Free Ebook.

Enter your email address:

Delivered by FeedBurner

« Top Money Resolutions for 2008 | Main | Save a Boatload of Money by Using Employee Discounts »

January 03, 2008


Feed You can follow this conversation by subscribing to the comment feed for this post.

I agree with you. The best choice is buy a home if you really know that you finally have to be nested. But how about an option for investment?. Thanks, very glad if you have time to view my an adsense fans...

Agree with Money and you, FMF. We bought a house 2 1/2 years ago and are already outgrowing it. In retrospect, we probably should have rented, saved the money and waited until now to buy a home that we will stay in for 20+ years. The good side is we do have some equity built up and we've gotten a lot of experience on renovating a home. Oh well, live and learn.

Agree, although with two caveats:

1. "several years" doesn't mean two

2. Your home's potential increase in value can't be your sole saving strategy. In the most recent real estate bubble, too many people confused the increase in their net worth as saving and are paying the price today.

The rule of thumb for home ownership has usually been 5 years of residency to make it worthwhile. Of course, over the past decade this number was a lot lower but with the current housing slump it's starting to look accurate again.

It's also always worth reminding people that real estate finances are very localized. A lot of these national stories might just not be relevant to you depending on where you live. E.g., Our neighborhood really hasn't seen much of a housing slump yet and I estimate our house has increased in value about 10% over the past two years.

real estate is local just like all the hack real estate people say. If its the same cost to buy as it is to rent and someone is going to be there 5 or so years then buying is the way to go.

My fiancee moved a year ago and wanted to buy a house in a specific neighborhood which was new, well-planned, had great schools, and for the area is by far the nicest place to live. It would have been a little bit of stretch financially so she rented a brand new smaller place for about 2/3 the cost of buying anything in the neighborhood. She ended up paying too much for rent due to needing to find a place quickly but still save about $800 a month over buying. Her and I have driven around the neighborhood and have kept track of the houses that have gone up for sale, time on market, and what they eventually sold for. The area went downh about 12% last year and there is even more homes for sale this winter than there was during the summer. Add in the builder finishing up the rest of the area to the tune of hundreds of houses being offered with free upgrades and its a bit of a mess. The running joke is that I saved her $50k so far on the couple of models that we may be $100k if things keep up. We're saving for a down payment at the moment and definitely aren't to confident about buying with the rent/buy ratios being so far off. Houses that are selling for $420-450k are still renting for $2k per month

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.