When is it better to just rent a house?

[Greg R Bradley]

What a different world. In most of Southern California, $80-90 per square foot is the price of an empty lot.........

[Brian Elfert]

Have you considered a relocation move? $200K in my neck of the woods would get you a pretty nice home.
Here is just one of many examples.
http://www.homes.com/property/5629-e-us-64-hwy-alma-ar-72921/id-600012152662

Your looking at $80 - $90 a square foot.

That is a really nice home, but I'm not looking to move out of the Minneapolis metro area for a variety of reasons. That home would really be too big for me anyhow. My cost of housing would go way down with that house, but I suspect I would take a substantial pay cut too. I like the low property taxes. That is about 30% of what I pay for my house. Granted, my house is worth more, but a similar house here would still pay $500 to $1000 a year more. I would be happy to only pay $2,500 a year for a $200,000 house in Minnesota.

You certainly can't buy a house like built in 2002 for under $200,000 in the Minneapolis metro area.

[Dave Sheldrake]

Some different worlds you guys have over there, I'm in the middle of moving works and house,

10,000 SqFt works here cost me £961,000 5 years ago.
15,000 SqFt works in Wales where I'm moving to just cost me £83,500.

Here my business rates (a kind of tax on commercial venture buildings) £56,000 a year.
In Wales where I'm moving to, £0.00 until 2017 when it goes to £2,200 a year.

cheers

Dave

[Jim Matthews]

The scale is very different, in North America.

How long does it take to get from Cardiff to London,
presuming your car starts on the first go?

The OP is trying to sort out housing in a thriving city that is subject to very harsh Winters.

Driving 2 hours plus in Minneapolis is very different than the M4.

[Dave Sheldrake]

I guess my only take would be at 50+ you could be paying rent for hopefully in excess of 30 years and not end up owning a brick of it, I have no idea what rental or purchase costs are over there though

cheers

Dave

ps: M4 is pretty good, past 8pm and notwithstanding roadworks it's pretty much empty.

[Brian Elfert]

How I look at it is, yes, you'll own the home free and clear at age 80 if you take out a 30 year mortgage at age 50. However, in those 30 years you'll probably replace the roof at least once and maybe twice, replace the furnace, water heater, and A/C once or twice, and probably replace the kitchen appliances. You may also need/want new windows and siding in those 30 years. You're way over just the cost of the mortgage after 30 years.

As a renter, your only expense is the monthly rent. The landlord has to worry about the rest. Now, the landlord is probably going to want to put in the cheapest possible A/C and furnace so the renter could have higher utility costs. If the windows need replacing they will probably be cheap vinyl windows that may be drafty.

There would need to be a lot of analysis done between renting and a mortgage to see which way is cheaper. There is a lot to be said about renting and just paying a set amount every month. You never have the surprise $4,000 furnace replacement in the middle of the winter. Probably the only rental home I would be happy in is a high end $350,000+ home, but I couldn't afford the rent. A landlord of that expensive a house is probably not going to cheap out on fixing things.

[Fred Chan]

With a mortgage there may be unexpected repairs to be done but the mortgage payments will be consistent for thirty years. One thing that is guaranteed to happen if you rent is that the rent will go up. The big difference is that in 30 yrs instead of you owning the house it'll be the landlord that owns it debt free.

[Dave Sheldrake]

I guess that's the difference in climate and home construction that shows, stuff like windows and roofs here tend to outlast generations with walls being brick or stone as well. Houses do tend to be more expensive here as well though, the current UK average house is £250,000 ($400,000) with London prices being closer to £500,000 ($800,000). If you want something old or big/different here then prices can soon reach $1m+.

That said I know what you mean about costs, I'm in the middle of replacing the roof on mine (the roof is 350 years old) and that's going to cost $60,000 to get done but should last another 300 years.

cheers

Dave

[Moses Yoder]

I think the cabin Thoreau built was 100 square feet. I have always wanted to try that. I could have an inflatable mattress, a dorm refer and camp stove. I would want high speed internet and a nice recliner to set on with my computer and I would be good to go. An outhouse would be in addition to the 100 foot. It would be somewhere in the south where it is warmer and I would use just hand tools for my wood hobby outdoors. What more would I need? There would be great meaning to this life. I am currently married, unable to pursue this dream of mine.

[Brian Elfert]

I guess that's the difference in climate and home construction that shows, stuff like windows and roofs here tend to outlast generations with walls being brick or stone as well. Houses do tend to be more expensive here as well though, the current UK average house is £250,000 ($400,000) with London prices being closer to £500,000 ($800,000). If you want something old or big/different here then prices can soon reach $1m+.

That said I know what you mean about costs, I'm in the middle of replacing the roof on mine (the roof is 350 years old) and that's going to cost $60,000 to get done but should last another 300 years.

One of the big issues with windows here In Minnesota where it gets quite cold in the winter is the older windows tend to be drafty. The drafts drive up energy costs. Many older houses were built in an era when energy was cheap and the heater just ran longer to keep the house warm. Heating costs have gone up quite a bit since then. The other issue with the really old windows is the work to keep them in good condition. They need to be painted and possibly reglazed fairly regularly. Some people really like the look of the old wooden windows and will do the work to keep them in good shape. The final issue with really old wooden windows is they just don't open or close very well compared to modern windows.

Roofs in the USA tend to be asphalt or fiberglass shingles and they generally will last 20 to 30 years. My roof is 2,000 square feet and will cost me $7,400 to have it re-roofed with new fiberglass shingles in the next few weeks. Some areas of the USA do use a lot of tile roofs that last longer, but also cost a lot more up front. I would use metal shingles if I was living in a house where I planned to stay the rest of my life.

[Matt Meiser]

I would think tile wouldn't do well with ice and freeze thaw cycles.

[Brian Elfert]

I would think tile wouldn't do well with ice and freeze thaw cycles.

That would be why they are mostly used in the southwest area of the United States. I do occasionally see an older building in the Minneapolis area with a tile roof.

[David Weaver]

There are a lot of roofs here that are slate and tile in older areas of the city, and we get a lot of freeze and thaw. I have no idea how much it costs to maintain them, though. There are companies that do slate and tile repair only, but it may be a tradeoff if you have an older roof - cheaper to maintain the slate or tile than replacing. I'd assume that tiling a roof now would be prohibitive unless it was on a pretty expensive structure.

[Dave Sheldrake]

It's interesting to read the differences between our countries Brian

Dave, slate will last literally hundreds of years if it is taken care of (not walked on) and isn't a hard DIY job to lay (so long as you are comfortable working on roofs) that said we have a LOT of active slate mines here still so I'm not sure if it is expensive to buy the slates over there?

On another area, are heating costs over there high? ( I have oil fired (kerosene?) boilers) running water radiators all round the house and costs me about £1,500 a year to heat (with old not very efficient single glazed sash windows and solid stone non cavity walls)

cheers

Dave

[Brian Elfert]

I don't know any buildings locally with slate roofs. I have never seen a house in the surrounding area with a slate roof. Some of the older mansions in the city might have slate roofs. The USA wasn't even founded until 1776 so there aren't buildings hundreds of years old like in Europe. People in America tend to want new houses. Houses that are 50 to 60 years old are being demolished to make way for new larger houses locally. It is rare to find a house built before around about 1890 in Minnesota. The state wasn't being developed much before then. Some houses in my neighborhood were built in 1911 when a trip to St. Paul was a half day affair. Today with modern roads and modern cars it takes me under 10 minutes to drive to St. Paul.

Folks who heat with oil can easily spend $3000 to $4,000 on heat in a cold state. My house is very new and I spend less than $1,200 a year to heat a 2,600 square foot house in Minneapolis, Minnesota. Natural gas is generally the preferred heating fuel. I know people who own big old drafty homes who spend hundreds of dollars a month on natural gas during the winter months. 1,500 pounds seems high for heating a house in the UK where temps seem to be more moderate.