Is this a crazy idea? A twist on the rent vs. buy question

[Anonymous]

Your kids will likely have to change schools several times as you bounce from rental to rental. They'll have to make new friends in every new neighborhood and school. That's crappy.

You'll probably spend at least a couple thousand dollars every time you move - movers, new window treatments, lost security deposits, etc.

If you live in a house you own, you can decorate and upgrade in a way that suits your family.

Sell your current place and buy elsewhere if you need to, but don't plan to rent for FIFTEEN years.

[Anonymous]

Being a renter has a negative stigma

[Anonymous]

In addition to what others have said, you would be giving the security and pleasure of owning the home you live in only for a higher rate of appreciation that is purely speculative. A lot can change in 15 years, both in terms of the real estate market and your own tastes.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:You'd lose out on the mortgage interest deduction.

Wrong. It's deducted from the rental income.

We did this. We rented our RH on the Hill and have been moving around enjoying life in various other parts of the US and the World, renting along the way.

You won't be able to rent the same house for 15 years, so the big downfall is that you may have to move periodically on as little as 2 months' notice.

Not exactly. So, you pay income tax on the rent you bring in. You also can usually deduct costs associated with the rental, if you are actively managing it. There is an income limit that comes into play, but i cant recall how. You also have to depreciate the rental each year.

Also, if you don't make a profit, you can't deduct your losses from ordinary income unless you're a real estate professional (i.e., have multiple rentals).

I rented at one point, and had to move three times in three years. The owners sold the houses. Finally gave up and bought so I could stay put.

[Anonymous]

OP, I don't think it's a bad idea.

[Anonymous]

Anonymous wrote:Being a renter has a negative stigma

Lol. I don't know who worries about this crap. But I assume that if OP is willing to rent, she is not someone who caters to people with this kind of opinion.

[Anonymous]

Renting is an option. It's not always a convenient option but it's an option.

[Anonymous]

If you do decide to sell and it's been more than 3 years, you will have to pay capital gains tax on your townhouse (I think). That can be huge...

[Anonymous]

Anonymous wrote:Being a renter has a negative stigma

Only to vain harpies.

[Anonymous]

Anonymous wrote:If you do decide to sell and it's been more than 3 years, you will have to pay capital gains tax on your townhouse (I think). That can be huge...

So you move back into the house, live for a year and then sell it. Right? In the meantime, you collect your rent money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Being a renter has a negative stigma

Only to vain harpies.

Ha. We've never avoided "the renters" in our neighborhood. Our kids play with them just like any of the home owners kids do. But maybe that happens in some of the more super snobby neighborhoods, although I doubt it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you do decide to sell and it's been more than 3 years, you will have to pay capital gains tax on your townhouse (I think). That can be huge...

So you move back into the house, live for a year and then sell it. Right? In the meantime, you collect your rent money.

Two years, but yes.

[Anonymous]

Hmm. Presumably, you'd be able to buy a cheaper house if you moved out to those suburbs, right? Sell the one you are in, buy something a bit cheaper in the suburbs, and invest the monthly difference. After 15 years pass you'll know where you want to be and be able to afford it.

[Anonymous]

OP here, checking back in. Thanks for the thoughts, everyone. I can assure you that I don't care a bit about the "stigma" of being a renter.

I will look into some of the practical points you've brought up, though. I don't really understand the tax implications of this decision, so I need to figure that out.

I may also have an unrealistic view of how long we'd be able to stay in most rentals. I have a couple of friends who have fallen into very long-term rentals (in the same townhouse or house for more than a decade), which may skew my view.

As for house value and appreciation, I understand that everything is speculative, but I really think where we're now located is a good bet -- we're near the potential Potomac Yard metro stop, which I believe is likely to get built eventually. I'd hate to sell right before that happens. I also just really like our place and would love to move back here someday.

In any event, this has helped me clarify my questions, so thank you.

[Anonymous]

I think it's crazy to assume you know what the real estate market will be like anywhere in 15 years and it also sounds like a huge pain to be moving around all the time and dealing with another property when you've got kids to deal with and all that comes with that. But others have already made those points.

The other thing I'd consider is that you'll be spending 15 years in an area making friends and establishing yourself there... you may not WANT to move. And even if you do, who knows where you'll want to move.