eventually.

Add in interest rates going up and people who have over extended themselves already and you're looking at huge numbers of foreclosures, and normally banks buy up all cheap houses and sit on them until the market settles down to protect their own interest (ie: the people they've loaned money too), and to make a bit of profit in the future.
 
i'd still rather buy.

All northern markets are stagnant... everyone wants to move to warmer climates. Alot of southern markets simply inflated to fast and got to high, that bubble had to burst eventually.

Add in interest rates going up and people who have over extended themselves already and you're looking at huge numbers of foreclosures, and normally banks buy up all cheap houses and sit on them until the market settles down to protect their own interest (ie: the people they've loaned money too), and to make a bit of profit in the future.
i don't think banks actually do that. firstly they don't like investing money in anything that isn't a good bet. holding houses in a down market provides no return. only holding houses in a rising market provides a return. plus, who cuts the grass? the tellers?
 
i don't think banks actually do that. firstly they don't like investing money in anything that isn't a good bet. holding houses in a down market provides no return. only holding houses in a rising market provides a return. plus, who cuts the grass? the tellers?

If you've ever gone to an auction at the court house to watch the repo'd houses sold to cover back taxes etc... most of them goto banks. they buy alot of houses and sit on them for awhile before they turn around and sell them.

They also foreclose on houses often, keep them, send in a clean up crew, then turn around and resale the house. It's not uncommon practice at all... so I'm sure they have a seperate company that fixes up houses/maintains them while they're sitting.

It's a high profitable business. In high end neighborhoods, alot of the houses have been foreclosed on multiple times... and often they have to have new carpet and whatever put in before it can be resold... the tellers definatly arn't doing that.

Banks don't buy up normal houses on the market, they go for foreclosures (which they're normally foreclosing on their own loan out to someone), or for back tax auction type houses which they essentially flip and sell, or flip and sit on for awhile. Or, alot of times they sit on it then sell it for someone else to flip.
 
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