So often I hear people almost apologize as they admit they are renters. Perhaps that is because they know most people hear the word renter and visualize this:
I refuse to apologize; I am a proud renter! But perhaps that is because I know rentals can look like this:
If we bought our house when we moved to Nevada instead of renting, we would have paid at least $1100.00 more per month in house payments, several thousand a year in property taxes, and paid more for home owner’s insurance. We would also now be upside down in a loan, which would negatively impact our plans to move next year.
Soon after my husband and I married, we started receiving pressure to buy a house from family and friends. That pressure has steadily increased in the 21 years that we have been married. Friends didn’t understand why we chose to live in base housing rather than buy a house out in town. The main reason we didn’t buy a house is because I didn’t want to get stuck in some of the places we were assigned (90 degrees and 90 percent humidity with a chance of alligators is not my idea of paradise). And when my husband had orders to places that we liked, they were always too short to warrant buying a house. (The Navy allowed us to provide our children with many field trip opportunities by moving us cross-country 3 times in less than 2 years).
When we first made plans to move to Nevada, we seriously considered buying a house because we knew we would be staying for at least 5 years. But once we arrived and looked around, we could not figure out why anybody thought the houses were worth as much as they were asking (our only reasonable answer was that everybody must be on drugs). Instead of hanging our heads in shame that we were still renters, or succumbing to the pressure to buy a house before prices went up even more, we sent the following Christmas letter to our family and friends. Warning: I am a lot more obnoxious in real life and my husband is insufferable (I asked my daughter if I could print that and she said, “Yeah, I don’t think Dad reads your blog”). Our Christmas letter went out with a PG-13 warning for drug references and thematic elements. You’ve been warned!
Excerpts From Our Christmas Newsletter- 2005
Remember last year, when we were certain we would change our address as we purchased a plot of Nevada salt upon which to build a house? Well, in the intervening year, real estate speculators transformed Nevada, in the marijuana-addled id of hopeful California investors, from a desert into beachfront property without the inconvenience of an ocean. Nevada property values became more obscene than a Las Vegas family show. Unfortunately, we cannot afford to spend $600K on a 1 acre parcel of sand (and glass) on a former nuclear test site. Thus we are still renting the same small house. We did learn to translate the enthusiastic gushing of the realty sections of Nevada newspapers into reality, and we share that with you this Christmas to save you the trouble we had in understanding Nevada real estate newspeak. Keep in mind that Nevada is a desert [ETA: the italics mean my husband channels Sam Kinison and screams the word desert], and a popular one with prospectors, gamblers, smokers [ETA: In 2007 the voters banned smoking in most public places, which means you no longer have to walk through a cloud of smoke to pick up your asthma medicine at CVS], amateur chemists, nuclear physicists, and people who wish to live like slobs without incurring the wrath of the neighborhood association. Always be on your guard when offered Nevada “investment” property.
[Edited to remove all of the stuff about our children that you would find boring; our family and friends were not so lucky.]
And now, for your holiday enjoyment, and our little attempt to bring Nevada real estate prices back to reality, we offer you the…
Nevada Real Estate Newspeak Translator
“A quiet neighborhood” – the neighbors are all incarcerated.
“Custom home” – the previous owners converted the master bedroom from a crystal meth lab into an indoor kennel.
“Needs a little TLC” – a bulldozer.
“Needs TLC” – a thermonuclear weapon.
“River view” – near an irrigation and flood control ditch. You can get West Nile virus but you can’t get flood insurance.
“Easy access to BLM” – drunken hunters on ATVs in your backyard at 2 AM.
“Great starter home” – you’ll recognize it by the crescent moon carved in the door.
“Bring your horses” – it’s the only way you can reach the house.
“Investment property” – we hope you are dumb enough to buy it without seeing it.
“Well cared for” – most of the livestock manure remained outside the house.
“Historic home” – of ill repute.
“Access to electric power” – high tension wires bisect the property.
“Pump and septic as is” – a little cholera never hurt anyone.
“Water has been tested”– and it has a measurable half-life.
“Several good building spots” – mercury contaminates all the rest.
“Great for kids” – they’ll love playing on our radioactive mine tailings.
“Great for alfalfa” – nothing else can grow here.
“Great view” – of Nevada (see figure 1)
Figure 1. Great View (of Nevada)
My husband likes to take credit for bursting the housing bubble, but he also likes to take credit for convincing Donald Rumsfeld to resign (you actually have to be on our Christmas list to hear that story).
House prices have fallen significantly and instead of congratulating us for avoiding a financial disaster, family and friends are once again pressuring us to buy a house. I tell them that although it might look like a good time to buy, it is not the right time for us.
Factors that will NOT influence my decision to buy a house:
1. I will not buy a house to gain a tax deduction. I realize our country is built on our common abhorrence of taxation, however, I refuse to make an unwise financial decision for my family simply to save on my taxes.
2. I will not buy a house because I (or my parents) want to say I am home owner. Even though you get the privilege of paying home owner’s insurance, you do not actually own the home until it is paid for, until then you live in a bank owned home (Unfortunately too many of my neighbors are learning this the hard way).
3. I will not buy a house upon the advice of anybody who has any stake in the real estate market. As the markets were collapsing, there were real estate pundits who were predicting a brief dip and a quick rebound.
4. I will not buy a house as an investment. I want to live in a home, not an investment.
5. I will not buy a home because it has a “master retreat” with an Olympic size pool for a bathtub.
Factors I will consider when deciding to buy a house:
1. Are the house prices low enough, that the cost of buying a home is advantageous to renting? Click here for a rent vs. buy calculator.
2. Can I put enough down, so that even if the price dips, I will not be upside down in a loan? Click here for an amortization calculator.
3. Do I plan to live in the home for more than 3 years?
4. If I have to move and I am unable to sell, can I afford to pay the difference between what I would receive in rent and the actual house payment?
5. Have most other buyers left the market? If you haven’t guessed by now, I am a serious contrarian!
As much as I would like to settle down, buy a house, and live happily ever after, I have to admit that renting works for us. It has allowed my husband to pursue his career without having to worry about selling our house if he accepts the next promotion. Renting has made it easy for us to move to a new home to meet the changing needs of our family. And it has allowed us to try out different homes so we now know exactly what we want in our “forever home”.
Note: We have been blessed to rent some fantastic homes, but I have not resided in either of the homes pictured above. Sadly, each of the bullets in the Nevada Real Estate Newspeak Translator is based on a home or property that we visited.
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Lisa says
I enjoyed reading this post. I came across your blog via the non consumer advocate. You are very wise. One word of advice, buy a home when you are ready and be weird–put 100% down.
Lisa
Candace says
I just found your blog and really love it! This post made me laugh. My husband was in the Marine Corps and unfortunately we purchased a small townhome (we were fresh out of high school with our daughter). Long story short…We couldn’t sell in time and couldn’t rent out so we had to take a hit with a forclosure. Luckily we moved back to our small town and found a great house (bigger too!) for less than what we were paying. The family we rent from understood our situation and thankfully rented out to us even with our not pretty credit.
I love this house more than the one we owned. Love your post!
Michelle @ Simplify, Live, Love says
You crack me up! We also moved around with the military (AF) for 10+ years before making the decision to leave it all behind. We made the decision to buy or rent separately each time, based on a myriad of factors. I’m glad to report that we never lost money in home transactions while we were in the military. For the most part, our home purchases always fit your category of Needs TLC or Needs a little TLC. Because we are stupid enough to buy homes that should not be saved, we are always working…:-) Anyhow, just wanted to say this post cracked me up.
Lana says
I don’t understand the stigma attached to the word “renting”. I come from Europe, where a lot of people I know are renting, living great lives and receiving the acceptance of family and friends.
We lost the house we bough in Ohio when my husband lost his job, and now we are renting. I wish I had some dirt to play with, but otherwise I am quite content.
Thanks, Alea, for writing this post and making me smile all the time (your newsletter was FUNNY!)
Swathi says
Nice article, Alea, if you move frequently, then buying a home is not good idea. Here in Houston, we bought house because we have to pay same as renting a home.
vickie says
I love this!
A home is priceless- a house is (used to be) an investment.
WilderMiss says
Preach sister! I'm also on what I like to call the "rent and be rich" plan. LOVE the calculator you produced. Funny timing, I actually just ran the numbers on that scenario for myself the other day. Like a sucker I did not look for an online calculator first (doh!).
So so soooo agree with you. While I'll say that I"ve been fortunate to have great renting situations so far, I just love the freedom it affords me. And I love that I don't have to pay 6% interest in order to make an "investment" month after month. I'll take my low fee index funds instead, thanks.
Hiptobeme says
Your real estate terms are spot on! I live in an area that is grossly over priced as well, these made me smirk!
Katrina says
I like your interpretations – I have certainly lived next to an historic house at one time (and to be honest that was a similar way to the way the rental agency described it)
Struggler says
Love the 'TLC' and 'Well cared for' definitions!
I bought my first "home" (a tiny London flat) aged 25, above all because I had a massive nesting instinct (nesting, not breeding, incidentally). I was lucky; I tripled my money in 7 years.
Our second purchase is currently worth less than we paid for it, but that's OK because we love living there and hope never to move. In both cases, emotion and love of the place involved were much bigger drivers than finances or speculative gambling. And we're super lucky that a large down-payment (from fore-mentioned tiny London pad) has taken a lot of the pressure off the size of the loan.
I agree with you completely, people should buy houses as homes, not some way to leverage debt to make money. And knowing you will, and want to, stay in the town long term is a huge part of that.
Jennifer says
Great reasons for renting! The biggest mistake we made was buying our home when I was in the Air Force. At the time, the market was great, but you can guess the end of the story. We tried to sell on and off between renters for almost four years–not very easy since I had become a stay-at-home mom!
Thanks for visiting my blog yesterday! I'm enjoying yours!
The Saved Quarter says
This post is fantastic! I, too, thought it was hysterical.
The tax deduction argument doesn't hold water for me, either. Why would I pay a dollar to get $.30 back in taxes (assuming a 30% tax rate)?
We live in the Silicon Valley, not known for its inexpensive real estate, and there is no way that we could afford a "great starter home" that "needs TLC" in the neighborhood in which we rent. I have heard that your house should cost no more than 3 times your annual income; the three bedroom suburban house across the street, built in 1940 and without a whole lot of upgrades, sold for over a million dollars recently. We aren't making $300k a year!
We're fortunate to live in a great neighborhood, renting from a family member, so we kind of get the best of both worlds: a house we can paint without a mortgage, and a landlord to take care of clogged pipes or leaky roofs. I'll keep it!
PERMANENT POSIES says
I have never lived nor even visited Nevada but I thought that was hysterical. You should only buy a house if you want to do so. There….free advice that I would give my own children. Be strong girl! Loved the post. Found it on Twitter….in case you were wondering.
Angela says
Great post Alea. And very wise of you to rent instead of own, given the fact that your husband transfers all the time and that home prices were so high a few years ago.
We saw how crazy people got even in L.A. – paying way too much for crappy homes. A crappy home is never a good idea!
I really appreciated the humor of the Nevada real estate market lingo.
Laura says
I LOVE this post!
We lived in base housing the entire time my husband was in the navy, for many of the same reasons you outlined, but mainly because it saved us money, and we moved every 2.5 years.
We lived in the first home we bought for 10 years; we were fortunate to sell at the height of the real estate bubble and made quite a bit of money. The people who bought it from us were not so lucky; they were transferred after three years and barely broke even. My sister and husband bought at the height of the bubble and are currently WAY underwater with their mortgage, so are stuck even though they desperately want to move.
Our current home is a plain Jane, nothing fancy place that we bought because of it's nearness to our girl's elementary school and because it was cheap. We'll have lived in it for six years when we probably put it up for sale next year, and it has thankfully appreciated in value.
For the record, after all these years of owning I am kind of looking forward to not being responsible for all the maintenance home ownership entails. I also think we will save a bundle over what we pay now.
Milehimama says
We're renters too, after 13 years of marriage. We've been in this house for 2 years, and just signed a lease for a 3rd which is a total fluke for us! We usually move every 12-18 months for my husband's job – it never made sense to buy a house.
Annie Jones says
There are many valid reasons for renting. Each person/family has to take their own needs into consideration above all else. Glad you aren't caving to the pressure…you'll know when/if the time is right to buy.
Sheila says
I love this post! You have such a way with words. Thanks for sharing.
Melissa says
This is a truly excellent post! You make a great point in a very funny, creative way. Thank you!