Quote:
Originally Posted by redpoint5
The buy vs rent conundrum depends on many factors, but the general rule of thumb is that buying is the better financial choice if one plans to live there at least 5 years. Less than 5 years, and renting usually pencils out better (due to closing costs and realtor fees when buying).
Subletting rooms tends to be more appropriate for single people. That said, I maintained 2 roommates for the 3 years following my marriage, but no kids at that time. I'm still open to renting rooms now that I have 2 kids as we don't need all 5 bedrooms and 3 bathrooms. We hardly ever go downstairs as it is. Renting the 3 rooms out down there would easily cover the entire cost of this (in my opinion) extravagant house.
Some rental agreements prohibit subletting.
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It seems to me that if I can earn 7% in the stock market I would be better off doing that, but that's my circumstances.
If I buy a 2 bedroom condo that also binds me to no subletting for the first 8 years for $300,000, I'd be spending well over $1,000 more per month than lot rent here for a 2 bedroom trailer on a rented lot. In 30 years the price of the condo will be about $500,000 if it goes up 2% per year on average. But at current interest rates I will have spent over $700,000 in those 30 years meaning I'd have only saved some of that money, not earned anything, unless the kids move out after 8 years and the wife and I can rent the other room to someone to put towards the mortgage.
But if I put that more than $1,000 per month towards the stock market and earn 7% per year on average then after 30 years I'd have over $1 million but will have spent the same $700,000 on both rent and investment. However, here I can't sublet the other room. There's also the question if lot rent won't go up past $1,000 per month in those 30 years.