Would Like Opinions: How Many Would Rent On One Salary Than Own A Home On 2 Careers?

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I guess it really depends where you are, but it many parts of the country it is no cheaper to rent than to own. And, if you consider price per square foot, it may actually be more expensive. If I were in that situation, I would sell my home and buy a smaller one, one is a less expensive neighborhood, or one that needs work. I would not want to rent. If it were the only way I could stay home with my kids, I’d consider it, but I think that situation could be avoided, esp. if you have equity in your home. A home like mine (2 bedroom townhouse) would rent for about $300-$400 more than we pay in mortgage, taxes, and insurance. An apartment would be maybe $100 less per month than all those expenses. I know because we lived in one. When we moved our combined mortgage, tax, and insurance payment was only $80 higher. And we got an extra 400 square feet, a finished basement, and a yard. So clearly it was cheaper for us. Maybe not for you, but quite possibly if you look.
 
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Peace-bwu:
Not only did we choose to rent, but we choose to live in a Base Housing duplex. 🙂 Sure, I desire the “Better Homes and Gardens” house of my dreams, more than any material possession! Believe me! But we have the firm belief that we can turn any house into a home.

We bought a moderat home when we lived in Florida(6 yrs ago) , thinking we would be investing money on real estate, rather than throwing it away on rent. This was the worst move we ever made. Our house was three years old when we had to move and we lost a grande total of $15,000 ! We had to pay someone to buy our house which was still in perfect condition! It wiped out our savings, ran up our credit cards and hurt our credit, but we finally sold it to a family for $8, 000 less than we paid for it.

Long story short, the market was flooded with brand new homes, so nobody wanted to buy a 3 yr old home. It was cheaper to buy a house than to rent. We checked out renting our house and the going price for rent would have barely paid our mortagae, let alon paid for upkeep. Our builder went bankrupt because of class action law suits due to faulty construction in another developement, so nobody wanted to give us top dollar for our house, even though the construction was fine. The week we were closing on our house, the county changed the flood zones from C to A, so their offer changed to $3,000 less after their appraisal. IT was a MESS MESS MESS! Just about any time you are buying a house, you are taking a gamble. Know your market and be prepared that the market can go to pot.
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Your situation was very unfortunate, but I don’t think it’s the norm. In many perts of the county housing prices are rising rather than falling. In our area of the county, the new homes are actually making neighborhoods more desiable and driving up the cost of older homes. And rental rates are very high.
 
Sparkle,

I’m in the mortgage business so maybe I can help you. There are plenty of options out there. If you want to discuss them with me, I’d be more than happy to talk with you about it. And no, I’m not trying to get business!!
 
I think that in general, it’s harder to make money on a newly built house (when it’s located in the suburbs), than it is on an older home in an established neighborhood, all other things being equal.
 
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Cupofkindness:
I think that in general, it’s harder to make money on a newly built house (when it’s located in the suburbs), than it is on an older home in an established neighborhood, all other things being equal.
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Where in the world did you come up with that?
 
This is a well known fact, and is what MooCowSteph is describing in her post. Where and when ever you have a building boom, particularly in sprawling suburban developments, it is difficult for someone to sell their newish home when someone can build exactly what they want brand new within a fairly short distance. I live in Dallas and see this happening in cycles. This is why homes in the city of Dallas maintain their value in the short run and in the long run, because the housing stock within the city is relatively fixed. When supply is greater than demand, which is often the case in new housing developments in the suburbs, the price of a previously owned house will be less than it would be otherwise, unless construction costs have gone through the roof. Imagine trying to sell your used house when the builder still has vacant lots left on your street that he is aggressively selling himself! In any case, I see this happening through out the Dallas area. And in other parts of the country as well, where ever there is a lot of new construction. Sorry to hijack your thread, Sparkle!
 
We bought a house that we could continue the payments on with one salary.

Lots of times we fell behind in the fixups and maintenance because of schedule conflicts with work; I used to travel A LOT!, but it was ours.

The only issue I would have at this time was whether or not there is a “real estate bubble” and to play the game of trying to guess whether house prices will come down. That is a geography and demographics issue (as well as other things).
 
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wabrams:
Where in the world did you come up with that?
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I seen and experienced it time and time again. Remember the old saying about what the 3 most important features are in selling a home? Location, location & location. Older neighborhoods (city and inner-ring suburbs) are frequently located closer to city centers and mass transit. Thus commutes are much more manageable than in far-flung suburbs with new houses. Schools are established both as to the population served and outcomes demonstrated, as opposed to some new building that just opened it’s doors 2 years ago to handle the crush of the new population. Often recreation and parks are better established in existing, mature areas–not to mention proximity to desireable locations such as views, waterfront, etc. Then there is always the character issue–homes in some new subdivisions are indistinguishable and often utterly lacking in character. If you try to sell one after living in it for a couple years what edge do you have over the brand new subdivision going up just down the street?
 
Island Oak & Cupofkindness,

This isn’t a hard and fast rule. I should have asked a more detailed question, thats my fault. Sometimes the home market has newer homes increasing in value in the double digts (percentage wise), while older ones lag behind and vice versa. Dpends on the market, which is always fluctuating.
 
True enough! It all depends on what part of the country you’re in and what piece of the pie you’re looking at. If the old housing stock is delapidated, square footage is low, or the residential neighborhoods are undesirable, then yes, you will have a lot of appreciation in the newer stock. Dallas is unlike a lot of big cities because there are lovely residential neighborhoods scattered throughout the city. And most of Dallas is fairly new, built since the late 50s/60s. Some cities have such a declining urban area that no one really wants the old, outdated, small homes anyway, so they are left for the poor. Whatever it is whereever you live, it just important to watch those trends in order to make the right choice about your home purchase. We thought the hot place in our metro area was Plano (a suburb of Dallas), but lately entire neighborhoods seem to be for sale due to adjustments the supply and demand of the high-tech labor force. I’d rather live in a dated home that sells fast than a newish McMansion that might sit on the market for months on end waiting for an upturn in the local economy.
 
What I’d do in your shoes also depends so much on your rental and real estate market, especially since home prices are going up so quickly. Also, with the cost of the Iraq war and other Federal deficit spending, mortgage rates are only going to go up. The two together make the rent vs. buy question a tricky one.

To start out, I think parents who want to stay home with their pre-school children should try to do it. I’d look very hard at what we could buy on what hubby makes. Still, buying your own home not only provides more secure housing than renting, but is most often financially more sound as well–IF you don’t over-purchase. If we couldn’t swing something we could live with for at least 5 years on that amount, we’d want to rent the cheapest thing that would do the trick and then save and invest like a maniac. Especially when renting, I’d look not at what shelter we could afford, but what is the least we could get by on… including commuting costs, all of that.

Here is a third option to consider, though: We decided to rent and save until we could make a downpayment on a place we’d stay in for a long time, to keep from paying closing costs. But because property in our area was becoming so scarce, we took the money we did have and bought a piece of property with it, saving the balance left after rent and the lot payment. It appreciated so much that other than those lot payments we did not have to contribute another dime in down payment when we went to build our house.

If you can find a buildable property in a neighborhood and school district that you’d like to live in some day, this might pencil out for you. All that time to consider how to best use your dollars to build a house that is neither more nor less than you need, that uses every square foot in a way that suits you, that really makes the most of its location–that is time well-spent.

Another option is to buy a “fixer upper”… something that is small for you now and needs some sweat equity, but that you could add on to as your family grows. In this way, you’re only paying for the house you actually need now, as well as giving yourself a sort of a “work from home” job that won’t cost you in SS or income taxes. (Child safety can be a real issue in these places, though! Do not forget to check for leaded paint. That is a neurotoxin, no fooling!)

Another thing to consider, though, is whether your employability will erode drastically if you leave the workplace entirely. It may be that the investment you have in your education or training needs maintainence to hold its value. In this case, you may want to plan on working a little bit, in case you are needed someday as the breadwinner. This is another compomise that might fit your situation. Call it disability insurance… and by the way, does your DH have that? If you’re living on one salary, you have to have some idea what you’ll do if he can’t work.
 
Sparkle,

Sorry if you’ve already answered this question, but how old are your children? How many do you have? Thanks!
 
Did you ever think about owning a manufactured/mobile home? It’s very inexpensive living, especially if you can find a nice, pre-owned home. There are decent m.h. parks around if you look, they are not always the trashy places depicted in movies and on the “Cops” tv shows. I’ve lived in one for over 20 years. It’s a lot cheaper than a house or even an apartment if you’re looking to save money–and it’s always a good idea to live below your means in these days of economic/employment upheavals and downsizings.
 
Well Sparkle, it looks like all sides have been covered. I agree with the people saying downsize.

I am a mom of 10 with 6 still at home. When we had our 4th child the landlord was mad. She didnt want more children in the apt. I met someone who said buy our house and my husband laughed at me because we could barely pay the rent.

So here is my advice to you. (a) Try to always serve God in whatever you do~ asking for only what you need (you need to be with your kids and so does their father) and (b) dont look to the future and say it cant be done (dont tell *yourself* no) because its important to be in the present. So just put one foot in front of the other and walk on the water!

The end of the story is~ the sellers put their house on the market and got no other offers while we struggled to get financing for six months. We were in the house for the birth of our 5th. With 4 bedrooms it seemed like more room than we could use, not knowing we would eventually have 12 people plus pets. The living room is the rec (wrecked) room and the dining room is the homeschool room. We dont entertain (except for ourselves) and our house is pretty beat up (so is the car were grateful to have). We couldnt have afforded the rent for all of us. We still have to walk on water and the race isnt over, but for today we are a success!
 
For what it’s worth: my dream house is a Butler building a pre-engineered steel building]. There are millions of these things around the country used for car sales, car repair, warehouses, light industry, office buildings, etc. But they are CHEAP… around $20 per square foot, versus maybe five times as much for a stick-built house.

They can be provided with cosmetic treatment so they don’t look like a warehouse. They have clear span interiors so they can be configured ANY way. Usually, they are a slab on grade, so no basement. But, if you have LOTS of books, they are great because the floor is SOLID.

You could have one room for car repair shop, one for carpentry shop, one for model railroad layout. All kinds of good stuff. These things are advertised all over the place or check your yellow pages. If you have a buildable lot, you could get one of these things put up in no time at all. Up-scale, tony, surburbia/ urbia neighborhoods probably wouldn’t go along, but rural-ish areas would be ideal.

[By the way, my wife does not fully concur with my idea of a perfect house.]
 
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