The Instigator
NSG
Pro (for)
Winning
30 Points
The Contender
WaximusMaximus
Con (against)
Losing
24 Points

Better to rent a house than to buy a house

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Voting Style: Open Point System: 7 Point
Started: 12/26/2007 Category: Miscellaneous
Updated: 9 years ago Status: Voting Period
Viewed: 2,929 times Debate No: 1017
Debate Rounds (3)
Comments (17)
Votes (18)

 

NSG

Pro

I believe it is better to rent a house than to buy a house.

At first I disagree with the statement, I have always thought it is always better to own a house than to rent one, especially the market is going down now. However, after weighing the opportunity cost ,analyzing on the current market, and calculating on the possible save/loss, I realize there is a tightrope that must be walked before picking a side to fall in.

The debate will be beneficial to both sides, it will also help everyone on their future decision making.
WaximusMaximus

Con

The root of this argument depends obviously depends upon the financial situation of the party involved. While I am not in a position to consider buying or renting a house for some time I would contend that over the long run purchasing a house in ultimately more beneficial. Due to the question I am operating on the assumption that the property is bought and paid for.

Dollars and cents aside lets consider the pros of owning a house:
1. You are free to make any alterations to the property as long as they are legal.
2. If you truly OWN your house versus have a loan out on the property then you have an asset that will generally not devalue.
3. While it is true that renting allows your mind to be freed from repair work owning the home allows you to know exactly what work as been done and by whom. It also allows you to pick the plumber, electrician, ect. of your choice.

I freely admit that the basis of my argument rests on the idea of a home owned for a substantial amount of time. If your situation is fluid or unstable there are certainly better options than owning property.
Debate Round No. 1
NSG

Pro

Hello, WaximusMaximus,

You mentioned it does depend on individual's current financial capability. Right, the lack of stability of the job market in the dot com boom, the real estate bubble, and other sectors has proved that most people's jobs are NOT safe. Our rising poverty issues also show that financial freedom is not something the young American is born into either.
It is difficult for most of us to be certain about our financial capability on the high amount of monthly mortgage payment. That's why I say it's better not a buy a house.

When you're making over thirty percent return on your investment, life is great. However when foreclosure notices start to go up nowadays,everyone starts selling and nobody is buying houses anymore, and when things get so bad the president has to deal with the idea of a federal bailout, the reality of life has a way of "crashing" down on you.

The fact is that the freedom of ownership is only as real as the ability to sell in current market conditions. Most homeowners, it is safe to say, are heavily tied to their homes. They upgraded, maybe counted in the tax savings to justify the higher per month costs. But your home can't keep your income stable and secure and it can't control the market, you would think that if you add a glass door, enlarge your deck, remodel your basement, you will have a win-win on selling it the next time, not necessarily, as I have mentioned, you can't control the market.

The opportunity cost of being able to pick your own plumber, electrician is much higher. What might cost $1000 a month to rent, may very easily cost $2000 a month to own. Especially once you consider items like property tax and HOA fees. At the end of the year, if you would have saved $4,000 in taxes paid to the government, but paid $12,000 more. You lost $8,000 dollars. Owning a house did not save you any money on your taxes at all.
WaximusMaximus

Con

NSG,
First of all I admit this is a difficult topic to argue and you're giving me a run for my money.

I also admit bias on my part of the argument due to my situation. I live in northern Minnesota and rurally to boot. The national foreclosure crisis has hardly hit the community.

The market on a national level has tanked. However, we're still dealing with home ownership in dollar and cents terms. If you are currently secure in your home you at least have a place to sleep at night. If you evaluate home ownership as an investment, like "flipping" homes for example, then you certainly stand to lose from owning. I would also like to point out the fact that many people buy beyond their means. Mortgaged to the hilt is not a wise financial situation to place oneself in.

Your opportunity cost argument is interesting but I would argue that either doing the work yourself or working with a professional will, in the long run be the best choice. You know that the work has been done properly and will not have to be done again for some time.

As far as the taxes are concerned I'd like to know where you're going with that. Landlords usually make a profit, even after taxes.
Debate Round No. 2
NSG

Pro

This is probably one of the biggest benefits to owning a house-tax deduction most of the money paid in the first years of a mortgage, are interest, and interest is tax deductible. Other items such as Private Mortgage Insurance can also be tax deductible. But first, what is the difference in payment between your mortgage payment and the cost to rent a similar house? In the 2007 market, this could be almost 200%. As I have mentioned, what might cost $1,000 a month to rent, may very easily cost $2,000 a month to own. Especially once you consider items like property tax and HOA fees. At the end of the year, if you would have saved $4,000 in taxes paid to the government, but paid $12,000 more. You lost $8,000 dollars. Owning a house did not save you any money on your taxes at all.
The landlord is making a profit, hence, he must pay for the property tax and the rental income tax. If I am renting a house, I don't need to pay for any of these, and if anything that breaks, he will have to find a way to fix them. The landlord is sure making a profit, but compared with the profit that mortgage company makes, you will be very thankful that you choose to rent. The total amount a mortgage company charges can add up to 3 times of the original price of a house after 30 years, while the amount you pay to a landlord will never exceed that.

That's a good idea to do the work yourself or working with a professional will, again, I like to weigh the opportunity cost of me calling a plumber or me fixing the electricity-it will be higher b/c the time I spend on doing this, I can spend to do my work, which pays more than paying a electrician. And the time I have wasted on seeking an ideal one, I can save it towards to my work or investment to generate more revenue for myself. Time is money. I'd rather let the landlord takes care of this.

Btw, "I live in northern Minnesota and rurally to boot. The national foreclosure crisis has hardly hit the community." Congrats, that is a good thing for you.:)
WaximusMaximus

Con

I will concede the point to you that it is currently a poor time to sell a house.

I would contend that the root of your view stems from the fact that many people buy beyond their means. If you are silly enough to enter into anything other than a fixed-rate mortgage in which you know your costs and you budget to cover those costs. You return to the same dilemma with renting, you can't rent over your means. In the case of a fixed-rate mortgage you are slowing buying property you will own, with all of the perks therein, versus paying and paying for no further stake.

The equity in your home also offers a safety net for any financial calamity that should come your way.

As I've said I'm more inclined to own property over rent it. Owning the property gives me the ability to make any alterations to it. I have no experience with HOA's so I cannot comment on the expense. When owning any property I would avoid any legally binding agreements on your property. You don't know what you're getting into.

As I stated in my first post owning or renting is based strictly on your means. I would still stress that if you have the means for both and owning is a viable option that owning, with it's legal freedom and equity safety net is worth any additional expense.

Thank you. If you'd like to pick another topic I would be more than happy to debate a person of you caliber again.
Debate Round No. 3
17 comments have been posted on this debate. Showing 1 through 10 records.
Posted by sadolite 9 years ago
sadolite
d4L said it all, iresponsible people don't own houses
Posted by sadolite 9 years ago
sadolite
Renters as rule pay more for their housing expense's because the person who owns the house is renting it out for more than what the mortgage payment is.
Posted by d4l 9 years ago
d4l
When you rent a house soon you will have to pay up the amount of a mortgage of a house you do not own real detail buy a house save money pay your bills don't go out partying.
Posted by spinaltap 9 years ago
spinaltap
This debate is somewhat pointless. The decision to rent or buy is based on the financial situation of the person doing the renting or buying.

NSG - Your financial caluations do not take into account the tax deduction allowed for loan interest. You mentioned it but curiously didn't employ it in your calculations. You also neglected to calculate asset appreciation or depreciation - depending on where you live. Some neighborhoods in San Francisco are experiencing growth while others are losing value.

I'm guessing that English isn't your first language so I give you props for making a good effort.
Posted by Checkmate 9 years ago
Checkmate
NSG,

1) In your "I Believe" section of your profile, you can some it up in two simple words: Specialization of Labor, and The Invisible Hand.

2) "Wise persons learn by others' mistakes, fools by their own"

This is the most arrogant quote I have ever seen, surely you don't believe in it. Brilliant, Wise, Knowledgeable, and Successful people have all learned from their own mistakes at critical point in their life.

With Regards,

Checkmate
Posted by Checkmate 9 years ago
Checkmate
Dear NSG,

"New-Home Sales Hit 12-Yr. Low" (Investor's Business Daily, Monday Dec 21).

This is one of the best times for a buyer to take advantage of the current panic and depressed home prices on the market.

NSG, what university did you attend?
Posted by kels1123 9 years ago
kels1123
NSG , It actually is a good time to buy a house as the market is down , it is not a good time to sell a house. As long as you get a fixed mortgage , you can buy a home for a good price and eventually the market will climb again and your investment will pay off.
Posted by roman.legion 9 years ago
roman.legion
I hate it when people tell me to wait for my spirits to get crushed. I never said it would be easy. I just said it would be worth while. And the fact that its difficult only makes it more so.

Just because things don't happen like they should doesn't mean they shouldn't be that way.
Posted by BrianFranklin 9 years ago
BrianFranklin
Hey, Kid! Once you have got a real job you'll realize how tough it is to afford a house.
That's why I hate to see kids talking like they know it!
Posted by roman.legion 9 years ago
roman.legion
There is more benefit in life than just the financial. You are clearly, intelligent though, and I'm rather picky (I like to think I'm unique). I joined this site yesterday, and I haven't gotten into someone else's debate yet.
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