Moving is a pretty significant expense too. Unless you’re making a drastic change, moving costs could eat up all your savings. Having just moved, even the little things add up. We stayed in a 1 bedroom apartment after our 1st child was born because we knew we’d be relocating when she was ~1 year old and we didn’t want to pay to move twice. We saved a lot of money by not moving and living in a tighter space than we really needed/wanted for a year and half.

Location is a major consideration. We pay a little more to live closer to my husband’s job but in doing so we live on public transit lines and can live with only one car. So our living expenses are higher but we save on car payments & insurance and come out ahead in the end.

By “risk,” I meant specifically the risk associated with unpredictable maintenance expenses – sorry if I didn’t make that clear. Of course renting still has other risks, but so does any other housing option.

Risk isn’t entirely mitigated by being able to walk away at the end of your lease term. In better economic times, a number of my friends were forced to move because the landlord doubled the rent on their place (it was in a highly desirable downtown location). So they had to incur moving expenses because of this decision, which in many cases are non-trivial.

– Economy of scale. If I were responsible for getting my own sink fixed, I’d have to either learn how to do it myself or seek out a competent plumber. Both of those things take time, and still leave me with a significant chance of getting ripped off and/or making the problem worse. My landlord, on the other hand, is responsible for getting 15-20 people’s sinks fixed, so he already knows a plumber who can do a good job for a reasonable price.

– Simplicity of budgeting. I only have to write one check every month, and I know how much it’s going to be. Many (or even most) homeowners underestimate how much they’ll end up paying for maintenance, so they pay more for their homes than they can really afford. This is bad news for them, of course, but since it pushes all home prices up, it’s bad news for other homeowners as well.

– Mitigation of risk. I don’t have to keep extra money in my emergency fund to cover irregular maintenance costs. So I can keep more of my money in stocks and get a higher average return. Plus, if a really, really big maintenance problem pops up that my rent doesn’t cover, it’s not my problem – my landlord can’t raise my rent until next year, and if I don’t like the increase, I can move out.

Your point about the being able to move more easily is completely true, though, that is one of the major benefits of renting. The rent versus buy decision is a complex one, and there’s no “right” answer, it is very dependent on your situation and place in life.

Worst faux pas: equating house with home – not the same at all. My co-op apartment is a home, thank you very much, and I’ve been in many houses that were cold, unwelcoming and dysfunctional.

An example, I have a friend who longs for the country life, who wants to live in a small town, who desperately wants out of her marriage, but won’t move because her child is still in school. She has been putting this off for more than 7 years. Millions of kids change schools every year, and even between semesters, and while some may not like it, many benefit from it.

My husband and I downsized from a 2200 sq ft home to a 1200 sq ft rental. (same schools although this was not a consideration for us) After 18 months, we felt sure we could handle another downsize and moved to a 760 sq ft cabin. This is in Texas where housing is pretty cheap to begin with. Our house note/rental went from $1900 to $1200 to $400 a month including property taxes. We also decided to try to make do with a single car. Note that the way we handled our fear about downsizing and making do with one car was to do it in steps. When we sold our second car, we put the money aside in case we couldn’t manage with one car. But so far, no problem.

Both my husband and I (before we met) were deeply in debt. We had worked that off by the time we met. One of our rules for living together and then marrying was that we never lived in a place that would take both of us working to pay for. So we used one of our salaries (the lowest paid in our case, but it could be the average) as the basis for figuring out how much we could afford. This gave us some security in case our relationship did not work out, one of us died or became incapacitated, layoffs, or changing careers, and also allowed us to save a lot! Just food for thought.

Favorite tip: Choose a place to buy/rent that’s smaller than you originally wanted.

My apartment is “just right” sized. :-)

Housing is a complex issue even when you don’t factor in overall costs, or your income.

But income is an issue and is often tied to where you live, and whether you rent or buy. Many people only live where they do because that is where they can get work in their profession, career, etc. And commuting is not always an option. Everyone who lives in the “heart” of a city isn’t doing it because it’s hip and trendy. It may have to do with legal requirements for their job or they literally have to be available within a certain period of time. It can be complex. (Not to mention some people aren’t healthy enough to make extensive commutes.)

Buying is and always was, though people never understood it, risky in that a neighborhood could change for the worse, lose its appeal because of changes in the area or school changes, taxes going up, etc. Housing values were always theoretically subject to change. It’s only the greedy years that led some people to believe it could stay that way. And nobody has a crystal ball on how things will be. Witness the current mess. There are innocent people suffering who never imagined how much they could loose by investing in a house.

You didn’t have to be over-spending a few years ago to now find yourself with a house that is worth far, far less and now you are trapped and cannot even sell.

Location is really a key issue for most people based on where they work, how far they travel to work and activities and then a home’s proximity to local stores, etc. and to schools if they have children.

Today, whether you rent or own, you are often limited in your choices due to income.

In major cities, landlords, etc. have all sorts of formulas, etc. for how they determine if you can afford to rent. And many people no longer meet the requirements.

The solution about sharing? Not always an option because of rental rules. And those rules dictate if you can have some non-family member in your place and if you can, how much you can charge.

Do people try to get around that? Sure. Sometimes with very dire consequences, like eviction.

In many cases, even if you can legally have a roommate, the economics really don’t save all that much. Plus there is the cost to your sanity.

This idea that people are “not home very much.” Simply not the case. Most people ARE home a lot. Especially these days.

With the cost of entertainment and activities today, most people are spending more and more time at home. Cooking more. Having people over. Because they can’t afford to go out.

I have friends in their 30s and 40s who can no longer afford their apartments. After 20+ years, the increases have gotten them to a point where despite good jobs, rent is more than half of their take-home pay. Way more. In some cases, it’s closer to 75% and they are NOT in big places or luxury buildings. The cost of living continues to rise way ahead of the increases in salary.

And the space is such that they can’t share. (You think two adults that are not in a relationship can share 400 square feet and a 6 by 6 bathroom and be home every night and on weekends? Good luck on that.)

These adults are not moving back home and cannot even afford to move elsewhere if something they could afford was even available. It isn’t.

One option that many people are looking for is trying to rent from folks with big houses who desperately need the money from renting to keep their homes. And again, you have local zoning and other issues that prohibit subletting and have rules for separate apartments that most homeowners can’t meet.

So even though lots of people are looking for solutions and are willing to compromise (selling off stuff; giving it away, really streamlining; becoming a roommate or taking in one) in space and location and even sharing (try to contemplate the idea of being a single adult male or female and after 20 or 30 years of living alone, you now have to share. THINK. About. IT.) many are literally stuck with no workable options.

the “system” of real estate is NOT designed to foster options that would work.

And all those people desperately seeking roommates–whether in a house or apartment? How many are willing to make some changes and invest in say a second refrigerator? Or upgrade kitchen appliances, or add a second bathroom?

If you can’t afford to make your space habitable by another human, then don’t be looking to pay your bills with THEIR money.

More important, is the greediness of many people offering sublets, offering apartment sharing and home sharing. Some folks are asking MORE than they themselves are paying for a space each month, much more, and thinking that this is OK. Surprise. People are not stupid and when they are financially challenged, they are NOT looking to bail you out!

It’s one thing if you are offering some luxurious place with special features, etc. but that’s not what we’re talking about for “real” people.

I watch these HGTV shows with couples buying this outrageously large and expensive homes and huge mortgages and I’m thinking: How can you afford these places? What kinds of income do you have?

Most people are struggeling on basics like housing and food. And it will only get worse.

Meanwhile, we need ways to make it easy and worthwhile for home owners, those with big apartments (that could accommodate roommates) to share spaces so that each could ease their respective financial burdens.

We have many resources in this society. It’s about finding ways to help each other.

Everybody has to compromise so all can benefit.

Even if one’s own home is safe, one should be concerned about the welfare of our fellow citizens. It is NOT acceptable that people who work hard should find it impossible to find a place to live.

And for those who cannot work or have limited income, they still deserve a decent place to live.

Yea, we all are guilty of over-estimating what we need. But there are plenty of folks who live with very little and are now threatened with having nothing.

The best financial decison my husband and I ever made was to buy a modest house, that was well within what we could afford. The realtor really pushed for us to look at more expensive houses (she knew us and knew our income, saying it’s only XX% of your monthly income), but we had done the math ourselves and knew what we were comfortable spending. We felt we wanted a cushion between income and expenses. Buying a house can be an emotional process. I’ll admit to some initial envy of siblings and friends that bought bigger/newer homes. But, we tried to be pragmatic about our needs and not let our wants rule us.

And then we stayed put through the years instead of upsizing when the kids were born. The benefits of owning the home weren’t apparent immediately, but over the years our income has grown and our mortgage was fixed. We put pay raises and other little windfalls toward the mortgage. A paid-off mortgage will make a major difference to our cash flow in retirement. My husband and I are looking forward to an early retirement, made possible because our housing costs are so low. Living in a small house also means lower property taxes, lower utilities, lower maintenance.

BTW, the house that I consider small (and it IS), is no smaller than my grandmother’s house and she raised 5 kids in hers. We so often overestimate what we need, because we really, really WANT more. I think that may be even more true of housing than of other things.

I completely agree with the comments about extra stuff. We don’t have room for extra stuff. I believe we are less focused on material things because of this. Maybe I’m just being a pollyanna. But IMO the lack of storage space had made us choosy about what we buy and that has made us less conspicuous consumers.

The real advantages of building your own house are getting exactly what you wanted, knowing exactly how all the systems in the house are built, knowing where ever wire and pipe is located, and the pride in having built your own home.

And I agree with not having a lot of extra stuff. I used to live in a 1400 sq foot place and my husband and I had to really minimize what we had in order to not be cluttered. Now we live in a much larger home with plenty of storage, but I’ve maintained the “minimize” idea. We have more furniture now, but not excessive amounts. But the furniture isnt’ the problem – it’s the STUFF. Minimize the stuff – you’ll have less clutter in your home and save money by not buying “Stuff”.

– Dont buy a house if you are moving out of it in less than 7 years.(People say it is 5 yrs but I would give it 7 because of all the closing costs etc).

– Rent an apartment not a house, if you can.

– Rent in cheaper but secure part of town. The money saved living in high crime areas is not worth it.

I would love to see a post about how to sell stuff on eBay or Amazon as well.

*School districts* We’re in the inner city, where the schools have a very bad reputation. Instead of believing the hype, we’ve looked into it on our own and found that many schools are actually very good. Some, however, aren’t. But the biggest factor in the schooling is the parenting. Parents should never forget that they are the single biggest influence on their child’s schooling. Parents should teach their children about life, and then the children can learn academics from any school.