By renting property from another person you are helping them invest in property and enrich themselves instead of yourself. Also you put yourself in a position where you are totally dependent on another person for a home. There are times when apartment complexes are sold to new companies that have different rental procedures and requirements. Quite a few people who have less than perfect credit or rental histories find themselves unable to renew their leases when new companies take over.
Never put my eyes on this section of the forums.
Originally Posted by mhd
We (my wife and I) tried to buy a house in Brussels, we have 2 kids and come from the countryside.
We were both working at that time and wished at least 3 bedrooms and a garden. We couldn't buy anything, even in the far suburbs.
So we decided to buy 2 small buildings in the countryside to rent them and rent our family house with the money we get each month.
Today, I'm quite happy we didn't buy our family house, for these main reasons:
- We may move to differents places in our lifetime as we already did (India may be our next move in 2 years),
- Buildings are an investment which can provide you a safety in case of long term unemployment (I can elaborate on this one if you don' see why),
- When I see the money spent just to keep the 2 buildings in conformity and safety, it's expensive and safety rules and laws are changing very often,
- The income, if you think before you buy the buildings, can be fractionned so if one of your loaners is not paying, you don't get in deep trouble,
- After 5-8 years of mortgage, you already got your money back if you're selling one of the buildings, even if the housing economy is low, when your family home will only cost you,
- If loaners are not paying their rent, you can get rid of them easily and try a new person who can be a better one and you can rent him/her at a higher price, thanks to the housing rents evolution,
- After a period of 15-30 years, your buildings become a full income, which comes handy when your kids are facing unemployment and/or raise kids,
- You can bet on transforming your buildings to get higher incomes, yet your family home transformations would be only driven by your wishes for new aesthetics and/or facilities/commodities,
- Your kids will be able, when you're dead or mad old, to benefit from incomes, instead of fighting mentally or as enemys to keep or sell the family house.
The list can go on, but as I don't think I'm going to stay and work in Europe in the next 40 years, and as I hope my kids will do the move too if they can understand where the good life (and money) is.
I will add that when you're investing into your own house, you're quite stuck there, you're investing money on a place and only one, for your health and happy living.
What if the neighborhood becomes a place you don't like? If the town decides that an airport is gonna be build here and they will evacuate you and put your walls down?
What if your kids relocate in another part of the world and you can't see them often cause your mortgage is too heavy to support more than 2 plane flights per year?
What if you have a great job opportunity, say at 100 miles from your home, will you do the journey each day?
What if you're divorcing?
How would you feel if you had to work just to pay for your mortgage till you get really old, the big family house is empty and you just need to live on the first floor?
Sometimes buying a family home is and investment that goes well with your job income, sometimes it just doesn't work. Living the way everyone is living, cause it looks cool or normal isn't the cleer way.
And just to finish with my point of view, what about my concrete example:
- Paid 235 000 Euros for 2 buildings, would have got a 2 bedrooms house in Brussels for this and the same mortgage.
Paying a 1600 Mortage for those buildings.
Buildings net income (mortgage and taxes paid):
- Good months = 1600 Euros
- Bad months = 1000 Euros
My home renting = 1500 Euros
So I have to get 600 Euros at worse to pay my rent and live.
I would have paid as much to fix things in my house.
Let's imagine I loose my job, my home rent is still paid or the 2/3 of it.
Now I bought my family house, I loose my job. I can't pay the motgage, I loose my house. I need to relocate and rent, where will I live with my 3 fellows without a job and with debts over a "broken mortgage contract"?
I feel more secure in my actual position, and I may even sell one of my buildings if my life is getting hard.
If my job income is getting higher, I may relocate in an even better house.
Who's happy to sell his house for any reason? And what if you bought a family house and finally it's not working..?
End of my Renting Vs Buying argument.
I think the question " is renting forever ok?" should be asked to yourself after a few other questions to really determain what senario would work best for you. There are so many variable and factors and questions that can lead you in either direction.
My advice is if you plan on purchasing you should look into a duplex unit.
It's better to own a home or condo and then rent it. I hope to find other interesting posts here at http://www.deephousepage.com
This is what you do:
Find out how much your mortgage payments will be and include the extra expenses.
Pay that amount on your own rent + utlities for a year and put the extra money in a savings account to see if you can hack it.
When the year is up use the money saved toward a house or the down payment.
Research the area before you buy to see if there is a history of flooding (natural disasters), crime, a chemical plant-sewage treatment near by, who your neighbors wil be et al. so there are no unexpected surprises.
Last edited by Dal-Tex; 10-09-2012 at 04:52 AM.