When people talk about throwing money away renting...

casper_g

tamarto wrote: »

Obviously but if you do what you are supposed to and pay the money you chose to borrow and the end you are left with a house/flat/pile of bricks which is still something. Hense why i said once the mortgage is paid.

I personally don't think renting is throwing money away but i do 'get' where the saying comes from.

I can see why people feel this way about renting, emotionally-speaking. In the worst-case scenario, though, buying a house could be much worse than renting. Let's say you buy with little equity, house prices fall so you owe more than the house is worth, then interest rates rise significantly so your payments go up and up until eventually you can no longer afford to pay them and the house is repossessed. You may in some cases have paid out a lot more each month than you would have paid in rent (and you've been responsible for maintenance too). You have no asset at the end of the day, and you have the bank still pursuing you for the shortfall on the mortgage.

At least if you rent you can always just stop renting at short notice (usually not more than 6 months) if things go wrong!

ETA: As the two previous posters point out, buying makes a great deal of sense in the long term. I certainly don't plan to rent when I'm retired!

Incyder

We arrived on planet Earth with nothing and we will leave......with nothing.
Owning anything is just a fleeting illusion in our own mind, soon to be snuffed out by old father time and mother nature, as they return us all to the soil.

goldbyron

casper_g wrote: »

I can see why people feel this way about renting, emotionally-speaking. In the worst-case scenario, though, buying a house could be much worse than renting. Let's say you buy with little equity, house prices fall so you owe more than the house is worth, then interest rates rise significantly so your payments go up and up until eventually you can no longer afford to pay them and the house is repossessed. You may in some cases have paid out a lot more each month than you would have paid in rent (and you've been responsible for maintenance too). You have no asset at the end of the day, and you have the bank still pursuing you for the shortfall on the mortgage.

At least if you rent you can always just stop renting at short notice (usually not more than 6 months) if things go wrong!

Admittedly this can been seen differently from different perspectives. However as the scenario above - what if you don't have any money for rent - you end up homeless unless of course the council agree to cough up the rent. As a buyer you could rent out a room in your home and you get the interest paid for a period of time by the government.

goldbyron

Incyder wrote: »

We arrived on planet Earth with nothing and we will leave......with nothing.
Owning anything is just a fleeting illusion in our own mind, soon to be snuffed out by old father time and mother nature, as they return us all to the soil.



I don't want to sound pedantic but some people have children that they leave their belongings to and so they leave a legacy and security for their future generations.

BornAtTheRightTime

The financial arguments for and against renting/buying boil down to buying at the right time and right price versus renting at the right time/right price. When the property market is high (like now) it's not normally a financially astute decision to buy - property values can, and are more likely to - go down.
It is however reasonably financially astute to buy at some point, rather than rent for your entire life.

However most people put emotions and lifestyle choices ahead of the financial repercussions and buy when they feel ready to. And why shouldn't they? It's their money.

Radiantsoul

There is a seperate "debate" forum where people argue endlessly over this kind of thing.

serious_saver

We are renting whilst we try to buy and like others we think of it as paying for a roof over our head. That being said we pay more in rent than we would if we were paying a mortgage on the same property because our rent is covering the landlords mortgage and giving them a profit/income.

Coveredinbees!!!!

My 3 bedroom house cost me £165 a month, what can I rent for that?

robthesnapper

I have a 2-bed flat which I'm about to try and sell after owning for 8 years.

I wont make any money on it. Solicitors and estage agents will. Because the mortgage companies changed their rules, the lease needs extending so some rich guy in London will get about £16k. I'll probably have a shortfall.

For only £100 more than what I'm paying on the mortgage I could rent a nice 4-bed detached house with a garden in an area away from the city. True, it wont be mine in 25 years time, but there's no way I could save enough even for the deposit on a decent house now. If the boiler breaks down, I don't have to pay for it.

Meanwhile, my mom has dementia and dad is....yep, probably going to have to sell the house to pay for her care.

Money can go down the drain either with buying or renting.

AnnaV

Radiantsoul wrote: »

There is a seperate "debate" forum where people argue endlessly over this kind of thing.

Oops, sorry - quite right!