Discussions

I am so tired of seeing realtors market old houses and trailers as being “cheaper than rent”! The actual mortgage payment MAY be cheaper: but what are the heating costs, lot rent/taxes, insurance, etc?!  
 
I have a friend who bought a “cheaper than rent” trailer, and while her loan payment was cheaper, she couldn’t get insurance because the trailer was so old! What was offered was a different company (I’ve never heard of before), and they wouldn’t replace her trailer if it burned-it would only be a portion-the coverage was very limited and the cost was insane! (Almost $2,000!). That certainly wouldn’t be cheaper than rent!! (Loan, lot rent, insurance-not including utilities)She was told insurance companies are not wanting old trailers anymore.  
 
I’ve heard others say similar things about their 60+ year old home purchases.  
 
Just a heads up: realtors are trying to make money. They say they have your best interest in mind, but do they really?  
 
My friend was lucky: there were things on the home inspection so she got out of the deal, thankfully.  
 
After talking to her insurance broker, she found out this information and now has a list of things to look for/avoid while she is looking for a home. Go figure, the person who isn’t making 3-7% commission has your best interest in mind.  
 
Edited by dthbysqts, 2021-06-26 07:25:50

Sounds like you’re talking about two things at once here.  
First thing, my 3-bedroom house mortgage of $440 monthly in a small town is most assuredly cheaper than the over $1k rent that the same-or-smaller house would be.  
Secondly, your issue of realtors not having people’s best interests in mind, very valid. Money is a driving force for them... and for many people on the planet. Sad but true

No one has anyone's best interest in mind other than there own when it comes to money. If you understand this going into a transaction you will probaby be better informed then the average person is when it comes to separating you from your money. I'm still waiting for somebody to prove me wrong on that fact.

I’m not talking about two different things. While the loan payment itself may be cheaper than rent, the increased costs of insurance and the utilities could certainly be higher than rent.  
 
I’m not sure what houses sell for in small towns, but even then, if you commute to Brandon daily for work you might not be a saving anything because of fuel costs.  
 
I just hope that anyone looking for a home does their homework BEFORE they buy so they don’t get stuck with something they can’t afford.

I think that your last sentence should be your first thought when going and buying anything of significant value!  
If you don't do your own research ahead of time then yes you may be in for a rude awakening.  
Most people have an idea of what they want and are looking for in a place to call home.  
Find a place or a few and start doing the math, it is pretty simple.  
Mortgage, insurance, utilities, repairs, property taxes etc should all be part of every purchase to know what you are actually going to pay! Once you know that then you should know what you can and can't afford.  
I'd also look on MLS to see houses in and around the area you want. A 200K house in Brandon might be a huge difference than a 200K house in a small town. The property tax difference alone would pay for the extra gas you will use.  
Do your own research before you start talking to a realtor! Then tell the realtor what you would like to see and have a list for them.

There's a lot of information and numbers you're omitting.  
 
When did you buy? Housing has been steadily going up over the years, so if you've been in your house for more than a couple of years, your base mortgage price may be lower than that rental owner's simply due to market condition. Also, how many years do you have left on your amortization? Rentals are often limited to shorter amortization, which increases the monthly cost while the mortgage exists.  
 
Do you pay property taxes? That is i:ncluded in the cost of rent. You will need to add that to your $440.  
 
Insurance? A landlord will have insurance that the rent will cover. You will need property insurance as part of your mortgage term. You probably also have life insurance of some kind due to mortgage, so add that in.  
 
Utilities? Is there town water and sewer, or is it wells/septic. What are the costs of that? Is it. The responsibility of the tenant in your example, or is it i:ncluded in the cost? Hydro too.  
 
And finally, maintenance. How much are you spending or setting aside for repairs and improvements? What happens if your stove breaks, or your hot water tank bursts? Who replaces your roof? You need to allocate the cost of that when looking at ownership and comparing it to rent. Renters are generally aren't responsible for any of those costs.

.....Ya relators make commission, but good ones have integrity. They are saying the truth, the mortgage is cheaper than rent. The rest is up to the home buyer to do some homework. Most of what you are talking about is public knowledge - you can look it up online. Insurance, usually you would get insurance before closing to see the cost and such, most loans would require it too.  
 
Home buyers need to take some personal responsibility and stop laying blame on others. You aren't getting hoodwinked, you didn't do research or ask questions.

If anyone is screwing property owners around it’s the monopoly of the insurance companies. Their service and coverage is notably going downhill over the last couple of years while premiums are rising dramatically. I had a senior adjuster inspect our property last year and when I received the renewal none of the information that he noted down pertaining to improvements or repairs was noted in the schedule. So now I have to record it all again to make sure that they have us covered correctly.

i owned a 3 bedroom house in brandon for 5 years. my monthly costs were:  
650 mortgage  
150 prop tax  
75 insurance  
that's 875/month  
 
when i rented it out, i charged 1200 and the tenants paid their own heat/hydro and water. so yes, owning can be cheaper than rent. if it wasnt, nobody would ever own a home. so i was pocketing about 4K per year which went toward any maintenance costs or upgrades required.  
 
plus when i sold it after 5 years, i made over 30K. when you rent, if you move out, you are left with nothing.  
 
Edited by crunchy1885, 2021-06-28 09:15:13

The biggest thing to look at is even if a house would cost you more than rent you are working towards something, it may take forever and everyone is going to want there piece of the pie(real estate, lawyers, insurance ect) but once that house is paid off then you have that equity there. You own your house, you could pay it off in time to retire, sell it, then rent and live the last of your life decent..

Kinda seems like your mad cause your friend didn’t do their due diligence when looking to buy.  
 
We’ve got an older 2+1 bedroom, 2 bath house that is in very good shape with an unattached garage. My mortgage, property tax, and home insurance is right around $1380/month. For comparison, a quick search finds Vionell has one 3 bedroom 2 bath apartment at $1350/month plus utilities. That’s pretty much a wash, but I get the equity in my house when/if we sell. Currently I’ve got about $60-80k equity in my house. When someone moves out of a rental, they get nothing.

You need to shop around for insurance. Had someone same situation was told same thing but got the insurance cheaper at a local place in Brandon.  
Unless it’s costing more if she is in a mobile home park maybe different cost for that not sure how that works.  
 
You mentioned lot rent - that’s an added expense when you don’t own your own land basically rent added on top of a mortgage.  
Friend owns the land the mobile is on in rural town outside Brandon area far cheaper then the rent in Brandon even with commuting to work 5 days a week.  
 
There are pros and cons living in the city and in a rural town just depends what a person wants in life.  
 
But for sure anyone buying should do a home inspection these days and not just older homes new ones too.  
 
Edited by Mac72, 2021-06-28 11:36:21

The landlord pays insurance for his property. When you rent you should have insurance for your property... The contents of the apartment. Your stuff.  
 
If there is a fire or a breaking and all your contents are gone.. you are out of luck(if you have no insurance). Plus it also helps cover temporary placement if there is a fire.

Anyone going into home ownership should know there are more costs related than just your mortgage - and the property detail sheets will show you the cost of the property taxes, etc. Any realtor worth their salt will advise someone of the total costs. In the end, it certainly can be cheaper - because even if you pay the same as you would for rent you are getting equity, unless you're buying something that depreciates like possibly a much older trailer home.  
 
I think it depends on the time in your life as to what your best option is. If you're young and know you're going to be sticking around I'd definitely try home ownership, whereas if you're older and retiring and want to travel and have some liquid - sell your home and live month to month for the freedom.  
 
The best part of all of this is that people gripe all the time about the cost of renting in Brandon and how greedy landlords are - but ask them to pay those same costs when buying a home and suddenly they have issues paying all that. For those that rent - who do you think pays all of those expenses??? It's a good wake up call I think for those who think rent should be lower than the cost of the expenses of a house!