I saw an article this morning that said, "Where it's cheaper to buy than to rent". And I often hear people say, "It's cheaper to buy than to rent". Buying and renting are both good things (we all hope to have a place to live), and they both have drawbacks. I just want to share a couple thoughts about both modes of living from my own experience and the vicarious experience of others.
First of all, we have to remember that the mortgage payment is a base. In addition, there are also the property taxes and the homeowners' insurance (which is required if you have a mortgage), and with many homes, there is also an HOA (homeowners association), which is another monthly cost. When we moved, I was absolutely not going to get a house with an HOA. But never say never. It was the house we wanted, after a long search, so I shrugged it off. Fortunately, it has remained low so far at $40 a month. HOA's for condos, on the other hand, were much higher.
Then, if you rent, presumably you can call and get things fixed. Of course, the reality is that not every property management company or landlord is always good about fixing things which you think are important. If you buy, you get to decide what's important to fix; but you also need to do the work or hire it out. And while you might ignore some minor things, some things are better not to ignore. A roof, for example, is very important and can be a major expense. If you still have good credit when you need that work done, you can get a loan (the company that installed our new roof offered an interest-free loan). But if you figure that's part of your housing, then now your monthly housing cost has gone up.
But rents often go up every year, and sometimes they can go up exponentially, as I heard about in Portland, Oregon some years back.
If you're confused by now about what I'm trying to say, I'm not trying to say that either renting or buying is cheaper but that it's not as simple as comparing the monthly rent to the monthly mortgage. If you want to know if buying is cheaper than renting, you have to look at many different factors. If you can afford to buy (or hope to be able to in the future), then definitely, there are advantages. As I said, you get to decide what gets fixed and when and by whom. If you don't like how something was fixed, you can hire someone else to do it better or to do it right. That was the thing that finally pushed me to go ahead and agree to buy a house again, as my husband wanted us to do. The security door on our apartment building got jammed shut so I couldn't open it from the inside...twice (and we lived on a third floor so going out the back door was not an option. They came quickly but I felt it should not be an issue at all). And I love our home, so it's a decision I am glad we were able to make.
Another advantage to buying a home is that, as far as I know, I can have whomever I want live with us for as long as I want. When renting (at least in my experience with renting apartments), you are often "required" to list all those who live in your home, and in some cases even add any adults to the lease, even if they are one's own adult children, even only 18 years old. Technically, someone wasn't supposed to stay with us for more than two weeks if they were not on the lease. Of course, people don't always follow that, but the rule is there, hanging over one's head.
Basically, just be aware that any article that compares rent to mortgage, or any other single factor, might not be taking in the whole picture. Consider all the factors. Do the math. And if you want to buy a house, it's a worthy goal! Save up for the down payment. Work on having excellent credit. If possible, save up, also, for some of the repairs that might come up. And if possible, buy less house than you think you can afford; then, if the property tax goes up or the homeowners' insurance goes up, you'll still be okay.
All this might sound daunting, but after moving to Baltimore, we spent about a dozen years in apartments before we were ready to buy a house again. Some goals and dreams take long term preparation and are worth the wait.
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