Renting v. Buying
Some good thoughts from Megan McCardle, who does a lot of solid, readable writing on economics. Highlights:
You should not buy a house because “renting is throwing your money away” or because you expect the house to become a cash cow. As an investment, housing is a good form of forced savings, but do not expect price appreciation to make you rich–nay, not even if it made your parents and all your neighbors rich. . .
I might also be able to sink screws into the ceiling for a hanging potrack, install blackout curtains so that I could sleep later than 6 am in the summer, and otherwise make the house over more to my specifications. But the owners are fond of their home the way it is, so it stays.”
Having been a homeowner for 7 years now, I get the allure of renting now more than ever. I bought my house in Fayetteville right before the market really took off, 2002. It’s appreciated $20-25/sq ft, and has held its value. But I’ve never stop putting money in it. It was built in the late 80s, so upgrades were necessary, and I’ve put probably $20,000 in the kitchen alone. Changed the floors too, although insurance paid for much of that thanks to a water leak.
If I can talk the wife into it, when the kids are gone I want to find a blend between renting and owning a home. I’m imagining a condo where I can still call the landlord to fix broke stuff. She is, as you may imagine, not all that enthused about having the future grandkids to our penthouse condo for Christmas. She lacks imagination.