Thanks, appreciate that :) We love Denmark and generally come for a few weeks every summer anyway. Stayed in Blokhus last time.

I had a look at the student org in Trondheim and the avg price for a 3 room apartment up there is 13000 NOK a month ($2100). DKK and NOK is about even at the moment. With students coming in I doubt you'll find anything decent atm :/

Rent for now and wait 6 months, if values goes up your still in time to buy. If it goes down, wait longer. Its simple. For now i would WAIT!

As one poster said, you're not really buying the house, literally. How many people ever really finish paying for a house before they move out? Same with a car, also.

Cool, if you are ever on Sjælland we could meet up and have a beer and a chat. You're also welcome to drop by for a barbecue at my house if the weather is up to it :pimp

We don't need a student apartment, 3 bedroom is more than he needs - but now I know the pricerange, thanks! :thumbsup

Car: 25-35% loss of value the minute you drive off the dealer's lot, worth zero after a few years.
House: depreciates or appreciates slowly, still worth lots after a lifetime.

Buying a house is nothing like buying a car. One is an investment, the other is an expenditure.

I don't think you are looking at it properly at all. Buying is ALWAYS going to be better than renting. Why rent somewhere for $1,000 a month say as opposed to putting $1,000 into your own place?

I moved to Canada 2 years ago and bought a house, some people said I was an idiot and should have rented since I wasn't sure I'd be here more than 3-5 years. Last week my neighbour just sold her house for 30% more than I paid for mine. I'm easily up 20% in just under 2 years, probably more as my house is much better than hers.

The areas of Florida I'm most familiar with are Ft Myers/Cape Coral and Tampa. You can still find a lot of homes with a square foot cost below what the materials alone sell for. I'm talking $50 per ft range.

That being said if she puts down at least 25% and has financing pre approved there's nothing wrong with making low ball offers until someone accepts. This is a buyers market make sure she is a smart buyer.

The biggest negatives I see are personal ones. If she's young will she want to move around to different cities or be tied down to one location for years. The other is most marriages end in divorce ...... Either one then makes her a seller in a buyers market.

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Oy. This stuff makes my head hurt when I think about buying. I think I'll just be saving my money without any intent to buy for the next few years... At least by the time things level off, I'll be able to throw down a huge chunk if not the whole thing. I wish Toronto real estate wasn't so expensive. I envy the US in that respect.

It's a great time to buy especially because interest rates are so low. Also remeber interest and property taxes are both tax deductible. Personally I would get her to wait until she can put 20% down, interest rates aren't going up anytime soon

I'm a little skeptical about the math of ~7% depreciation a year, maybe in the short term but you don't buy a house for the short term.

As a landlord I love reading how Americans are scared to buy and think renting is the best way to go.

Home prices and mortgage rates are at historic lows, if there was any time to buy this is it! Why pay off the property for someone else?

Last house I bought I rented back to the previous owner. They have 4 kids in 3 different schools all within a couple miles of the house. He signed a multi-year lease because he dreads having to move, their lives are entrenched in the community.

I paid $101k for the house and collect $1000 a month rent, which is at least $200 under market but I'm helping a struggling hard working honest family. They will be there for the next 10 years and will pay off the house for me and then some.

Care to tell me how renting beats buying? Their mistake was buying at a high and spending more than they should have, so many family's got caught up in that.

Doesn't it really simply depend on if it's "just another investment idea" versus "I need a place to live"?

The phrase "buy low" comes to mind also. When is a better time to buy.. when the value goes up and the interest rates on loans go up right along with them? I guess if you have a crystal ball then theres no need to ask (not that anyone was asking).

1. You know that old saying "buy low", well the housing market is at it's low right now. Sure, it might go lower - but not so much it's going to be a big difference than where it is now.

2. By renting they're throwing that money away anyway. So just compare how much they're currently throwing away each year and it's pretty easy to figure out if it's worth it and how much house they can afford.

3. 5% down? WTF? I always thought you wanted at LEAST 10%, but 20% is the best (or more if you can afford it).

Actually 0% down would make even more business sense. Seeing as you build equity with every payment you make on the house, as opposed to paying rent to live elsewhere IN ADDITION to saving up for the down-payment.

I believe it is extremely smart to purchase a house right now, I just did.

a) The market has never been in the buyers favor as it is now. When going to the bidding table, you can easily find a seller who needs to sell ASAP -- getting the deal of a life time.
b) I just closed on my house with a 3.7% 30 yr fixed rate -- $100 down. ... beating a 3.7% rate would be a miracle.
c) While it takes a while to find the home you want, being picky can land an awesome deal. I just closed on the home, after doing minor work ($3000-$5000) my appraisal will jump almost 20,000$

All in all, buy a house. If you are a seller, just hang on to the house, lol.

In TODAYS market renting beats buying if the owner isn't going to be in the same location for an extended period of time.

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Not even close. If you buy a house, live in it for one year and then sell it and move, you'd probably still lose less than the money you pissed away on rent during that time. Assuming, of course, that prices keep going down, but there's no huge real estate crash.

Yes i think its a good idea to buy a house instead of putting money into somebody elses pocket by renting a property, at least when you buy your investing in something for yourself and house prices rise and fall all the time even if it takes 10 years to make a profit by selling or upgrading/ downgrading to another house

Sorta kinda, depends on the location. If you are buying in a depressed market then you should buy regardless, then when you are ready to move just rent it out. Odds are you'll get more in rent than your payments depending on what you put down and what the interest rates are.

As for the crystal ball comments, no one knows where the housing market will go, just like the stock market.

BUT look at the cost per sq. ft. on the house you want to buy, in many cities you can find newer (10 years old or newer) homes for under $80 a sq ft. Well under the cost to rebuild which is about $150/ sq ft on average. Hard to go wrong when you are buying a place at 50% of what it costs to rebuild

I have lived in 4 houses in the last 7 years no way I would be ahead of the game if I had purchased instead of renting. And who knows what house I would still be stuck in if it didn't sell when I was ready to move. Closing costs, real estate commissions, minor repairs, I just don't see it if you aren't there for at least X amount of years.

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shouldn't that be telling you something else then?

tell her to buy a house at no more than 70% of the current value, plenty of deals on foreclosures, plenty of deals for refinance deals. All you have to do is to find the right mortgage company and have a team full of real estate agents sniffing out deals for you and you will save an insane amount, so that takes away your depreciation worries. Then if you wanted to go further you'd find 3 or 4 more and do the same thing and rent them out and live off the cash flow. You have any idea how much you can save on taxes when you own rental property?

if you're not making money in real estate? it's because you are playing the speculation game and not really an investor at all.

perfect example of how to make money in real estate :thumbsup

It's a bad idea for her to buy the house... but if you buy the house for her then :pimp

its so crazy to see the difference between the canadian and american real estate market. prices here just go up and up and up for the past 10 years or so. i'm sure they'll come down at some point but i don't see any signs yet.

I own a home, I know how Mortgages work. Even if 50% is repayment and 50% interest, you still come out ahead, especially if you are in it for the long term. Granted, I don't know much about the areas Choker is talking about so your second point is probably very valid. I guess I'm pretty lucky then where I am.

I'm surprised you didn't steer her towards one of those underground bunker houses. On a serious note I saw a couple of nice houses coming up for sale in the next sheriff's tax sale.

My thoughts exactly. If she has a stable job and she believes she has bulletproof job security and wants to raise a family in that house (good school district or near private schools) buying makes sense. HOWEVER, if she could change jobs, be transferred, would not raise kids in that house or send them to school there, she should rent. Unless you pay cash for the house, you are just renting it from the bank and it severely ties you down unless you want to become a landlord. I sold my condo in 08 for a decent gain (bought in 03) and I would never buy a place again until I decide that is where I will be for 10+ years. :2 cents:

Quick! Tell her to buy here and make 20%!

http://www.neighborhoodscout.com/fl/fort-myers/rates/

It's on the internet so it must be true.

This is what I tried telling her. Depreciation here accelerated last quarter and the economy is looking worse overall, not better. I was going to buy a $500k house back in 2007. Today that house is worth maybe 300k. People here posting that they would buy a house, and I appreciate everyones feedback, but the stats don't lie. Homes are going down in value here in Florida with no signs of stopping. When I do the math it simply makes no sense to buy right now. $7000 a year depreciation on a 100k house. No matter how I run the numbers renting is better.

Buying is great if you get the right deal. Unfortunately, too many don't wait for the right deal, don't know it when they see it, or simply buy into something they can not afford.

Your math is flawed Choker... You don't buy a house to sell it in 2 years... A minimum of 5 is the accepted norm and most stay for 12. So that being said the market will be right back where it should be and she will make a killer profit. If she waits until the market is completely rebounded the rates won't be as low on the loan and the house might not be available at the current price.

Agreed. Buying a house is an emotional purchase and that's why so many people don't look at all the number they just look at the monthly cost, very similar to when they lease a car.

For one's main residence I see it as you're either paying off your house or someone else's.

exactly, plus you get that great deal sooner if you have a dozen + agents looking for you as opposed to just having 1... make them do the work.

paying full market for a home these days is ridiculous.

When interest and taxes cost more than rent would cost on the same place you would be stupid to buy.

I am in no hurry to buy

I moved to Fort Lauderdale a year ago and EVERYONE I've met who owns a house is upside down on it. Everywhere you turn. It's un-fucking-believable.
I know 7 people who have declared or are declaring bankruptcy and walking away from it all. All are people over 40, some over 60 who are destroying their credit to get out of it.
You work all your life to build great credit and now its ashes.

I know 1 guy who was a multi millionaire from flipping real estate and is now millions in debt and has severe depression over it. Big drinker now and pretty reckless.

I know another guy who bought a home a few years ago for $1.1 mil and its now worth like $550k. He told me they estimate it will take over 12 years before it gets back to what he paid for it.

My landlord bought the apartment I'm living in now for $176k a few years ago, now I'd say its worth like $70k. Since its just a 1 bedroom they appreciate slow it will take forever for him to get that back.

I know someone in Boston bought a condo in 2007 in a terrific neighborhood for $199k and we all thought it was a steal for this neighborhood. Today he's selling it and getting $150's for it and had to wait months to get that offer. He's going to rent now.

No thank you, I'm fine renting and in no hurry to buy.

Unless you find a really killer deal or you plan on owning that house a minimum of 10 years I say rent.

Compare apples to apples, renting or buying a $200k house for example, with 10-20% down your interest on the balance and taxes won't be that high, to rent the same house would cost you about the same.

Landlords don't lose money every month for a reason. Taxes, interest, hoa, etc etc are all factored into the rent.

If you move around all the time then sure renting makes sense, for those staying 5+ years the buying is usually the better choice.

How much you buy the house for is irrelevant. If your taxes + insurance = more $ per month than rent would be you are not only taking a risk but paying more than you should for a home. This has nothing to do with principal payment or how much you put down.

If you think this doesn't ever happen then you are either pulling numbers out of your ass or don't have the slightest clue what you are talking about. Probably both. Just because you haven't seen it happen doesn't mean it hasn't.

I assume you meant interest not insurance as you need insurance for a rental or purchase.

So $200k home with 20% down = $160k your mortgage @ 3% = $647/ mo
Property taxes are roughly 1% a year so $2k/ year = $167/ mo

Monthly payment: $813 / mo
With zero down: $1010 / mo

Rent on the same house would be $1300+ easily.

Factor in mortgage interest in the US is tax deductible and 40% of the monthly payment is going towards principal, I don't see how renting works out cheaper.

No need to be rude. I have a cash flow analysis template that I use when evaluating a potential investment property.

I know my numbers and have a few rental properties, so I'm not talking out of my ass.

Buy if it's going to be your only home.

But if the economy does stay depressed, a bottom could still be a very long way off.

Economic Collapse For Dummies

its crazy to keep renting when you can buy

It's still good to buy a house if you know how to shop, and you can afford it. Just tell her to look around for depreciated houses or houses that have been foreclosed on and owned by the bank. If you can do it, lend her the they money to buy the house cash instead of borrowing the money from the bank, or, lend her enough for a large down payment. The less she has to mortgage and the faster she can pay it off, the better off she will be.

There is a whole lot of misinformation in this thread. I really hope no one takes any real estate advice from reading GFY.

Solid advice. :thumbsup

Renting is a no-win situation no matter what.

On top of the math you pointed out above - you're also at the mercy of a landlord who may not do the upkeep, routine maintenance, upgrades, etc. Which leaves you as a miserable tenant.

In that case the payment is lower than the rent. That obviously works out in the buyers favor and has nothing to do with what I said. Let me quote myself again.

Your thinking is flawed unless she somehow found a bank that loans money with no interest rate. The $1,000 payment goes towards mostly interest. Even if it was 3% interest she would still only pay $60k against principal in 10 years. That's with a payment of $1054.

I haven't read most of this thread so I don't know if this has already been stated , but there are parts of the US where buying a house can still be a good investment. There are towns in the US that are going through these crazy oil booms where oil companies and workers are moving in en masse, and there aren't nearly enough rentals to house all of the workers. The result is apartment complexes that would normally charge $300 a month for a one bedroom are now charging over $1000 a month, and the house rental rates are just obscene. It's getting so bad you can't rent a hotel room in any of these towns, and hotels that aren't even finished being built are sold out over a year in advance.

A few examples are Bismarck, ND, Fargo, ND, Odessa, Tx, Eagle Ford, Tx, and the Mid Ohio Valley/West Virginia region (which is actually a natural gas boom). There is so little housing in Eagle Ford, Tx that these huge RV parks are popping up where thousands of workers are resorting to living in mini campers. My expedited freight company delivers a lot of mechanical supplies to Bismarck, ND and it's impossible to even get a hotel room there. As for the Mid Ohio Valley region the natural gas boom is just taking off and I've been looking at buying some mobile homes there and renting them out to oil field workers, as you can buy a mobile home in the $15,000 range and rent it out for $700 a month minimum. Pretty crazy, but keep in mind the risk is in how long the workers end up staying there. I know in Eagle Ford, Tx they are finding crazy amounts of shale oil reserves and the workers will be there for decades...

Knocking $60k off the mortgage or giving a landlord $120k and have nothing after 10 years, I know what I'd rather do.

To help make your point and that of choker we can rewind to 2006ish when so many bought homes and over the next 5 years lost way more than what they paid off. BUT many bought homes they couldn't afford in the first place with no money down, so really they lost their monthly payment and really should have rented.

Those who bought homes they loved and could afford are still in them, they go about their life, pay their mortgage and when they go to sell down the road odds are prices will be back to at least the cost to rebuild. Sure they spent the last 10 years spinning their wheels, but they have some equity built up.

Most Realtors are full of shit and uneducated A-types. Stay the hell away from them :2 cents:

Buying a house is a very bad idea.....

especially if you're the type that gets divorced a lot. :(