Your opinion: Better to rent or own (house) as a career I.T. guy?

With these general principles in mind that may or may not always be applicable:

You may be working for your current employer for 3 - 5 years, then find no room to move up or grow within the company
Your company may close down
There may or may not be another employer in your city that can give you *at least* your current level of responsibility and pay similar to your current position
Dealing with landlords really sucks
Being a homeowner can limit your ability to accept a new position away from your current city (you might not be able to sell your home)
If you are able to sell your home, moving out of a house that you own to move to another city is more complicated than moving out of a house that you are renting.
The size of your family may also weigh into your decision.

Do you prefer to rent or own? Why and where do you see yourself in 5 years? If you have a mortgage do you consider yourself a "company man"? (No, there's nothing wrong with that if you're happy with your employer).

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Comments

hex_omega

There's no way I could afford to own a house (taxes, upkeep, etc.) with the money I make right now (< 30K).

And also, for one of the reasons you stated, I don't want to commit to the area I am in right now because I have been seriously thinking about relocation(IT sucks around here). The hard part is finding a job in an area BEFORE moving there. It's damn near impossible for someone of my experience level.

ehnde

hex_omega wrote: »

There's no way I could afford to own a house (taxes, upkeep, etc.) with the money I make right now (< 30K).

And also, for one of the reasons you stated, I don't want to commit to the area I am in right now because I have been seriously thinking about relocation(IT sucks around here). The hard part is finding a job in an area BEFORE moving there. It's damn near impossible for someone of my experience level.

I think your job search would go better if you shift your perspective from I want to move to xyz, so I'll search for jobs in xyz to I want a better, higher paying job, so I'll search on a national level and see what is available.

Seen it too many times on TechExams! Instead of saying "I want to move to Plano, TX..." say to yourself, "OK, I did a thorough job search and have found 42 jobs I feel qualified for that pay more than I'm making now - those jobs are in these locations: x, y, z...so these are possible places I may live".

Hope you find what you're looking for. Tough to make it on less than 30k!

higherho

Currently I am renting but I would not buy a house around here. The area is a great community and a lot of local activities but the amount of IT jobs here is slim. I would need to travel 30 to 60 miles to find anything great if I left my current job.

Now If I lived near a city or I'm living in the subburbs of a city then I would buy a house just because I know I can find a job much easier than I can here.

The only sucky thing is the Student loans =/ They do hold me back on how great my house can be! Though when my Wife gets a good job it will be much easier.

SteveO86

I own a house.. I guess I never really looked at it that way.. Since I'm 30-40 minutes away from Tampa, FL finding a job has never been hard for me..
(Of course I rarely move between jobs)

IT jobs are everywhere, every business runs off computers and requires people like us to maintain them.

rwmidl

SteveO86 wrote: »

I own a house.. I guess I never really looked at it that way.. Since I'm 30-40 minutes away from Tampa, FL finding a job has never been hard for me..
(Of course I rarely move between jobs)

IT jobs are everywhere, every business runs off computers and requires people like us to maintain them.

I own, and I have owned for the past 10 or so years. When I was moving around a lot, I did rent an apartment, but once I settled on a location I bought.

xenodamus

I've lived in the same town since I started kindergarten. Both my family and my wife's live within 10 minutes of the location as well. Because of those factors, we decided to buy a home and stay within the local job market. We drive a little longer to work that people who live in the metro area, but it's worth it to be close to our families. It's taken some strategy to move up the ranks and finally land a network engineering position without leaving rural Mississippi, but I finally did it. I'm not totally opposed to moving, but it would take a substantial increase in pay/benefits for us to leave the state.

mattlee09

Curious that this should come up - It's been on my mind lately as something I may have to deal with.

I'm ~ an hour south of DFW, and that's most likely where I'll end up when I get ready to move from desktop support to any networking position. I'm also currently at around $30k, and while I suspect that would get quite a bit more in TX than other places, still not too comfortable.

I think I'll probably continue to live with my parents and drive the hour from here to DFW for 6 months or a year, hopefully will have made enough money to close the gap on getting a house only ~30 mins away, so I'll be in the middle of these two. I'm glad I don't have a family that relies on me yet, that definitely complicates things. Guess I'm also fortunate that DFW is only an hour from where I grew up, whereas some people (xenodamus out of rural MS) might be 3-4 hours away from similar job opportunities that would require a full 'uprooting'.

Hypntick

I'm a total renter. I have yet to live anywhere in my life that has made me say "yes i'd be happy here for the next 20-30 years". I was raised military and moved around a good bit, usually after 2-3 years I need a change or I get antsy. My wife on the other hand, born and raised here in town. There have been some interesting discussions, however she does agree owning a house in this area doesn't appeal to her either.

shaqazoolu

I own a house. I bought it before I was in security and the market for security jobs around here is pretty awful. It doesn't really matter right now though because I wouldn't move yet anyway. My family lives here and I don't want to move any further away than I already am. One day, I will end up having to leave, but I'm not worried about when that may be. I'll cross that bridge when I come to it. I do okay and a little bit of misery is worth being able to see my family almost whenever I want.

instant000

Do you prefer to rent or own?

Rent

Why and where do you see yourself in 5 years?

Why? $$$ (see below for more explanation). In 5 years, I see myself still renting, unless I'm married at that time, and emotions come into the picture.

If you have a mortgage do you consider yourself a "company man"? (No, there's nothing wrong with that if you're happy with your employer).

This doesn't apply to me. Company man? LOL. This is one of my favorite lines: "At will employment is a two-way street." Execs/managers/HR always look nervous when I tell them that.

======================

As far as owning or renting, I rent right now, as my annual rent is less than annual taxes in this area

. The cost of ownership is pretty high, if you add taxes into the equation (some people only think the mortgage, without also considering those property taxes).

Can go online and get the property tax rates paid by addresses, even by name, so at a past job, I looked up the worths of the houses of the executives, as well as some coworkers, and their annual property tax was greater than my annual rent, so it's been an no-brainer for me so far.

I keep telling myself that I'm going to buy houses and rent them out to others, but I haven't been able to devise a good plan for it, as I don't see how I could be successful at it, unless I put a lot of time into it, and I don't want to do that.

^^^ If anyone on this forum has legitimate ideas (and documented results) doing this, I'm interested.

Since I couldn't do the property thing (or at least, imagine that I can't) I have tried the personal loan website thing for now. As I've been doing this for only ten months, I can't give long term results on how that works out, but short term, it has out-performed my 401K. (Though my 401K did pretty good from '08 to '10, when everything came back, just seems to have mellowed out this year.) I was only able to try out Prosper and LendingClub, and so far, LendingClub has been better for me. Prosper offers more risk, it seems, so if you're willing to go for it, you can probably do better overall there, if you play the odds.

If the loan thing keeps performing well, I'll keep rolling with this in addition to 401K, if only because I don't want all my chips in the same bag.

But, I'm guessing financial planning wasn't the point of this thread? Or was it? I think the decision to own or rent is a financial decision, that can be weighed upon by emotions, such as desires to raise children in a house. Considering that, I'd only buy a house if I could rent it out for more than I'm spending to buy, upkeep, and pay taxes.

N2IT

Renting until my fiancee and I are established.

She has 2 years of nursing ahead and then 2 more years of anesthesia school.

I will need anywhere from 2-4 years at the management level to get truly established. Currently I have 1 years of senior team lead experience.

Goals I need to accomplish:

Getting my core finance and accounting courses out of the way
CAPM - PMP
2-4 years of management experience
ITIL V3 Expert

When we get to that place we will be ready to purchase our home and become settled in. This education train is starting to wear on me.
If I can get those I will be exactly where I want to be, need to be, should be.

lordy

The question I am missing here is "Can you afford to buy?".

Quite often it's not a question of wanting to buy or rent but being able to afford to buy. Financial planing is key here and it always seems to me that a lot of people don't handle that too well.

GOZCU

I always prefer to be the owner of a house. I am now student and studying the Computer Science. I don't like to pay rent for someone else's house. 10 years later? what do i have ? nothing.... I bought a field and started to build my own house.... will be ready next year...

alan2308

Own. It's not like I'm going to pack up and move cross country with a wife and kids anyway.

tpatt100

I own but I bought my house at the peak of the housing market and if I were to sell now I would be looking at around 70-90K drop in price which means no way in heck could I sell since I do not have enough equity to break even.

I think it depends on where you live now is the best reason to rent or buy. When we picked the neighborhood we live in now I wanted to locate myself an hour away in every direction to a city with a decent population due to potential jobs in case I lose mine. Its worked to my advantage. My last house I only had opportunities an hour in one direction lol.

I think now a days mobility is important especially for younger people. I used to work with a guy who could not find work after our contract ended and a few of us told him "dude your 26, not married, no kids, no debt. The country is a big place shoot for what ever. When he opened up his online resume to "relocation possible" he got a job in DC.

bigmantenor

ehnde wrote: »

Do you prefer to rent or own? Why and where do you see yourself in 5 years? If you have a mortgage do you consider yourself a "company man"? (No, there's nothing wrong with that if you're happy with your employer).

Rent all the way. Several reasons why:

1. I come from the Dave Ramsey school of thought, in which "debt is dumb". I do not agree with everything he says, but for the most part I follow basically what he would do. I know you earn equity when you own a house, but you also pay a TON of interest over the life of the loan. If you have a 30 year loan, MOST of your money is actually paying off the interest, not the principal; this is especially true for the first 15 years of the loan.

2. Renting is cheaper. If I rent a decent apartment for $900 a month, and if the house payment for the house I would want is $1200 a month (this is all hypothetical), I just made an extra $300 a month by choosing to rent over buying. This $300 could go towards retirement, my investment portfolio, savings/rainy day fund, etc.

3. I don't have to cut my own grass

. There is less upkeep involved with renting than owning. If something is wrong in my apartment, I just contact the office and they take care of it.

4. With renting, if you decide you hate your apartment/neighbors/whatever, you can get out once the lease is up and live somewhere different. It also makes relocation a hell of a lot easier.

5. Perks. I have my own gym membership, but sometimes I just want to go hit 30 minutes on a treadmill, and I'll go to the complex gym. I'm not a huge fan of swimming, but my fiancee loves it, and she has basically her own pool right outside our front door.

In the end, I say to each his own. There are most definitely perks to home ownership, and not everything about renting is great, but it is definitely where I will be staying for the foreseeable future. In 5 years, I see myself married, with a lot more certs/knowledge, better pay, and a ton of money piled up to take care of my family. I'm not a "company man", but I am a family man and I believe in taking care of your own.

Turgon

bigmantenor wrote: »

Rent all the way. Several reasons why:
2. Renting is cheaper. If I rent a decent apartment for $900 a month, and if the house payment for the house I would want is $1200 a month (this is all hypothetical), I just made an extra $300 a month by choosing to rent over buying. This $300 could go towards retirement, my investment portfolio, savings/rainy day fund, etc.

3. I don't have to cut my own grass . There is less upkeep involved with renting than owning. If something is wrong in my apartment, I just contact the office and they take care of it.

Yes but the money you pay on renting is lost. With a mortgage each day you own more of the place and have something to sell in the longterm. As for retirement, in the UK at least home ownership is seen in some quarters as a better option than a pension pot. Sell up when the kids move out and downsize. Keep your winnings.

I rented in London once and it was an obligation to keep the garden tidy.

never2late

Turgon wrote: »

Yes but the money you pay on renting is lost. With a mortgage each day you own more of the place and have something to sell in the longterm. As for retirement, in the UK at least home ownership is seen in some quarters as a better option than a pension pot. Sell up when the kids move out and downsize. Keep your winnings.

I rented in London once and it was an obligation to keep the garden tidy.

Own. I have owned several homes over the last 20 plus years and would not rent. I have roots in this area and never plan to move away. The cost of renting is the same as owning and there is a plethora of home choices right now. I agree with Turgon, own now and when the retirement years arrive you have a nice little nest egg in equity Then downsize to a condo with a golf course and get a small dog. No yard work, community amenities, and only one spare room for visitors. Limits the opportunity for the kids to move back in.

demonfurbie

ive owned and rented and i gotta say i like renting better.

for me its all about the maintance, for us it was morgage + 300 or so in maintance every month.

Now that the housing market is ... well... crap and we need to sell we lost 30k on a 90k home (what we paid) its not like rent is tossing moneys away at that point.

with renting there are no maintance costs, and ease of movement if one of us gets a great job else where.

lastly i know every one says ill live here for 30 years so ill just buy, unless you are getting a farm in the middle of nowere how do you know what the neigborhood will be like in 30 years, if it goes bad and you want to get out will you be able to sell your house?

CCIEWANNABE

depends. If you plan on staying in the area for a long time, then yes I would buy. Right now you are going to get close to 4.5%, which is just crazy. My realtor was saying about 10 years ago the interest rate for bank home mortgages was over 10%. So yeah, I would definitely look into buying if you think you'll be around the area for a while.

If not, I would definitely rent. On that note, my current house just sold and we are closing on it and our new house at the end of August. So yeah, pretty stressful times, but its worth it IMO. I will be about 30 miles from work, but it will be a very easy drive with little or no traffic at all. Sometimes you have to drive out a little to have some peace and quiet

Forsaken_GA

Financially speaking, ownership is better than renting. Renting is lost money, ownership allows you to potentially recoup your costs, and can provide a good return on investment. When it comes to land, it's usually a safe investment because, well, they're not making any more of it.

With that being said - if you're going to be in the house for less than 5 years, you're probably better off renting. If you sell after, say, 3 years, the closing costs will put you into the negative on the investment. If you're moving out, you could always keep it and rent it rather than sell at a loss, but long distance land lording is something that typically doesn't work out very well, and hiring a property management company is just another sink in your investment returns, so better to divest yourself of it and buy in the new place if you're going to be there for any length of time.

I've personally been holding off buying a house until after I pass my CCIE. While I'll likely be able to stay in the Atlanta area, there's no guarantee, so I've chosen to rent for the short term to avoid the financial hassle that moving may bring.

Forsaken_GA

bigmantenor wrote: »

2. Renting is cheaper. If I rent a decent apartment for $900 a month, and if the house payment for the house I would want is $1200 a month (this is all hypothetical), I just made an extra $300 a month by choosing to rent over buying. This $300 could go towards retirement, my investment portfolio, savings/rainy day fund, etc.

Don't take this the wrong way, but this is a huge logical fallacy, and I have to call you on it. You are not saving $300 a month by choosing to rent. That $900 is gone. The difference between rent is the difference between consumption and investment.

While the entire $1200 does not equal instant equity, the amount you lose per month to things like taxes and interest is not going to equal 75% of the payment (which is what $900 would be). In most circumstances, you will see a return on that $1200, and if the term is long enough, it'll almost always be a positive one. At $900 a month, you are losing nearly $11,000 a year, multiply that by say 15 years, and you've lost well over $150,000. But hey, by choosing to rent, you've had an extra 54,000 (300 a month) to invest. Assuming you got a 12% rate of return, that'd equal about $150,000, which means you just about broke even with the money you threw away on rent. Me? I'd rather have the $150,000+ asset

Forsaken_GA

And the other part I forgot to mention in that, is that at some point, you stop paying mortgage payments, logically. Of course you can keep selling and upgrading in house to keep paying mortgage payments, but if you're smart, at some point that ends, usually when you retire.

Take a 30 year period. Assuming you take a 30 year mortgage, after 30 years, the house is paid for, and you have the full amount per month to invest. If you continue to rent, you continually do *not* have that amount of money to invest, so you continue to throw away money.

The one argument rent has for it is convenience. You're not generally responsible for maintenance, and depending on what you're renting, you may not be responsible for general upkeep, such as the lawn. But that convenience comes at a premium, it's not a value added service that your landlord tacks on. If you chose to rent, you're doing 1 of 2 things - Either paying someone else's mortgage, or growing someone else's net worth.

You can rationalize renting as being a good idea all you want, but from a purely mathematical standpoint, it's a bad idea.

Forsaken_GA

instant000 wrote: »

Since I couldn't do the property thing (or at least, imagine that I can't) I have tried the personal loan website thing for now. As I've been doing this for only ten months, I can't give long term results on how that works out, but short term, it has out-performed my 401K. (Though my 401K did pretty good from '08 to '10, when everything came back, just seems to have mellowed out this year.) I was only able to try out Prosper and LendingClub, and so far, LendingClub has been better for me. Prosper offers more risk, it seems, so if you're willing to go for it, you can probably do better overall there, if you play the odds.

Out of curiosity, are you fully funding a Roth IRA before you do this? If not, you may want to consider it. It's one of the best deals on the planet.

veritas_libertas

Turgon wrote: »

Yes but the money you pay on renting is lost. With a mortgage each day you own more of the place and have something to sell in the longterm. As for retirement, in the UK at least home ownership is seen in some quarters as a better option than a pension pot. Sell up when the kids move out and downsize. Keep your winnings.

I rented in London once and it was an obligation to keep the garden tidy.

Exactly! If you can, than do it. If you unable to than save. Everyone's circumstances will be different.

Also, now is a great time if you are in the financial position to buy. Bought my place last year, and it was a very good price.

Forsaken_GA

veritas_libertas wrote: »

Exactly! If you can, than do it. If you unable to than save. Everyone's circumstances will be different.

Also, now is a great time if you are in the financial position to buy. Bought my place last year, and it was a very good price.

Yup, right now, if you're in good financial health, it's a buyers market. Interest rates at record lows, in some parts of the country, real estate is essentially in a state of fire sale due to the amount of foreclosures banks have on their books, and that inventory is getting bought up at a fairly good rate. Only place for interest rates and prices to go is up.

Which is why it's been so damned hard to resist the siren call of buying myself. However, I believe it'll still be a good market for buyers in a year or so when I'm ready to purchase, probably not as good as right now, but still good enough to get a really good deal.

veritas_libertas

Forsaken_GA wrote: »

Which is why it's been so damned hard to resist the siren call of buying myself. However, I believe it'll still be a good market for buyers in a year or so when I'm ready to purchase, probably not as good as right now, but still good enough to get a really good deal.

The way things are going, you will probably get a better deal in a year anyhow.

tpatt100

Forsaken_GA wrote: »

Don't take this the wrong way, but this is a huge logical fallacy, and I have to call you on it. You are not saving $300 a month by choosing to rent. That $900 is gone. The difference between rent is the difference between consumption and investment.

While the entire $1200 does not equal instant equity, the amount you lose per month to things like taxes and interest is not going to equal 75% of the payment (which is what $900 would be). In most circumstances, you will see a return on that $1200, and if the term is long enough, it'll almost always be a positive one. At $900 a month, you are losing nearly $11,000 a year, multiply that by say 15 years, and you've lost well over $150,000. But hey, by choosing to rent, you've had an extra 54,000 (300 a month) to invest. Assuming you got a 12% rate of return, that'd equal about $150,000, which means you just about broke even with the money you threw away on rent. Me? I'd rather have the $150,000+ asset

There are plenty of things you throw away on owning a home also. Interest payments, Property taxes, association dues, maintenance, home owners insurance. I have read numerous articles where its almost break even pros and cons evenly on both sides when comparing the money spent on renting or buying. Owning a house is never an asset until its paid for because once you can no longer pay for it, bam the bank takes it back. So while a renter can save up the difference its his or hers money. Your asset which is your house will never truly be your asset until you pay for it. Or you do like plenty of people that are getting foreclosed on anyways and that is taking out a home equity loan.

SteveLord

Have a seriously nice cushion if you want a hosue. I had to replace my stove, fridge and furnace within the first year! I say if you're without wife and without kids...rent. Don't let the "pride" crap go to your head. If you're single, live with your parents for as long as you can stand it. Enjoy homecooked meals and their utilities. Just be a good kid and mow the lawn and pay at least a few hundred bucks to them monthly.

I probably would have waited for a house if my pregnant wife didn't give me an ultimatum + if I couldn't lock in a 5% rate on a VA loan like I did.

Aldur

It's all based on your current circumstance IMO.

I do miss the days of when I was first married and we were renting a place for ~400$/month. However, later on in life, when we were living in Canada for about 2 years, we rented a house for 1500$ a month... calculate that over 24 months and I "threw away" 36,000$ !!

Now, after moving back to the states, I have a house payment that is less than 1500$/month and the house is considerably larger than the one in canada.

However, we made the choice to buy because we plan on staying here for more than 5 years and the market/interest rates were too good to pass up.

Soo now about 800$ a month that is going towards the principle, and the rest if going towards taxes, insurance, etc.. not to mention the interest is tax deductible.

Also, I'm on a 15 yr note but plan on having it paid off in less than 10 yrs. Won't be easy and will require some sacrifice, but owing a house free and clear long before I retire is worth it.