RENTING or BUYING?

Question

which would be my best choice? I have 35k saved up and I am either going to buy a house/townhouse/dueplex and rent it out, or I am going to buy a house that is a fixer upper and resale.

I have done my reseach for 3 years now while saving up and am almost to the point of purchase. I understand the pros and cons of both options and the risk with both options. I am just looking for some insight from people that have done one or both and can give their honest opinions

Answer 1

You have $35K to buy a fixer upper.  Do you have another $100K of fixing cost? Fixing a house is very costly depend on its condition. I mean you might not just update the kitchen and bathroom, you might have to put a new roof, plumbing, termites, etc. Most of the fixer upper come with those problems. Plus the house price is declining, even after you flip the house you will still have hard time to find a buyer.

Why don't buy a nice rental and rent it out? As long as the rent income enough to cover the mortgage payment and tax, you're in good hand. Let the tenants pay off your loan and earn equity in a long run. I think most of the ppl have problems with rental because they don't know how to recruit tenants and control them. Some slumlords only milk the money from the rental but not take good care of it or not even sign a lease with the tenants. The lease is a way to protect your rights as a landlord.

Answer 2

i think rending is better, cus even tought it doesnt belong to you, its better cus it will be less expensive (im talking about the duplex).

but when you want to buy a house it should be your own...so YOU SHOULD ONLY BUY HOUSES IN MY OPINION.

im comfusing myself a little cus im not sure if i answered this well.

oh, well.

anyways take care

Answer 3

id buy, then renovate (this might take up to 3 years) and when its finished, sell it then buy another house and do the same thing. but only do that if you can stand living in an ugly house and working hard

Answer 4

The market kida sucks right now for sellers, so a good house is going for less than half of it's original value years ago.  Some markets are better for buyers than others.  A house requires constant effort on your part to keep it up and running.  A house is always a good asset, though, so if you can buy property it's usually a solid long term investment and you can build equity and credit.

Renting is easy.  That's really the only pro is that you have no responsibility to take care of anything.  You just eat and sleep.  I'm a single father, so dealing with a house drains all my free time.  For me, the convience of renting is worth it.

Answer 5

get a duplex or a house.

don't get a condo or townhouse. Harder to sell

Answer 6

have experienced both through my parents, and marth is right about renters completely %100. so I think the best one is buying fixer uppers and doing that. thats somthing you do one time, not everytime sombody mucks up their contact and leaves all the stuff they don't want in the apartment....

BUT, with the way the economy is now- you might want to think and be sure you know what you're doing.

Answer 7

Yes, it is a very hard choice to make. BUT if you have a family, you have to ask yourself what will be better for them. If your alone you have to ask yourself the same thing. -Sry but i dont know TOO much about this but i hope i helped lol.-GOOD LUCK

Answer 8

The problem with renting right now is that a few years ago, a bunch on investors bought houses, with the same idea; buy and rent.  Well, the market crapped out and now there are TONS of investors that paid too much for their houses, can't sell them, and have rented them dirt cheap.  So all in all, this really isn't a good option right now.  I would recommend to purchase a house, take your time fixing it up, live in it while you're doing the renovations and once the market comes back, sell it off.

My husband and I have 3 houses.  2 of them we got dirt cheap and rented out right before the market crashed.  Thankfully, we have good renters and contracts.  There's no way we would buy anything to rent right now though.

Answer 9

my dad has done this many times, a renter will most likely trash the house, give you late rent, and leave you to fix the house up all over again (painting, new carpet, etc...), you should sell it then you have all the money and its over with

Answer 10

I would buy a house and resale, then with the profit buy one or two more and keep doing the same. If they don't sell fast then you can rent them. Find something close to good schools and established neighborhood that are desirable and buy right and you will do well.

Good luck.

Answer 11

In the current market resale is nearly not an option.  Due to the rising rates and flat lined equity people aren't really in the mood to buy and/or sell.  However everyone needs a place to live and rentals are a great way to do so.  I make a lot of money but have the credit of a radish so I can't get a loan.  I have a great home that I pay $1800 a month for.  Yes, I would rather put that money towards a mortgage but it isn't happening right now.  My parents have a home they bought 2 years ago, put 100,000 into it and can't sell it for 100,000 over what they bought it for.  Not only did they put that much money into it but my father was the contractor so that amount doesn't include any labor fees.  It's still for sale and no leads on it.  The other great thing about having a rental is that you can buy something that isn't the best of shape, rent it out for a while then if you do decide to fix it up and sell it later you have the option.  You don't put a lot of money into rentals because odds are that it will have to be replaced, cleaned or ripped out.  Most renters don't have the respect for someone else's home that they would if it were theirs.  (Parent's also have several rental properties so I've seen it all!)  Buy a fixer in decent condition, rent it out while saving money, kick them out in a few years, do the renovation, sell when the market is better!

EDIT:  Living in the home while you are renovating (or for at least 2 years) gets you out of paying capitol gains tax when you do sell!