Hacker News Reader

Comment by brianwawok | Hacker News Reader

Not having your rent increase or being told to move, as are being able to make your home exactly what you need. My home has a 15x15' home gym with all kinds of upgrades I like.. finding a ready made house with my exact ideal gym? Low odds....

View on HN

We bought a house in a 'tech hub' (Cambridge) during the crash--it was a little scary at the time, but worked out well for us. Our current costs are about half the going rents in the area. Prices have gone up so much in the last few years we probably couldn't afford our neighborhood now. But deciding to buy or rent (assuming you have a reasonable choice) often involves a lot of personal factors beyond the purely financial--you have to weigh your own priorities and likely needs over time.

You also have to factor in a possible divorce, as in you have to ask yourself "what happens with the house/mortgage payments if we split up in 10 years?". Truth be told there are a lot of variables that we decide to just gloss over when taking decisions which will affect us financially for the next 2+ decades. Not sure why this happens, we're otherwise pretty rational creatures.

Or you could hope your marriage lasts. The reason we gloss over the variables is that if we tried to account for every possible variable in life, we would never get around to doing anything, and there would still be uncertainty. At some point you have to make an actual decision and move on.

That's the way my recent home buying friends look at it. They know they'll be in this metro area for X years and given most landlords raise rents by 3-5%+ in this area depending on demand, getting a 30 year fixed mortgage lets them lock in housing, in a location they want, for a fixed rate per month that never goes up. In fact, if they do it right, they can refinance and get the rate lower. Net result, housing becomes a fixed, rather than variable, cost they control with the bonus of being able to do with the space as they want. No questions asked.

I think that's a bit naive, as owning a home can unexpectedly get VERY expensive (roof repairs, foundation repairs, etc)

Apples to Oranges.

If you are renting you are prioritizing the location rather than the house. You can't find a house with your ideal gym, but you can't change your city to New York city.

The way I see it: If you don't plan to live in that place for the next 15-20 years, then you shouldn't buy. You can always invest your money in more liquid assets.

The money you're not using to pay rent you mean?

But instead you are paying a mortgage. Whether that is a net gain or loss depends on where you live.

Where I am (suburb of Vancouver) a mortgage payment for an apartment of similar size/quality/location to what I have now is about 50% more per month.

I don't know how it works most places, but when I bought my first house my payment was almost double what I was paying to rent the apartment I vacated.

Houses tend to cost more than apartments, you upgraded, of course it cost more. It's generally cheaper to buy a place than to rent the same place; your rent is paying the landlords mortgage on that property + a little extra for him and buffer for time between tenants. People don't rent out places for less than it cost them unless they're desperate.

Yes, of course. I moved from a single bedroom unit in a building with dozens of apartments to a house with three bedrooms and two bathrooms, a yard, an attic, better appliances, better carpet, and a much better kitchen.

That's sort of normal, I think. You get a better standard of living for that extra money.

My point was, originally, that if you're in an apartment you'll most likely be able to save for a downpayment on the sort of house on which you'll be able to afford the monthly payment. If you can't, either you're not the kind of person who saves money or there's something wrong with your math.

Ah, yea I didn't get that at all from your first post; thanks for clarifying.

15-20 years seems a bit steep.

If staying in a city 1 year, you almost certainly should rent. If staying in a city for a guaranteed 30 years, you almost certainly should buy.

The exact place where those two switch over? It can vary on a lot of things. Single and gonna get married soon? Buying a studio condo may not be that smart. Married with 3 kids and stable schools and family? May tip towards the buy sooner range..

For example where I live (not major city), I cannot rent a house like the one I buy. The best house I can rent would cost 50% more than my mortgage payment, and only be about 75% as nice.

Reply on news.ycombinator.com