Comments on: This Is The Reason We Rent An Apartment And Don’t Own A House. http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/ A place to discuss money...for the rest of us. Thu, 24 May 2012 01:22:07 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: The Friday Stack: You can save some money in this post | rocket financehttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-36031 The Friday Stack: You can save some money in this post | rocket finance Wed, 10 Mar 2010 00:37:39 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-36031 [...] Two Dollars explains why he rents. We own our house, but if we were able sell it for what we owe, we would become renters in a [...] [...] Two Dollars explains why he rents. We own our house, but if we were able sell it for what we owe, we would become renters in a [...]

]]> By: » New readers and today’s carnivals Early Retirement Extreme: The self-sufficient, environmentally friendly, frugal, and capitalistic fast track to financial independence and a simpler lifestyle.http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24202 » New readers and today’s carnivals Early Retirement Extreme: The self-sufficient, environmentally friendly, frugal, and capitalistic fast track to financial independence and a simpler lifestyle. Wed, 09 Jan 2008 02:15:36 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24202 [...] This Is The Reason We Rent An Apartment And Don't Own A House [...] [...] This Is The Reason We Rent An Apartment And Don’t Own A House [...]

]]> By: Festival of Frugality #107 | Cash Money Lifehttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24188 Festival of Frugality #107 | Cash Money Life Tue, 08 Jan 2008 12:15:09 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24188 [...] from My Two Dollars says that sometimes, the frugal option is to rent an apartment, rather than buy a home. If a two bedroom home in my neighborhood costs $1 million, I would have to [...] [...] from My Two Dollars says that sometimes, the frugal option is to rent an apartment, rather than buy a home. If a two bedroom home in my neighborhood costs $1 million, I would have to [...]

]]> By: Peter Bielagushttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24057 Peter Bielagus Mon, 24 Dec 2007 15:55:15 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24057 Great post! When you rent you aren't necessarily throwing away money but most people treat it like that. When you pay your mortgage you are saving SOMETHING, even if in the first few years of the loan it is a small amount. The longer you own the house a higher % of your payments go into the "investment" of your house as opposed to down the drain (towards interest.) Most Americans would be close to the poverty line without their home equity. Renters however need not worry as long as they invest a large % of what they save by renting. Let's pretend your rent is $2000 a month and if you were to buy in your area your mortgage would be $3000 a month. As a renter you are actually "saving" $1000 a month by renting. That's some serious money. When you pay a $3000 mortgage payment, maybe only $200 of that actually goes to equity in the first few years. So in this example the renter is WAY ahead of the buyer. But...what do most renter's do? They take that $1000 in savings and blow it on plasma TVs, dinners out or an SUV. Since renter's aren't "forced" to save; they often don't. So I do applaud a committed renter if and only if they are a committed saver. Two more things to say on this (and sorry for the long post) 5 seems to be the magic number in real estate. So I wouldn't worry about buying anything unless I was pretty certain I would live there for at least 5 years. FYI. Another mistake renters make is not getting renter's insurance. Where I live, my homeowners insurance policy is about $55 a month. But when I used to rent (in a higher crime neighborhood) my renter's policy was only $15 a month. (Another way renting can save you money.) BUT DO GET A POLICY. Every Xmas I recall the story of my friend who had his wrapped Xmas gifts stolen right out of his car. (how does that theif sleep at night?) Anyway since he didn't have renters insurance he ate the entire cost of all those gifts. Contrary to popular belief, renters insurance covers your stuff even if it is outside your home. And even if it is inside your apartment, it is NOT covered by your landlord. A pretty cool website to learn about renter's insurance is www.youcovered.com because you can get a quote without putting in any of your own personal information. Always nice. I hope this helps. This is an important issue, the buying vs renting thing and I think much of the current housing crisis was caused by too many renter's thinking they were "losing" money. They can actually come out ahead if they are disciplined about it. Happy Holidays! Great post! When you rent you aren’t necessarily throwing away money but most people treat it like that. When you pay your mortgage you are saving SOMETHING, even if in the first few years of the loan it is a small amount. The longer you own the house a higher % of your payments go into the “investment” of your house as opposed to down the drain (towards interest.) Most Americans would be close to the poverty line without their home equity.

Renters however need not worry as long as they invest a large % of what they save by renting. Let’s pretend your rent is $2000 a month and if you were to buy in your area your mortgage would be $3000 a month. As a renter you are actually “saving” $1000 a month by renting. That’s some serious money. When you pay a $3000 mortgage payment, maybe only $200 of that actually goes to equity in the first few years. So in this example the renter is WAY ahead of the buyer. But…what do most renter’s do? They take that $1000 in savings and blow it on plasma TVs, dinners out or an SUV. Since renter’s aren’t “forced” to save; they often don’t. So I do applaud a committed renter if and only if they are a committed saver.

Two more things to say on this (and sorry for the long post) 5 seems to be the magic number in real estate. So I wouldn’t worry about buying anything unless I was pretty certain I would live there for at least 5 years. FYI.

Another mistake renters make is not getting renter’s insurance. Where I live, my homeowners insurance policy is about $55 a month. But when I used to rent (in a higher crime neighborhood) my renter’s policy was only $15 a month. (Another way renting can save you money.)

BUT DO GET A POLICY. Every Xmas I recall the story of my friend who had his wrapped Xmas gifts stolen right out of his car. (how does that theif sleep at night?) Anyway since he didn’t have renters insurance he ate the entire cost of all those gifts. Contrary to popular belief, renters insurance covers your stuff even if it is outside your home. And even if it is inside your apartment, it is NOT covered by your landlord. A pretty cool website to learn about renter’s insurance is http://www.youcovered.com because you can get a quote without putting in any of your own personal information. Always nice.

I hope this helps. This is an important issue, the buying vs renting thing and I think much of the current housing crisis was caused by too many renter’s thinking they were “losing” money. They can actually come out ahead if they are disciplined about it. Happy Holidays!

]]> By: The Friday Gathering for 12/21/2007 | Gather Little By Littlehttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24037 The Friday Gathering for 12/21/2007 | Gather Little By Little Fri, 21 Dec 2007 18:32:33 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-24037 [...] My Two Dollars - This Is The Reason We Rent An Apartment And Don't Own A House. [...] [...] My Two Dollars – This Is The Reason We Rent An Apartment And Don’t Own A House. [...]

]]> By: DebtDieterhttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23986 DebtDieter Wed, 19 Dec 2007 09:43:13 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23986 Exactly Modern Worker, don't get me wrong I'd like to have a place of my own one day, but when I can afford it! Exactly Modern Worker, don’t get me wrong I’d like to have a place of my own one day, but when I can afford it!

]]> By: davidhttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23980 david Tue, 18 Dec 2007 23:34:38 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23980 We do get paid more out here than most other places, so it makes up for some of the difference. A crappy apartment in a not so nice neighborhood will still run over $1000 We do get paid more out here than most other places, so it makes up for some of the difference. A crappy apartment in a not so nice neighborhood will still run over $1000

]]> By: SingleGuyMoneyhttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23979 SingleGuyMoney Tue, 18 Dec 2007 23:27:02 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23979 Housing prices in some parts of the country are just crazy. Even your rent is wayyy more than I would be willing to pay for housing each month. I'm glad I live where I live (Atlanta) and if I want to go to the beach, I'll just visit. Housing prices in some parts of the country are just crazy. Even your rent is wayyy more than I would be willing to pay for housing each month. I’m glad I live where I live (Atlanta) and if I want to go to the beach, I’ll just visit.

]]> By: Modern Workerhttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23978 Modern Worker Tue, 18 Dec 2007 22:15:51 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23978 "I've never understood the "˜renting is throwing away money' argument; you have to live somewhere don't you?" DebtDieter, I completely agree. If my a/c unit explodes or anything similar, it's on my property management to fix or replace. As a renter, I get to focus on savings/investments more and less on house property maintenance =) “I’ve never understood the “˜renting is throwing away money’ argument; you have to live somewhere don’t you?”

DebtDieter, I completely agree. If my a/c unit explodes or anything similar, it’s on my property management to fix or replace. As a renter, I get to focus on savings/investments more and less on house property maintenance =)

]]> By: plonkeehttp://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23976 plonkee Tue, 18 Dec 2007 20:40:09 +0000 http://www.mytwodollars.com/2007/12/18/this-is-the-reason-we-rent-an-apartment-and-dont-own-a-house/#comment-23976 I think the expression that covers people buying in South California is *more money than sense*. If they can't afford it, they have very little sense indeed. I think the expression that covers people buying in South California is *more money than sense*. If they can’t afford it, they have very little sense indeed.

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