RENT -V- BUY>>

  • Thread starter THE MACHINE
  • Start date
T

THE MACHINE

Guest
RENT -V- BUY>>

I know most people would say that one should buy rather than rent if they can afford it, but to look at this question properly one also needs to consider the needs of the buyer ...where does one want to live ...???
Sure could buy house in area for say 300k ...but would prefer to live in area where house would cost 450k.

Point is could afford to rent in area with 450k houses but not buy ...perhaps renting is better if it increases your quality of life ( individual matter of opinion ).

Any thoughts...???
 
Buy

Yeah sounds good in short-term,

but what about ten years down the line, you have paid ten years rent....

But if you buy house for 300k you have paid ten years mortgage, probably value of house has increased, and you could effectively sell up make a small profit, remortgage and have your house in the 450k area, YOUR home, not an rental but yours.

It may not even take ten years!!
 
Rent -v - Buy

Ya perhaps but 10 years in an area that you did not like ...??? ...what about other short term concerns :

School for kids ...school A in the 450k area great reputation facilities etc , School B in 300k area not so hot...

Access to work :

450k area within walking distance , no time spent in a bus / train / traffic ...

As for property value rising further ...if there was ever a time when property was not likely to rise in value its now just after we've have the peak ( matter of opinion of course but realy guys ...how could house rise much further ...???...what tpye of salaries are people getting these days and are the rising as fast as property values...??? )
 
Re: RENT -V- BUY

The big difference is that by renting you are paying for a service (accommodation) while by buying your are paying for equity in the property (capital repayments) and for the use of the money to buy it (interest repayments). As for the quality of life issues I don't believe that it's possible to put generally applicable hard monetary values on intangibles such as these as it's very much a question of personal preferences. Many people have some concept of their ideal dream home/location but I reckon that very few ever get to live there and some that do may find that the reality isn't actually what they expected. ;) Life is never perfect and we all have to make compromises and trade offs in the interests of pragmatism. Apologies for the philosophising... :)
 
Rent -v- Buy

Fair point O , wasn't realy trying to put a € value on the intangiable asset " Quality of Life " ...however if i currently rent a house in an area that i love , easy access to work , good schools for kids , wife loves the area to , and we both feel that non of the areas we could afford to buy would even half match our current location ...should we still buy a house in the less desirable area ...???

What if we were to buy a house in the countryside ( cheaper ) rent it out cheaply covering half the mortgage ourselves , continue to rent in our ideal area and simply move to the countryside when i retire...
 
Re: Rent -v- Buy

Sounds to me less like an academic discussion but rather somebody (you! ;) ) who is generally happy with their lot while renting but is coming under pressure (direct or societal) to buy because it's perceived as the better thing to do - and maybe wants reassurance that what they're doing isn't mad?

There is no overriding reason for everybody to buy a property if they don't want to. You are getting a service for the rent you pay so if you're happy with that then that's what matters. Of course buying a property does give you security of tenure (which, even in a non ideal environment/property/location can be worth an awful lot!) and probably increases your overall net worth and by renting you are foregoing these benefits.

You could buy a property to rent while renting accomodation yourself but some of the possible disadvantages are:

(1) You miss out on the first time buyer benefits (lower rates of stamp duty, mortgage interest relief, CGT exemption on resale etc.) that go with buying your own home

(2) You may find it difficult to find a lender who will give a mortgage for a rental property to a first time buyer
 
Rent -v- Buy

Ya your not wrong O Probable looking for some reassurance ...but mainly trying to hedge my bets by having some interest in property , already in Equity and Fixed Interest and concerned that property remains the asset class which i have no exposure to ...i'm just convinced that i would regret it if i moved to an area that we didn't like ...as for the investment property banks have already said they'd give me the mortgage if we decided to buy in the countryside , reason i said we'd be prepared to pay half the mortgage is just my prudent approch ...assume the worst rental market possible and drop rents to oblige.

Summary :

1. Continue to Rent the house in the area we like.

2. Property in the country side is being paid for partly by us partly by tenants.

3. 30 years time retire to the countryside house or another house in the countryside ie...on ehouse would effectively hedge the value of buying another in thye same region.

Didn't realise that we had to be living in the house to avail of the PPR status or various reliefs...cant see how CGT would arise , either never sold by us or we move in for a short period of time now its our PPR no CGT.

Am i so wrong to have quality of life my top priority ...dont want to look back on my death bed and think that i wasn't happy in life.
 
Re: Rent -v- Buy

Didn't realise that we had to be living in the house to avail of the PPR status or various reliefs...cant see how CGT would arise , either never sold by us or we move in for a short period of time now its our PPR no CGT.

If you ever sold the property in question then CGT would apply in proportion to the amount of time that it was rented out even if eventually becomes your PPR.

You should also have a read of these Revenue guides and maybe get some professional investment/tax advice if you are seriously considering the rental property strategy:

Rental income: [broken link removed]
CGT: [broken link removed]
Stamp duty: [broken link removed]

Am i so wrong to have quality of life my top priority ...dont want to look back on my death bed and think that i wasn't happy in life.

Not at all!
 
Re: Rent -v- Buy

I'm 19 years old, so haven't really given this a lot of thought before.

If someone does rent (and never buys a place), what do they do when they get to 65 and retire and so have no house to live in, and don't have the same income they had when working, so they can't afford rent either?

What happens to them, especially if they don't have a relative to live with?
 
Re: Rent -v- Buy

I guess they would have to depend on the local authority or other state body for accommodation if they couldn't afford private rented accommodation and they met the relevant criteria.




These links might also be of interest:
 
Re: Rent -v- Buy

Maybe that's something "THE MACHINE" should also think about
 
Re: RENT -V- BUY

Not if the tentative plan is to buy a property to rent out, live in rented accommodation and eventually move into the rental propery as a PPR?
 
Re: RENT -V- BUY

Oh,- I thought they were thinking of renting somewhere to live in for good (and not buying a place).
 
Re: RENT -V- BUY

If location dictates where you want to live, then look around very carefully. Often you find that you can afford some sort of property in the area where you wish to live if you are willing to compromise a bit. If you want to live in a certain type of house in a certain location, then your options are a litlle more restricted.
 
Rent -v- Buy

The point here guys is to try balance the maximising of your quality of life with the correct provision for ones future and the future of ones family.

Longer term one needs to ensure that adequate provisions have been made for retirement ; Pensions and accommodation (Property in the countryside in my example), this may not suit everybody as they may not wish to live outside Dublin.

In my case i can afford to rent in what my family consider a good area in Dublin , but cant afford to buy nothing cheeper than 450k. At the same time were happy to retire in the countryside, so if we make adequate provisions for these plans why should we not enjoy the best of both worlds... i dont necessarly subscribe to the idea that one cannot have everything they want , sure i'll grant its not always possible , but i believe people will start to change their attitudes towards owning their own property all of their lives in order to improve their quality of life overall.
 
Rent -v- Buy

Hello,
I find this topic interesting and I would like to put a different angle on it.
I am in a situation where I pay 580 a month rent. If I bought a 320 k apartment I would be paying way over 580 a month in interest which is going to the bank instead of a landlord.
I know that the main advantage is that the mortgage payments will not rise as much as rent over, say 10 years, but is getting a mortgage of a substantial amount and "upgrading to a nicer apartment" not just transferring your monthly payment from the landlord to the banks interest payment.
My question is, should I continue to pay 580 a month and just save the rest in order to get a smaller mortgage in 5 years thereby reducing the interest payment or is there a good financial reason to move now and start paying the mortgage ASAP. I am ignoring the current trend of house prices as I just want to understand this concept alone before I move on further.
I hope I have conveyed my message across and thanks for any insight.
Confused by over analysing :)
 
Rent -v- Buy

Hi Guest,

Current historic low interest rates would be one reason to support buying now as you could avail of relatively cheap finance ... if you'd be happy to live in the area you could afford to buy then go for it , all do some people would argue that appartments are a bad buy at the moment , but if your planning on living in it then it shouldn't be a problem if its value falls in the short to medium term.
 
Re: Rent -v- Buy

i heard a story recently of a family renting a house for 65 years. all the kids had their own homes and when the mother had to go into care , the house reverted back to the landlord. they had the house for a lifetime , had done it up etc and in the end were left with nothing to sell to pay for a care home or to pass on to the kids . it was in a part of the country where until relatively recently houses cost nothing and the father was a garda sergeant until retirement so had no excuse for not buying. is there a moral here somewhere.
 
Rent -v- Buy

Hi Eammon66 ,

Yes , moral of story is that people should make adequate provisions for their retirement.

As for passing nothing onto your kids ... so what , since when are parents required to provide inheredance for their childern ...???

Is it not enough to have provided for them up until and after College ... after that they should be able to provide for themselves.
 
rent v buy

well done, THE MACHINE - glad to see soemone one inject a biot of common sence into the housing market... too many people have forgotten what houses are for..they are HOMES, places for living in and from... and see them only as ways of making money and advancing to ... to what? to a better place to live....what about putting up with less enjoyment and fullfillment.. fine to "put up with" if it is an investment, but your HOME??? when will people stop this madness??
 
Back
Top