I rent a single-family home on the same street that I previously owned. My PITI was $1950 with a good loan. My rent is $1300. The houses are the same from a livability point of view. I’m $6600 a year ahead, NOT counting maintenance costs and accruals.

I think most homeowners are fooling themselves about the financial aspects of it, and it is really just the only way that they can save—it’s sort of a forced savings, and even then only as long as there is appreciation. With ANY depreciation, renting is the hands-down winner.

If I am willing to pay in rent for a home similar to what I can buy, AND I invest the difference instead of spending it, I will be able to live in the same neighborhood and it is my contention that I will win financially every time. I will gladly trade this comfort for the “comfort” of calling it my own.

I think it’s crazy that an “investment” with a long-term annualized return of 3-4% BEFORE COSTS is even considered as an investment. That rate of return on any financial instrument would be considered very poor–tax free bonds do better!

I agree that having a landlord sell under you is a hassle, and has a moving cost associated with it as well as the more intangible costs, but the right deal with the right landlord should minimize potential for this.

1. The price of houses in California is going to drop more than the rent I will pay
2. There are much more expenses of owning a home other than the mortgage payments.
3. I’m not sure I want to stay where I am long term yet.

Of course, reason #1 might be a big “if” so we will see whether my decision was financially correct or not. As I see it, houses in my area (orange county, CA) will be depreciating for the next few years.

I’ve lived in several places as a renter which I loved and had no intention of leaving when I was single. Unfortunately, in all 3 cases the landlord sold the place out from under me and I was forced to move. This was when I was single.

Now married, with two kids I wouldn’t even think of renting anywhere unless I absolutely had to. I’ve owned my house now for 6 years and as much as I hate having to take care of everything myself instead of calling the landlord, it beats being kicked out on a periodic basis. My only house regret is buying a bigger house than I needed. I find the more stuff I own, the less time I have. I don’t own all the crap I have, it owns me.

Either way, I think you made the right decision to buy. It is nice to have a place to call your own, and it is great to build equity.

Glad the numbers still make sense (perhaps even more so than before!). The “apples to apples” piece is key. The slight twist is that you would have been willing to live in a (much less nice) apartment for $1100. But none the less, you would have *rented* there. On the other side, knowing you, I sincerely doubt you would have rented a place as nice as your current place because it would cost you ~2k/month! Hence, the rub (certainly not specific to you).

We’re willing to buy nicer places than we rent, even though it costs us because we’ll *own* it (duh). Renting is temporary and the mentality is “it’s not mine” so it isn’t a reflection of of ourselves. Hence, saving money out weighs having a nice place (especially if you don’t have kids).

But for us we had more money as a renter, but this is due to us buying to big. When the house is paid off, I will have a pretty valuable asset.