Why rent? To get richer

[Da_Sperm]

BINGO....

I look at it like this...I'm single! until I get marry....there no use for me having a house.

I can leased a nice loft downtown and invest the money I pay in taxes,insurances and hoa into a nice mutal fund.


or

I can be black an buy me a 750il BMW :Lmao:

Delock,
The thing is you are paying property taxes when you pay rent. It is incorporated in the price of your rent along with maintenance expense, insurance, property management, vacancy rate and PROFIT. If you were to BUY a property, then you would eliminate 1) vacancy rate 2) PROFIT 3) Management Fees to the landlord and use that money to put into a mutual fund.

 

[delock]

Delock,
The thing is you are paying property taxes when you pay rent. It is incorporated in the price of your rent along with maintenance expense, insurance, property management, vacancy rate and PROFIT. If you were to BUY a property, then you would eliminate 1) vacancy rate 2) PROFIT 3) Management Fees to the landlord and use that money to put into a mutual fund.

Frat...we are talking about a loft not a home.

Rent= no lawn care, if something break no midnight runs to Home Depot...

But, I feel you on where you coming from. But for what lofts are going for down here and the location....I save all the way around.

 

[Olde Hornet]

For a lot of people, they would never save and invest money like they would if they buy a house. Many people are just not that disciplined, that what the article is missing. The monthly mortgage forces the acquisition of an asset, where as putting money aside on a monthly basis, then investing it in something, many people would never do that. The article is good in theory, but sad in the reality of many people.

 

[Da_Sperm]

Frat...we are talking about a loft not a home.

Rent= no lawn care, if something break no midnight runs to Home Depot...

But, I feel you on where you coming from. But for what lofts are going for down here and the location....I save all the way around.

Bruh, what I am saying is even in your LOFT that you are leasing, your monthly rent covers the cost if something breaks. You just don't go to Home Depot and pay for it directly, but you do pay for it. Don't think that your Landlord is paying for it out of his pocket. It is paid for out of your RENT money.

My rent house that I had before we sold it was this.
P&I: $323/month
Taxes& Insurance: $400/month.

I collected $1200/month rent. I collected $2400 upfront from my renter and I didn't pay for any maintenance until the renter paid the first $75 per incident. That $400+ monthly profit covered the expenses and profit I wanted out of that unit (4BR house).

Hotels, apartments, lofts, rental houses, commercial leases all work the same way. You can NEVER rent a unit cheaper than you can buy it.

 

[msp1911]

For a lot of people, they would never save and invest money like they would if they buy a house. Many people are just not that disciplined, that what the article is missing. The monthly mortgage forces the acquisition of an asset, where as putting money aside on a monthly basis, then investing it in something, many people would never do that. The article is good in theory, but sad in the reality of many people.

So true. For most Americans, their home is their biggest asset. We should be trying to get as large a house as possible since this is the case.

 

[msp1911]

Bruh, what I am saying is even in your LOFT that you are leasing, your monthly rent covers the cost if something breaks. You just don't go to Home Depot and pay for it directly, but you do pay for it. Don't think that your Landlord is paying for it out of his pocket. It is paid for out of your RENT money.

My rent house that I had before we sold it was this.
P&I: $323/month
Taxes& Insurance: $400/month.

I collected $1200/month rent. I collected $2400 upfront from my renter and I didn't pay for any maintenance until the renter paid the first $75 per incident. That $400+ monthly profit covered the expenses and profit I wanted out of that unit (4BR house).

Hotels, apartments, lofts, rental houses, commercial leases all work the same way. You can NEVER rent a unit cheaper than you can buy it.

Delock, listen to your boy. He's telling the absolute truth.

 

[jag4life]

Hotels, apartments, lofts, rental houses, commercial leases all work the same way. You can NEVER rent a unit cheaper than you can buy it.

That's not the point... it is usually cheaper to rent an apartment than it is to BUY a house, etc.

 

[Da_Sperm]

That's not the point... it is usually cheaper to rent an apartment than it is to BUY a house, etc.

HUH? That is IMPOSSIBLE! Surely, you can't believe that.

Lets say you rent a one bedroom house for $500/month. Over the course of the year, your rent totals $6000. After 5 years, you have spent $30,000 in RENT.

Lets say you buy a $100,000 house and your house note plus taxes and insurance is $1000.00 per month. Over the course of a year, you pay $12,000 in mortgage (P&I, Taxes, Ins). After 5 years, you have spent $60,000.

With a mortgage, you get to write off the interest and taxes every year ($8000). That is probably worth $4000 in tax deductions. After 5 years, you have $20,000 in tax deductions.
With a mortgage, you house appreciates. Lets say it appreciates at a rate of 3% each year. After 5 years, the house is worth $115,000.
With a mortgage, each time you pay the note, you chew away at the principle. After 5 years, your mortgage could be down to $94,000 ($100/month principle buy down).

So, with a house you spent $60,000, but with deductions, appreciation, and principle buydown, you are only out of $34,000 ($20K in deductions and $6K in principle buydown). Now, you have equity of $22K (house value $115K - remaining mortgage $94K).

In five years, the home owner sales the $100K house and it has only cost him a total of $12K to live in the house over 5 years. It cost the apartment owner $30K to live in a one bedroom.

Please! I hate you think like that, but it is because of your thinking that Landlords are in business.

 

[Tony]

Uh, yep j4l

He is correct, Myself and any landlord you find, do not pay
Property tax and insurance on our rental property, that is factored into
The rent cost. Therefore you are paying property tax & insurance,
Just for someone else. AND if the property is paid for, meaning the landlord
Doesn?t have a mortgage on it Guess what!!?? You are now helping pay
The landlords? mortgage on the crib where he lives.

In the long run you always come out ahead buying. Many times it?s is even
Easier to sell your house, than it is to break some rental leases


At the end of whatever period, if you rent, all you have are a bunch of rent
Receipts. One of my med school class mates refused to get an apartment.
Instead he bought a trailer, ( 200 month for trailor + 100 trailor park fee = 300 month) 300x 48 months = 14400. at the end he sold the trailor for 9000.

14400- 9000 = 5400

So He spent 5400 for 48 months came out to be only 112.50a month for rent +
He walked away with a check for 9000 just for doing something he needed to do anyway.

Owning is always better.

 

[jag4life]

HUH? That is IMPOSSIBLE! Surely, you can't believe that.

Lets say you rent a one bedroom house for $500/month. Over the course of the year, your rent totals $6000. After 5 years, you have spent $30,000 in RENT.

Lets say you buy a $100,000 house and your house note plus taxes and insurance is $1000.00 per month. Over the course of a year, you pay $12,000 in mortgage (P&I, Taxes, Ins). After 5 years, you have spent $60,000.

With a mortgage, you get to write off the interest and taxes every year ($8000). That is probably worth $4000 in tax deductions. After 5 years, you have $20,000 in tax deductions.
With a mortgage, you house appreciates. Lets say it appreciates at a rate of 3% each year. After 5 years, the house is worth $115,000.
With a mortgage, each time you pay the note, you chew away at the principle. After 5 years, your mortgage could be down to $94,000 ($100/month principle buy down).

So, with a house you spent $60,000, but with deductions, appreciation, and principle buydown, you are only out of $34,000 ($20K in deductions and $6K in principle buydown). Now, you have equity of $22K (house value $115K - remaining mortgage $94K).

In five years, the home owner sales the $100K house and it has only cost him a total of $12K to live in the house over 5 years. It cost the apartment owner $30K to live in a one bedroom.

Please! I hate you think like that, but it is because of your thinking that Landlords are in business.

OK dude... i know all the tax and equity benefits of the house. And your calculations on deductions is not that accurate because you deduct the $20K from your income but it is not dollar for dollar. A tax deduction is not dollar for dollar so I am not only out "$34,000"...I am still out most of the $60K I paid and I don't realize the earnings in equity unless I sell the house.

 

[Da_Sperm]

In fact Tony, I have 3 kids (14 year old and twins that are 9 years old). I'm thinking that it will be BEST that I buy a small house when they go off the college (UAPB), instead of them living in the dorms.

The 14 year old would graduate college in 2015 or 2016 and the twins would graduate in 2020 or 2021. I would be paying dorm expenses or off campus expenses for 10 years. It is better for me to buy a small house for 10 years, then SELL IT.

 

[Tony]

In fact Tony, I have 3 kids (14 year old and twins that are 9 years old). I'm thinking that it will be BEST that I buy a small house when they go off the college (UAPB), instead of them living in the dorms.

The 14 year old would graduate college in 2015 or 2016 and the twins would graduate in 2020 or 2021. I would be paying dorm expenses or off campus expenses for 10 years. It is better for me to buy a small house for 10 years, then SELL IT.

Exactly, and if you send them to JSU I got the perfect house for them..lol..

The only obstacle to buying use to be credit. I say use to because they?re
So many programs now, just dying to work with people to get them in a house.

One could argue that ?I can get an apartment in a good area, but I can?t afford a house in a decent area?

Wrong!! An apartment in good area will cost what 6,7,8, 1000 dollars a month.

That?s the mortgage in a good area also.

Rent = nothing at the end. You can rent if you?re old and death is near anyway.

But with tax benefits, profits upon selling, equity if you need some quick cash.
Possibility of renting it yourself and generate passive income,
Pride in ownership etc. etc. you can?t beat it.
And now even your credit doesn?t have to be perfect to buy.

 

[delock]

In fact Tony, I have 3 kids (14 year old and twins that are 9 years old). I'm thinking that it will be BEST that I buy a small house when they go off the college (UAPB), instead of them living in the dorms.

The 14 year old would graduate college in 2015 or 2016 and the twins would graduate in 2020 or 2021. I would be paying dorm expenses or off campus expenses for 10 years. It is better for me to buy a small house for 10 years, then SELL IT.

Utilities and food?

 

[Tony]

Utilities and food?

you'll still have that even if you rent.

Food = Board and don't think the university JUST LIKE THE LANDLORD
hasn't added the cost of utilities to your dorm fees.

 

[ROYAL BLUE]

Every homeowner should have AHS. "You simply pay a low annual contract price and a $55 trade service call fee due each time service is rendered.*" AHS offers plans on an annual basis. Plans vary by location. I've used it and its very inexpensive compared to paying for it yourself. I pay $27 a month for the contract and $35 when service is rendered. I got a discount through another insurance company I use.....USAA. http://www.ahswarranty.com/homeowners/homewarranty-benefits/plans-costs.jsp

 

[ROYAL BLUE]

So true. For most Americans, their home is their biggest asset. We should be trying to get as large a house as possible since this is the case.

Every first time homebuyer should buy or build within their means and get a 5, 10 , or 15 year mortgage. If I had to do it all over again I'd ask for a 5 year mortgage. I'm kickin myself in the azz for not doing it because it wouldn't have been a strain and I'd own it by now. I don't have the discipline to double my payments.:lol:

 

[msp1911]

Every first time homebuyer should buy or build within their means and get a 5, 10 , or 15 year mortgage. If I had to do it all over again I'd ask for a 5 year mortgage. I'm kickin myself in the azz for not doing it because it wouldn't have been a strain and I'd own it by now. I don't have the discipline to double my payments.:lol:

So true. Many people are not aware that a mortgage can be of any length. Buying within your means goes without saying. I also rented for a long period of time. I could have owned a property with all of the money I spent on rent. Even if it wasn't an ideal property, I could have kept the equity and moved into more suitable surroundings as my situation improved.

We live and we learn.

 

[jag4life]

Every first time homebuyer should buy or build within their means and get a 5, 10 , or 15 year mortgage. If I had to do it all over again I'd ask for a 5 year mortgage. I'm kickin myself in the azz for not doing it because it wouldn't have been a strain and I'd own it by now. I don't have the discipline to double my payments.:lol:

5 year mortgage means you have to have high cash flow coming in or low principle... it would be a much better way to go, though.

 

[Da_Sperm]

5 year mortgage means you have to have high cash flow coming in or low principle... it would be a much better way to go, though.

5 year mortgage? HUH? You mean payoff the mortgage in 5 years on your 1st house. You are talking about SKY HIGH PAYMENTS.

I would recommend that 1st time home buyers get a 5/1 (Fixed 1st 5 years, then adjust every year after) ADJUSTABLE RATE mortgage because studies show that most people SELL/MOVE out of their 1st home within 7 years.

The 15 year Fixed is the best product for buying a house in my opinion. It increases your P&I payments by 25%, yet you own the house twice as fast.

 

[jag4life]

5 year mortgage? HUH? You mean payoff the mortgage in 5 years on your 1st house. You are talking about SKY HIGH PAYMENTS.

Yeah I know... HIGH HIGH cash flow has to be coming in to pay that. Or the house has to be one of those country 60K houses you get in Bucktussle, MS.

 

[delock]

I guess we still have not factor the other cost that comes with owning vs renting....

 

[CEE DOG]

Every man has a different plan. What works for one, doesn't mean it will work for the other. Good info from you fellas though. I love it. Shows our HBCU's have produced some quality learners!!!!!!

 

[Da_Sperm]

Yeah I know... HIGH HIGH cash flow has to be coming in to pay that. Or the house has to be one of those country 60K houses you get in Bucktussle, MS.

Got to get my mind out of Texas. $60K only gets you some land (not even a 1/2 acre lot) in these parts of Texas.

You are right, what works for one man may not work for another. If you are young and single, homeownership seems less attractive.

All I know is I put $2K down (My own money, $8K of someone else) on a property that now has close to $100K in equity 3 years later. I sell that house now and my return on investment is 5,000%. We bought our first house in 1998 with $1000K down, sold it and made a $30K profit after 7 years. That was a return on investment of 3000%.

Any other investment ideas out there we can share?

 

[Tony]

I think single people are looking with an emotional eye,
Rather than an economical eye. For some reason some people
Have tied home ownership with having a family, and yard work.

Not true, part of your rent goes towards ground maintenance same as if you paid
Someone to cut your grass. You can always sell your house
And buy another with that dream person, taking the equity, and tax benefits with you.

I bought a duplex in the hood, in the tax auction for $900 back taxes.
Been renting it out for 4 years @ $500/month, paid for itself in two months

Sure I spent another 2,000 fixing it up, & it cost about $1,500 a year
in property taxes & insurance, but it just appraised for 40,000

You tell me.

 

[delock]

Got to get my mind out of Texas. $60K only gets you some land (not even a 1/2 acre lot) in these parts of Texas.

You are right, what works for one man may not work for another. If you are young and single, homeownership seems less attractive.

All I know is I put $2K down (My own money, $8K of someone else) on a property that now has close to $100K in equity 3 years later. I sell that house now and my return on investment is 5,000%. We bought our first house in 1998 with $1000K down, sold it and made a $30K profit after 7 years. That was a return on investment of 3000%.

Any other investment ideas out there we can share?

Is this in Texas or back home where you flipped the two houses?