Cheaper to rent than buy a house?

[reds4ever]

It is the case in the UK, my costs come to something like £500 a month, £350 mortgage the rest in bills (gas, lecy, water, rates, insurance etc)

It'd cost me at least £450 to rent a similar place.

[Dauphin]

This isn't the case in most places. Not in the old world, at least, from what I know.

Wouldn't that depend mainly on the size of the mortgage you are taking as a percentage of the cost of the home.

A percentage that decreases in a rising market.

[reds4ever]

Originally posted by Dauphin
Wouldn't that depend mainly on the size of the mortgage you are taking as a percentage of the cost of the home.

Mine was 95%, so it's pretty much 'like for like'

Ah, you snuck that last line in after I posted, I see what your saying now though.

[Kidlicious]

Originally posted by Oerdin
Kid, when ever property prices go up there is a lag time between when those valuations occur and when they are reflected in the rental prices. Trust me they are coming. They always do.

I don't think so. I agree with the Economist that prices will fall before rent goes up much.

[Kidlicious]

In some markets the growth rate in real prices has been enough to justifying buying if you count capital gains that haven't been realized, but I think the Economist is going with the assumption that prices will eventually normalize. Places like California it's kind of tough to judge because prices have gone up so much in the past, but I do think that that will change.

[chequita guevara]

Even if housing prices fall, you're still better off in the long run buying than renting. Suppose you only get ten cents on the dollar back from your house? That's still more than you'd get renting?

[Ming]

Hey Flubber... I just had a "senior moment"... instead of hitting the quote button to respond to your post, I hit the edit button... and pretty much destroyed your post.

So I just deleted what was left of it.

Sorry about that...

[Az]

/me points and laughs at Ming.



don't be sad, we'll all come to that age at some point.

[Ming]

Originally posted by Azazel
* Azazel points and laughs at Ming.



don't be sad, we'll all come to that age at some point.

Advancing age sure beats the alternative

[Az]

Point!

[Dauphin]

Originally posted by chegitz guevara
Even if housing prices fall, you're still better off in the long run buying than renting. Suppose you only get ten cents on the dollar back from your house? That's still more than you'd get renting?

Mainly true, but *some* people do fall into negative equity.

[Whoha]

Re: Cheaper to rent than buy a house?

Originally posted by Kidicious
According to this article at the Economist it's now cheaper to rent a house than it is to buy one in many countries including the US. It seems to me that that is clear evidence of bubbles. People are buying houses only for speculation of capital gains. When prices stop increasing there could be trouble.

After Fannie Mae goes down in flames and sorrow this will not be the case.

[:) Smiley]

I don't think it's bubbles though, rather "inverse bubbles" where development, especially residential development, has been held down for decades by anti-development neighborhood organizations. Now, the shortage of housing has gotten so bad that all it took to tip the scales was a weak stock market.
As long as population growth exceeds the growth of housing units, prices will keep rising. In California, the state grew about 17% in the last ten years, but only increased housing supply by 10%.

[Dinner]

The fundimentals of the realestate business is sound in this state. Population growth keeps exceeding the growth in housing supply plus the economy keeps growing. That's a recipe for price increases.

[Ben Kenobi]

Rent money is indeed lost money... and is somebody else's profit.

Depends.

1 heater replaced.

1 new tile floor.

Renting and not owning, Priceless!