Rent or Rent to Own?
Creeperbane2
Victorian ScoundrelIndianapolis, IN Icrontian
So, Readers digest version of the situation, I need to move the hell out of my parents place before I loose my mind, and am now in a place financially where I can do so soon. My question is this, around here apartments are going from $520-$600/month However there is also a nice house up, rent to own, $200 down $549/month (thank you shitty housing market) but that obviously could be of risk for someone just starting out. Which one do you guys think is a better option?
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Your first place? Rent.
Rent.
100% definitely do not buy or rent to buy anything as a first home purchase. Rent.
Rent, look for a local roommate to share cost.
Rent forever and always. also that is some hella cheap rent.
rent man......
Rent, and when you can afford to buy, rent.
Something Awful has an excellent piece on the rent-to-own industry: http://www.somethingawful.com/comedy-goldmine/stories-from-renttoown/1/
IMHO, RTO is risky at best. The contracts are generally shady and usually don't favor the lessor/buyer. As has been stated by others so far, I would rent since you haven't been in the housing market so far. First I think you need to get out on your own for a while to establish what you want, need, find out where you are heading in life and build credit. Then you can figure out where and what you want to live in. Just my $0.02.
Rent. Absolutely rent. Don't be me, ending up with a crappy house that you can't get rid of.
First place, rent. Until it's time to buy, save up for a large down payment and build your credit. Both will take years. Have roommates now, and make sure they're on the rental contract too. Also make sure you know your rights and responsibilities as a renter.
When you're ready to buy, don't be in a rush. Don't be afraid to walk away because of price or conditions. Don't buy a house that costs enough that you have to have roommates.
What @mertesn said. There's a lot of people here who have had bad experiences owning, but there are good experiences too when the time is right. Don't ever do land contract or rent to own (although sometimes it works out).
I rented for about 4 or 5 years until I bought a condo (too scared of the responsibility of a house on my own). I honestly should have had a bigger down payment, but I bought when interest rates were at an all time low and I got a first time home buyers grant. I was able to own something nicer I was paying the same amount in rent for. And the market here went crazy and I ended up making money after owning it for only 3 years (made enough that I actually was able to pay off my student loans and have money left over!).
Rent and save money. Be frugal. Ideally you'll want to save enough money when you're ready to buy for a 20% down payment so you don't have to pay PMI on your mortgage. And still have a nice financial buffer for house repairs. There WILL always be house repairs when owning a home.
The only reason we didn't rent was because we could get a mortgage + assumed maintenance on a house that was cheaper than renting. About the only time I can imagine its a good idea.
If it's your first place, rent.
If it's not your first place and you think you'll be there forever, then buy. If you don't think you'll be there for long, rent. Transaction costs on selling are high, and holding costs of an unsold property are even worse.
Same here. Once our apartments got bought by a different company and they wanted to turn them into more luxury apartments. We go notice that they wanted to increase our rent from $1200/month to $1500/month on our next year's contract, so we started looking around. We found a great house that ended up with mortgage payments of $900. We have incidental expenses that come with owning a home, but definitely less than the $600/month we ended up saving on our rent. Apparently, it's worked out well for us as well because the value of our house has increased by about $70k over what we paid for it in the three years we've been here based on similar houses that have sold on our street in the past few months.