What do you consider some of the advantages and drawbacks of renting (if you
rent) or owning (if you own) the place where you live?

79 responses total.

I came home yesterday and discovered a power mower and weed wacker parked in
my bike parking spot near the back door, which I had to move.  I rent.  I have
to put up with loud noises at unannounced times right next to my window, even
after I have just mowed the grass with a quiet mower to prevent this, 20
minutes before.  Also I have given up on growing a garden because it gets
mowed no matter how many fences and large rocks I wall it off with.  Last time
it got mowed just before the strawberries were ripe.  Owning gives you more
control over the grounds.
        Owners also do not have to put up with city inspections every two
years.  I have to put in smoke detector batteries, make sure all the
self-closing doors are not propped open, take down my inside clothes lines,
remove the storm windows from the front hall closet, and then put up with the
latest set of silly requirements such as little pegs in each window on my
sunporch to keep out potential burglars.  I never open those windows, and I
came home one day to find that all my plastic storm windows had been ripped
off to get at the windows.

So, when are you going to finish your house?  :)

I like owning my house.  There's more work involved, like yard maintenance
and house repairs.  But I'd be paying for them anyway if I rented.  

I kind of like renting.  I don't have to mow a lawn, I don't have to plan my
finances around the next major repair the house needs (something I used to
always see my parents doing -- they were always saving up to get *something*
fixed), and if I decide I want to relocate I'm not stuck here until I can
find a buyer.

I don't have to deal with sidewalks, yards or repairs in my apartment.  
Since I'm not too interested in any of those things, it's a good deal.

I have to deal with noisy neighbors at times, which is a downside.  I 
don't have as much privacy as I'd have if I owned my own house, 
and can't change the appearance of the inside or outside of the house 
much.  And I'm not building up any equity.

I don't really mind the apartment much.

Because of bankruptcy, renting will probably be the option for a while 
here.

Jim does most of the repairs in my apartment and the other two - he has snaked
out the sewer a few times (my landlord offered to pay one of those times),
replaced the toilet and shower (he got paid), turned off the water when a pipe
rusted through and tracked down the landlord, got the upstairs shower to bring
in and let out water, rewired their light so it did not keep blowing a shared
fuse, fixed their doorbell, etc.  I have reputtied the windows.  I think a
newish house would be less maintenance work than an old apartment house.
Also you do not have to put up with real estate people tromping through,
turning on all the lights, opening the doors, and then leaving.  Or brown pain
being slopped on the window glass every year before inspection and having the
scrape it off.  Or having to scrape paint off all the cabinet doors so they
will open.

Renting would be preferable but for my percieved need for territory that one
cannot be kicked out of. The only way I know of being evicted from most houses
(if one avoids the homeowner association neighborhoods) is nonpayment, whereas
that, plus a host of other things, can lose you an apartment.

My preference at this time, should I gain the ability: Rent a place on as
short a lease as possible within 20 minutes of whatever job I have at the
time, and own territory a couple hours outstate, preferably with no school
system to speak of, to serve as a more permanent home.

I like owning my house even though I did have to spend a good chuck of money
this year on a new roof. I dont like doing yard work but I dont hate it as
much as I used to and it *is* pretty good exercise which I need. Financially
it has been a good choice for me. I never have to worry about my rent going
up and since I plan on staying here for a while, that is a good thing. I also
really love the tax break I get. I also like the fact that no landlord can
tell me what to do. If I want to keep 3 dogs here, no one can tell me not to.
If I want to paint a room, no one will tell me not to (although I am lazy
enough that I have never painted any rooms in my house). Sometimes I get all
giddy and walk around my yard thinking to myself "I own that tree" "I own that
flower" hahaha.

When I was a kid, I always wanted to pick the flowers that grew in the spring
but was never allowed to. My first spring in this house, I picked a whole
bunch of them and it felt really fucking good because NO ONE could tell me
not to. This spring, I decided that they look better outsides. haha. 

Actually, even owning your own home does not protect you from city
inspections.  They are on a 5 year cycle, though, not the 3 years for
rental property.

Never noticed city inspections when I was renting a house in Ann Arbor.

Drew, I assume the "no school system to speak of" refers to property taxes.
If you live in Michigan, that's not much of a concern, since schools
are funded primarily out of sales taxes and whatever can be cajoled
out of the Legislature.  Of course, that is changing, slightly, as the
Legislature realises that funding schools isn't all that much fun.

i would not want to own a house because i'm not ready to commit to living in
one place for that long and owning a lot of "stuff". if i had a lot of money
i'd probably buy a building and rent out the other units to pay for the
expenses, and sublet out my unit if i decide to fuck off to somehwere for a
while. my friend does that, and he's got it good. he also has part of it set
up as a bed and breakfast, and his building is like a family.

If you roll-over a lease (rent) for more than a year you ought
to seriously consider buying.  If you are in any significant 
income bracket tax wise (if you file more than a 1040-ez) and 
have a regular job there is no sense in renting, especially
now.  Interest paid and taxes on a home are these days 'cost
of money' way better than any other investment.  Lets say you
pay 1000$US rent per month.  No matter where you live and what
conditions that is money out of your pocket.  Meanwhile the
owner of the property gets your money plus all sort of benefits
on his tax return that reduces his total tax on his income
but doesn't benefit you in the slightest.  Consider buying
a house where the total cost per month is the same as what
you currently pay in rent.  Suddenly, you itemize deductions
on yer income tax form - deduct some portion of property tax
and interest  that previously was to the net of the person
you rented from who itemized on his 1040.  Plus each month a 
portion of yer payment pays down the total amount you borrowed 
to buy yer home as opposed to pure money out of pocket each 
month if you rent.  When you sell house you may have to pay
taxes on difference unless you immediately purchase a new
home otherwise it is pure cash in yer pocket - minus the
taxes which are still less and leaving you with a total net
gain.  I don't want to even begin to mention the other
benefits that a homeowner has income tax ways...

So find me a house that has mortgage and tax payments of $490/month.
I have never heard of 5-year city inspections in Ann Arbor, nor has Jim, who
bought his house over 25 years ago.

A very large part of Ann Arbor property taxes goes towards funding local
school, so much, in fact, that homeowners are entitled to a refund of part
of their state taxes for paying such high local taxes which disqualifies Ann
Arbor from state funding (I think).

Re 9:  Every 5 years?  I've been in this house 6 years; when is the inspector
going to come knocking?

We've been in our house for 20 years, and no inspector has ever called. 

I can't imagine renting again. Owning is a lot of work, and a lot of 
expense if you have to hire someone to do every little repair, but over 
the long haul, the financial advantages outweigh the disadvantages. 

In addition to the tax deduction, there is also the appreciation. While 
not all properties appreciate, if you select wisely it will. This is 
something you give up when you rent.

Ever-rising rent in part of the steep premium renters pay for not
(being able to) own(ing) their home.  as some of you know, I cannot
pass up the opportunity to note that in Michigan, school property taxes
are usually four times higher on rental property than on owner-occupied
homes.  Also, renters face higher median housing costs than do
homeowners, despite getting inferior housing and having much lower
incomes with which to pay for housing.  Ain't economics great?

I rent.  I pay a huge amount of rent.  I pay more in rent than I was making
in total a year before I moved in here.  I'd prefer to own a place.  I'd like
what I pay for housing to be an investment, rather than money I pay out every
month and never see again.  But I really like my apartment, and I really like
my neighborhood, and to buy a comparable place around here would cost
significantly more.  Then, given the state of the industry I work in at the
moment, and of the economy in general, I could end up in real trouble if I
bought a place, stopped being able to pay the mortgage, and the value of the
place dropped.  Thanks to rent control I can't be kicked out easily, and the
rent can't go up by anything noticable.  I'll keep renting for a while longer.

In Ann Arbor, I had a series of landlords who weren't good about doing
repairs, which ended up being quite a problem in both places.  The first of
those two landlords was a company that was also very obnoxious in lots of
other ways.  That made me very much wish I owned a place, so I would have had
more control.  That house prices in the last neighborhood I lived in in Ann
Arbor appeared to double in the two years I lived there also makes me thing
I should have bought a place.  Here, my landlords are neighbors who have also
become friends, and the only serious repair issue I've had (the water heater
started flooding the basement on Christmas Eve as I was late to catch a plane)
got dealt with very quickly.

I'll buy a place at some point, maybe the next time I move, but I'm not in
any hurry.

Re #14:  Ever hear of "Proposal A", Sindi?  It amend the State Constitution
to change the funding of schools from local property taxes to whatever the
Legislature cared to raise.  (The text wasn't quite finished on election
day, as I recall; there was something about raising the sales tax to six
percent, with the raise going to the schools, and also raising the tax on
tobacco, again directing the increase to the schools, but I don't think
that was part of what made it into the constitution.)  This was in 1993,
as I recall; it went into effect in 1994.

The State now levies 6 mills on all property in the state, which is
supposed to go to the schools.  It levies another 18 mills on commercial
property (which includes rental homes), if the local voters approve it.
(Those in Ann Arbor have.)

Because Ann Arbor spent so much more than most other districts, we were
allowed a "hold harmless" millage.  It is limited to 13.66 mills, but
can only raise $1234 per student, which means it's just 7.xx mills.

School districts can levy millages to pay off bonds, which can only be
used for property, not salaries.

School districts can also levy a set millage, for a limited time, to
maintain property.  (Currrently called a "Sinking Fund", but earlier this
year there was some work being done on the enabling legislation which
would have liberalised the rules and changed the name.  I haven't heard
recently how the amending bill was proceeding.)

We bought a house three years ago for $140,000.  It is on the market 
today for $209,000.  We expect to get more than that for it.  So we are 
making $70,000 on a $140,000 initial investment.  Yeah, we had lots of 
expensives and paid a fair amount of taxes and mortgage interest, but 
basically we've been living for free for three years.  This is better 
than renting, which just sucks away your money and never gives you any 
back.

a couple minutiae many people don't realize:  1) the legislature effectivly
forces school districts to approve and levy the 18-mill "mon-homestead"
tax, by subtracting the expected revenue from the state aid the local
school district receives.  no levy = big hole in school budget.  2) the
"hold harmless" mills are levied ONLY on homesteads, i.e. owner-occupied
homes.  So the "extra" millage on rental property in A2 is not 18 mills,
but rather 18 minus 7.xx or whatever.  if hold harmless mills exceed 18
(as in Southfield) then the excess is levied on all property so that the
property tax rate is uniform.  (3) homeowners can still qualify for the
"circuit breaker" income tax credit even if they didn't pay their property
taxes in the appropriate calendar year - they get credit for the property
taxes BILLED.  This may be adventageous for taxpayers who itemize more
deductions in Year 2 than in Year 1 and who might pay both years' prop
taxes in Year 2, while still enjoying the Mich circuit breaker in Year 1.

I'm very glad I own my home. My house payment is much much less than a
rent payment. 

My house payment is more than twice what I was paying in rent. But, I 
was renting a 300 sq foot one room studio apartment that wasnt 
maintained all that well. My house payment is less than the rent on a 
house would be. 

Like Jan, we are also living for "free", as we paid off the mortgage on
our house. There are operating costs, and taxes, of course, but no
other "rent". The house has also increased a lot in value since 1982. 
If we had just continued to rent we would have nothing to show for it.

I do very much like getting the mortgage interest deduction on my federal
taxes.

Around here there tend to be lots of political arguments that I've been
describing as the "save our slums" movement.  Proposals to build nice things
in run down neighborhoods get blasted as evil gentrification that would
make long term residents unable to afford to live in their neighborhoods. 
In San Francisco, and probably some other Bay Area cities as well, there have
been laws passed to make it more difficult for people to buy homes to live
in rather than renting, because home ownership is seen as shrinking the rental
property supply.

While it does strike me as a bad thing to force eople out of their
neighborhoods, the way this is being handled strikes me as a case of severely
flawed culture and public policy.  I'm certianly glad there are landlords
making rental property available, and for people like me who aren't feeling
ready to make a long term financial commitment, renting does strike me as a
reasonable choice.  But the notion of people living in the same place for 20
or 30 years or longer and having no ownership stake in their neighborhoods,
to the point where neighborhood improvements hurt rather than help
neighborhood residents, does not seem like a good thing.  The notion of
treating home rental as a permenant arrangement, rather than something people
do over a term of just a few years, essentially expecting to be taken care
of in perpetuity by a landlord, doesn't strike me as smart long term planning.
If I knew I wanted to stay in the same place for several years, I'd want to
take control of the situation and make sure it could happen, and it seems to
me the best way to do that is home ownership.  It's really not clear to me
who the "tenant activists" are helping around here, other than their own
advocay organizations, when they push for public policy that makes home
ownership difficult.

Now that's a difficult problem to solve.

Is it possible to buy an apartment in SF?
You don't get the mortgage interest and property tax deduction except on
amounts that total over about $4500 (more for couples) including state tax
and donations.  

Re #26: that's still not as good as not having a mortgage.

Another factor is that I live alone.  An entire house would be massive
overkill for the amount of space I need.  It also seems to me that while
people usually sell a house for more than they paid for it, they
usually spend more than the difference in repairs and upgrades over the
years, unless they happen to live in one of the areas where property is
really in demand.

Mostly, though, I just don't want to tie myself down that way until I know
for sure I'm somewhere I want to stay for most of the rest of my life. 
Buying a house is such an expensive, aggravating, drawn-out process, and
selling one is doubly so...

It's possible to buy an apartment just about everywhere.  That's what a
condominium is.  However, San Francisco has some pretty strict limits on how
many rental properties can be turned into condominiums per year.  There was
also a proposal being pushed by some city officials recently to ban the
practice where a group of people jointly buy an apartment building and move
into the apartments, but I don't think that passed.

If you own a house or apartment and the value doesn't go up, you still get
back most of what you paid for it when you sell.  As long as you're there long
enough that the non-refundable costs aren't more than you would have paid in
rent during the period, it's a good deal.  The real danger in a volitile
market is that the value of the house can go down, in which case if you sell
you're stuck paying the difference.

I guess I've never quite understood how a condominium works.  It seems like
it'd have most of the disadvantages of an apartment, except worse because
you'd be stuck *owning* the thing as it deteriorated if the management
turned out to not be able to keep the building in good condition.  But maybe
I misunderstand.

You understand pretty well, actually.  What makes it worse is that the
management charges you for the outside (outside your specific condo)
maintenance in the form of "association fees" which you have to pay as a
condition of the purchase.  Those fees are charged monthly, quarterly, or
whatever -- so they raise your effective monthly mortgage payment.  When a
developer builds a new condo development, they're usually responsible for
maintenance, etc. until all the units are sold, so they hold the fees way down
to make the condos more attractive to potential buyers.  At some point,
though, the association takes over.  They wind up having to raise the fees,
sometimes drastically, to pay for things that are starting to need fixing.

On the good side, you build equity and can deduct your mortgage interest. 
The condo *may* also appreciate, though many don't, or at least don't
appreciate much, in part because of the association fees effect.  My
understanding is that during the boom housing market here in the late 90s,
many condos didn't increase at all.

Our friends with a condo in Chicago are required to pay someone to mow the
lawn every week, and probably for snow removal and other things they could
do themselves.  If you are going to pay for these things anyway, it might be
slightly cheaper to have them done in bulk.  There are also rules about not
being able to change the outside appearance as it affects property values.

Condos appreciate but usually at a lower rate than houses. Although, if 
rents in an area are going up, the price of condos will go up too 
because it becomes worth it to buy one and rent it out. There are other 
advantages too. The maintenance on attached units is generally cheaper 
than on detached ones so when the building needs a new roof or 
something, each person's share is less than it would be to do a major 
repair on a house. *shrug*

re#27 - That sounds like a policy designed to benefit *current* 
homeowners. A policy that is sold to the public as being good for the 
poor -- "Vote for this because it will help the poor" If you really 
wanted to make sure affordable rental housing is available, you 
encourange growth or increased population density. 

Development in areas like that nowadays is usually about *decreasing*
population density, by creating gated communities with large houses in them.

The Bay Area has a bunch of gated communities full of "McMansions" out on the
edge, where land is somewhat cheaper.  The impossibly high demand here tends
to be for high density urban housing, though, and my impression is that urban
development here still tends to be as dense as the developers can get away
with.  This too is controversial -- often presented as greedy developers
driving prices up by building too much expensive housing, but it strikes me
as a good thing.

- Backtalk version 1.3.30 - Copyright 1996-2006, Jan Wolter and Steve Weiss