Author Topic: When Rent vs. Buy favors Buying  (Read 1690 times)

wtrfre

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When Rent vs. Buy favors Buying
« on: April 30, 2016, 06:20:25 AM »
I currently rent. I live in an area where the rent/buy calculation comes out in favor of buying.  Barring a severe catastrophe, (which I can't picture), I will be staying here for at least the next 10+ years for family reasons.  The catch, and the reason I am currently a renter, is having a down payment.  If I stopped most investing I could gather down payment funds in two to three years.  Would it make sense to do this?
I would continue obvious beneficial investing such as 401k for match.

Drifterrider

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Re: When Rent vs. Buy favors Buying
« Reply #1 on: May 02, 2016, 05:41:22 AM »
How much of a down payment do you think you need (you didn't post your location).  Do you qualify for VA loan, FHA, etc?

I bought my first house (in 1993) because my mortgage was $300 and rent on a similar house was $500. 

lizzzi

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Re: When Rent vs. Buy favors Buying
« Reply #2 on: May 02, 2016, 05:44:40 AM »
It's also a lifestyle choice. This has been discussed a lot on other threads, as I recall. Which lifestyle do you prefer: Owner or renter?

nereo

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Re: When Rent vs. Buy favors Buying
« Reply #3 on: May 02, 2016, 06:09:05 AM »
I'm concerned that the only way you think you can come up with a down payment is to stop contributing to savings, including your 401(k).
Sure, rent vs buy equation may favor buying here, but what happens if you buy a place and you need a new roof? 
If coming up with a down payment requires eliminating your retirement contributions it sounds like you don't have a lot of cash-flow to handle a several thousand$ home repair.

Maybe you are in an area where a down payment is $100k+ - but if you bought the house could you afford a $10k-20k repair in the first year?

clarkfan1979

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Re: When Rent vs. Buy favors Buying
« Reply #4 on: May 11, 2016, 09:28:04 PM »
Given your situation, I would only buy if you can rent out one bedroom to a co-worker or a friend. Apply their rent contributions to savings and/or investing.