Buy, Rent, or Rent-To-Buy?

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Today, I got some bad news... Or, it is maybe good news? For now, let us just call it news... I got an SMS from the real-estate agency where I pay my monthly rent that the landlord wants to raise the rent... Again...

I live in the same apartment for almost a decade, and everything was fine until a bit before this pandemic thing... Just before we got hit by that, my monthly rent was raised by 10%... And now, after maybe 2 years, I got news of additional 10% raise... Well, I'm not some economic expert, but raising the rent in the middle (or maybe just the beginning) of the biggest financial crisis doesn't look like a wise move... Anyways, I don't plan to accept it!


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Firstly, I understand that the landlord can ask whatever it wants, as the property is his, but I find this move dirty and very greedy, as it comes in the worst possible situation... It's not that I can't pay the rent, it is just a matter of principle... The apartment isn't bigger than 50-60 square meters, it's in a building that is 20 years old, but for some reason, everyone finds it "very valuable"...

The problem is in the subjective point of view about the town where I live, and about the real-estate value here... The whole town is built 50 years ago in the place which was an orange plantation, and it had a lot of foreign investors (mostly Norwegian and Dutch) who have invested billions in the market... The town had its peak 15-20 years ago, just before the big real-estate economic crisis... After that, a lot of families were ruined as they had loans for overpriced homes, the complete market was shaken for a year or two...

But, that didn't last too long... The real-estate market recovered and prices skyrocketed again... My landlord wasn't happy too much as he made a contract with me before "mooning", but the idea of raising the rent was still there... So, at the moment, nobody knows where will the real-estate market go... If you ask local agencies, they are all "surprised" how people offer "little" money for the apartments that in "their eyes" are worth 200-250K EUR!!! Yes, the apartment where I live is "valued" as such, with only 50 sqm... Like, WTF?!

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As I said, the problem is in "riding a wave"... All these real-estate agencies were living a dream 2-3 decades ago, but a lot of things have changed... Yes, the town had its BOOM time... But, you can't ride the wave forever... You can't milk the same cow for 50 years and not find another one, or a younger one... Yes, we have a sea view, beach... But hey, there are other towns on the seaside!

History repeats itself very often... Sometimes, scarily often... So, I think that what happened with this town 40-50 years ago, will happen in some other place, some other orange plantation soon... The new shiny object will pop up and investors will run there to build as they will have more profits to make... It's always about that...

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What will I do? Currently, I am checking my options... We were connected with this town because of our friends and my son's elementary school, but we don't have those bonds anymore, so we will move to another place probably... The only question is will we go for renting or buying our next home... Luckily, crypto has opened both options, but both have their pros and cons... I will take my time with this decision... Maybe it is a good thing that this happened as it is maybe a time to change certain things and this can be just a slight push into the right direction...

What do you think about real-estate prices? Do you rent or live in your own home? What's the better solution from your point of view? I would like to hear your opinion in the comment section...

Thank you for your valuable time,

~ph~

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Well I don't know I'm supposed to say this because we actually get help paying our rent here from the program but I can see that landlords are about the same all over the world. We're on a fixed income and the rent is actually more or just a little bit left in our actual intake. But yeah they're talking all over here in the US as people are keep raising rents there's always something about someone trying to get help our landlord just send text messages if someone needs help paying rent to where to go and get help but you know it's overwhelming you think I'm talking to the phone bedroom it doesn't matter how many people in your household you pay $60 extra for water
Which way I'm sure we do not use that much but anyway yeah can relate. Electricity is in the water or not considered expense so they're not deducted from our expenses for help pay rent they used to be a long time ago also you have to make three times the rent in order to even have a place to live because I got homeless because they wanted to raise the rent 25 and I lost my kids and stayed homeless for 9 years so this really hurts and excuse my life up really bad and I'm talking too much and I just shut up and if you wonder why panic so much I'm talking to the phone so I hope that is not saying something stupid take care of Phil hope everything works out well and I just said things I have never told anyone

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I feel you Man
Where are you from?
am from Nigeria, and believe me! Nigerians understand this dilemma, you guys are facing but if we are in the position you are in right now.... hmmm many of us will be happy.

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(Edited)

America 1986 when that happened. First husband abandoned us. I was blacklist from renting 1 week old and 1 year . special .am tried. We are all alive that I know. We've been okay when it comes to now and but in that word send this stuff we need help paying rent but we don't but and so far I haven't seen anybody be evicted will move out but there's tons of homeless camps and people downtown more than ever I wish I'm not there right now it is huge so I say I live in Portland

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That's the word " we are all living" but God will not leave us like this for forever
He has a plan and it's on motion don't worry will get out of this mess😉
Let's all just stay positive 😁🙏

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but I can see that landlords are about the same all over the world.

Well, yes... The landlords are the same all around the world... There are some positive examples, but usually, most of them are living in their own world... The most important thing is that they are paid and that occasionally they can raise the rent...

When you rent here, you pay for all things separately... So, we have fixed renting price + we pay our electricity bills + water bills + communal bills... So, it adds up a lot...

Thanks for the comment and your time!

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It's a tough question. I would say rent would probably a good idea first since you don't want to live in an area you find unbearable. Once you buy the home, you might not be able to get out since liquidation and processes take time. If you like the area and really feel you want to live there, then you can buy it.

At worst if you believe in the value of houses, you can buy a house and rent out the rest of the rooms to pay off some of the costs. But honestly I just think that right now is probably not the right time to buy a house when supply is so low and everyone is looking for them in full demand. In a few years if 3D printing takes place, you might be able to get a place for cheaper.

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It's a tough question. I would say rent would probably a good idea first since you don't want to live in an area you find unbearable.

That is one of my biggest concerns... If you buy a home in a crazy neighborhood, you are screwed... lol... THere is an option which I put in the title, the rent-to-buy thing... The idea is that you deposit some money at the beginning, live in the home for 2-3 years, paying monthly rent, and then if you like, you can buy the home...

The only problem is that usually, in the end, you pay more than the regular price of the real estate is... And also, if you decide to NOT buy it, you don't get your deposit back...

So, I still have a couple of months to think about it... I will take my time... ;)

Thanks for the comment! Appreciate it!

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Your post was promoted by @jfang003

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I rent. Buying is a bad idea for a few reasons in my opinion.

  • we are in a bubble with housing. It might go higher but will end up having a big pullback.

  • technology is going to change the future cost to build. People getting into 30 years mortgages might have an asset that costs a heap load more than what future building might cost.

  • we are seeing a popping of the artificial urban real estate bubble. This could have huge impacts on prices as people are freer to live where they want and still find sustenance.

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Well, I do agree with you on certain points, but both of us can be wrong... The bubble is already here, I agree... I was following very closely how it was with the first one, and recovery was depending a lot from place to place... and the "location" was (again) one of the major facts involved... So, in my specific area, the prices went down, banks got bailed, they bought real-estates with a huge discount, and the prices relatively fast came back where they were...

Banks still have a big % of real estate in their hands, and they are "releasing" them slow enough that they can "control" the offer/demand on the market... I know that the same thing will be hard to repeat, but you can buy a lot of things when you have a money printer on your side... So, they don't have a need to sell that real estate... That is something that is worrying me the most... We saw how long they are able to "fake numbers" and cover their shit...

But, in general, I do agree with your point of view... It's just the feeling that we can expect everything completely unlogical, as we have seen crazy stuff going around... Everything is possible... lol...

Thanks for your opinion! Appreciate it!

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I have my own apartment and one I have given for rent. Currently, here in India, the rental market has hit a lot and it's like flats/apartments are vacant. My tenant approached me last month to reduce the rent and considering the situation coz. of this pandemic primarily I agreed to reduce the rent by 20%.

If you can afford to buy a house, then you should definitely go for buying your dream house - that would be my suggestion. cheers

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Thanks for the comment!

As I can see you have both options covered, so that's a great thing... And it was nice of you that you did that to your tenant... These are very challenging times and a lot of people are struggling financially... And that will probably be even worse in the next couple of months/years...

Will see about my options in the next months, and try to not rush the thing... That is the most important as buying a house isn't like buying a new cellphone... :)

Appreciate your time, my friend! Thanks!

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!PIZZA
!BEER
for you

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Thanks! Always appreciate your support!

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I believe it's also a matter of preference if both options are available to you. I used to stay in a rented apartment when I was at the university and shortly after. Somehow I don't like the idea of regularly having rent to pay, on top of other expenses. And of that depending having a roof over my head or not. So yeah, I'm an owner type of guy. I own a house, and luckily don't have any mortgage for it. I paid it in full at purchase time.

But I know people who are happy to rent and who feel more free this way.

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Agree with you that it's a personal preference... AsI have lived 3/4 of my life closer to you, in Balkans, there was a strong preference of owning your home... I didn't know anyone who was renting, except when I was in University....

But, on the other side, living in Spain for 10 years, I have noticed that most of people rent here... So it is good to know both sides from the first person...

I will take my time with final decision.... Thanks for the comment!

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I can associate with your situation. We also rented the property where we lived until a month ago.

It is a very nice area, but we had no support from the landlord in maintaining the property. If we wanted any maintenance to be done, we ended up doing most of it ourselves unless we were willing to put up with some arguments in cases where we insisted on his involvement.

Two years ago we even got attacked inside the house as we had an increase in the crime rate. Yet, still, nothing got done to improve the security and our safety.

This is where it was to our benefit to only be renting. Although it was also delayed until now due to the outbreak of the pandemic, we could now pack our stuff to move to a new place.

If security becomes a risk in a certain area and you own the property, that would not be so easy to do.

I think there are pros and cons to both sides though. Difficult to make a general statement without having all the detail. Every situation might be different with different things to consider.

I totally understand that you are unhappy ( I would have felt the same way), but all the best in making the right decision that will be the best for you.

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I have to admit that I was very hot-headed when I wrote the post as it happened that day and I was furious... :) And what you said is actually one of my biggest concerns about buying a property... I mean, I know the area and it's more-less safe enough, but you never know your future neighbours until you move in... I had yesterday talk with my friend exactly on that topic and he said something that I always forget...

I know that buying a home isn't buying a bike, or a car, and somehow, my thinking is that I'm buying it for "the rest of my life", but that doesn't have to be like that... In this area there is a lot of buying/selling, so, in the end, I can sell it relatively fast (of course, depends on lot of things, but speaking in general)...

Anyways, now that I'm a bit calmed down, I'm thinking more clearly, and will take my time with the decision... We will leave current home 90%, as we have already planned that before... But, we will see about renting or buying... Maybe it's still not the right moment for buy... There is a lot of uncertainty in the world atm...

Thanks for the comment and help! Appreciate it!

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!PIZZA

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