[USER]

Should I rent or buy? I currently rent and pay around $1K/month in a high cost of living area. My landlord doesn’t want to honor his lease and getting any repairs done is always a high level of effort with him.

I also have a pet and given most places don’t allow animals, moving to another apartment would be difficult.

It is unlikely that I will move anywhere since I’ve rented the same place for over 5 years.

I am considering buying a single family home but the mortgage would take at least half of my take home pay since homes here start around $700K and interest rates are 6.5%.

I do have $1M in savings since I am a good saver.

I am wondering, should I consider buying because I have a good nest egg to fall back on if I get laid off or should I continue renting and saving aggressively to look towards early retirement?

It took me about 15 years of aggressive saving to save the $1M.

[Skippy]

Buy a duplex and rent the other half out.

[Darrell]

$1,000 a month in rent is not high cost of living. I’m almost that high in property taxes each month.

And just to help you out almost everybody ends up paying more when they first buy a home then they were renting for.

When I bought my house I was paying double what my rent was. But then a few years ago by lol and all of a sudden I realized that my house payment is less than I could rent an apartment for.

My house payment stays the same, but apartment rents go up every year. And I have my own place, and it’s going up in value.

My homes increase in value is on par with my financial investments over the years.

[Steve]

Where do you want to retire? That’s where you buy a house.
(But at $1k/month for rent in a HCoL area, I wouldn’t be in a hurry, that’s not even property taxes in a lot of places.)

[Trina]

Buy a foreclosure or a house that needs serious updating. That will be your best value and you can sell for a quick profit in 2 years and probably no capital gains tax, rinse and repeat until you have 2 million saved with a paid off house, then retire and do what you want with the rest of your life!

[Scott]

I would put the amount down on the home out of your 1m that gets your monthly pay mentioned to 25% of your gross salary.

That way you will own a home that appreciates in value with enough room in your budget to continue to save and invest.

So, for a 700k home it may look like 400k down with a 300k mortgage

[Kicy]

How old are you? I ask bc 30 with 1mill is way different then 50 with 1mill

[Randy]

Your State and local governments are about to open the flood gates on small lot, small home, high density zoning codes in order to combat the home affordability crisis.

800-1000 sf detached homes and duplexes on 35 foot wide lots thathey claim will be in the “attainable” range <read market value>.. This is going to do 3 things:

1. Lower the price of entry level housing options.
2. Boost developer profits
3. Destroy the local transportation network

All this to say, you might consider waiting it out a couple years. The risk is that inflation is expected to return in 2026 (no matter who gets elected) and interest rates start to climb again.

I’m talking 800sf homes on tiny lots served by alley sized streets selling for $350k+ with HOA dues and metro district fees where I live in N Colorado.

Disgraceful honestly but it’s the only way young people will be able to get into home ownership.

Don’t expect these small homes to appreciate in value much though. They won’t be a good investment.

[Gonzalo]

I have rented, and I have owned. In my opinion, do the math first. Remember that if you buy that your housing expenses won’t just be your mortgage.

There are multiple rent vs. buy calculators online.

I live in a very high cost-of-living area; and when I did the math, it was a better financial decision to rent.

But it’s not just a financial decision.

I had to weigh the financial against the psychological…and everyone’s situation is different.

[Jonathan]

Just keep renting where you are. If the landlord is lazy and doesn’t respond quickly regarding repairs at $1k month rent just pay for the repairs out of pocket if they are not major Why move

[Anil]

I would recommend thinking about buying a house as a lifestyle choice more than as a financial choice. If you go strictly by the numbers, renting is easily the better option.

Even if you rent a similar SFH that you plan to buy and invest the difference, you’ll likely come out ahead.

However, owning a home gives you the opportunity to shape the place/property to your own style, something that’s hard to do while renting.

If you feel this is important for you, go ahead and buy. It also gives you stability to plan your life around.

[Vicki]

Where do you live that you can’t buy a single family home for under $700k that seems crazy.

[Matthew]

It sounds like you answered your own question. You clearly just want to buy.

The better option would be to just get another apartment at the sane rate and continue saving if possible since $1000 a month is a great rate compared to what the mortgage would be, however what I would suggest is take some of those savings and put a big enough down-payment to where it is under a third of your income or just pay in full so you don’t have a mortgage at all.

If you’re going to buy a house, you don’t want to be house poor or in debt if possible.

[Mark]

Buy a good home. Invest the rest . You will achieve more in investing than savings.

I retired 2022 through this means

[Jaime]

For relatively low rent in a high cost of living area you could hire a specialist to some problems within the unit.

[Author]

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