Anyone renting their primary residence?

Question

I've been reading different financial forums like MMM and Early Retirement forums looking for opinions on paying off a mortgage whether rental property or primary.

That lead to me reading this post on why a home is a horrible investment.

http://jlcollinsnh.com/2013/05/29/why-your-house-i...

A home of course being different than an investment property.

With a primary home you have the benefits of living in it, but no rent.  But is your primary residence negatively affecting your cashflow or total net worth?

Would it make more sense to rent instead of own your primary due to the high expenses of home ownership?  (Repairs, Property taxes, mortgage payments, etc).

Is there anyone here who owns investment property but rents their place?

Maybe someone who lives with their parents but started buying property?

Lynn McGeein · Answer

There are several good reasons I can think of to choose renting to live in while you buy investment property.  We have told our daughter, for example, to consider keeping her apartment while she buys investments in another city as she cannot afford to buy in the area she wants to live in, but she has an affordable one-bedroom apartment close to everywhere she wants to be, so perfect for her right now.  We currently rent as we are in a temporary work assignment in another city.   I will point out, though, that if renting is much more expensive or more hassle than buying, as it was in Annapolis, it was better for us to buy, then rent it out when we're not there, as we're doing now, versus dealing with landlords and moving at the end of lease terms as they all wanted to raise the rent significantly at renewal, and that gets old, especially when we save $100s per month versus renting when we do live there.

Royce Talbo · Answer

@Dan D.

"Would it make more sense to rent instead of own your primary due to the high expenses of home ownership?  (Repairs, Property taxes, mortgage payments, etc)."

You should not even think of this because it doesnt matter if you have it as an investment or as primary residence you will be paying the same things.

Now back to the main question,  yes I know several people who have investments but rent. There are a bunch of reasons like they moved and kept their old house, while getting a feel for the new area.  Some of my friends chose to buy an investment first and live at home to build equity while paying cheap rent to their parents.  The same goes for if you bought a SFH and rented that for $1800/month, but you are a single guy and just need a studio.  You could move out and rent a studio in town that is closer to work for maybe $900/month.  For example if you bought a SFH for cheap because it needed a lot of work.  You didnt have the funds to reno it all one time, so you live in it and work at it after work and weekends one room at a time.  After several months you finish, but you still dont have funds to buy your next place, so you rent a smaller place and rent out your place to build up enough to repeat the process.

Nicole A. · Answer

Everyone has an opinion on this.

Sure, if you have a mortgage on your personal home, then you have a liability...but let's face it, usually your personal home is not about making the numbers on your wealth sheet look good. This is about a place you call home. If you're renting, then you're just paying off someone else's mortgage. Why not own your own home? I don't get that. Plus, you'd at least get some tax write offs. And you do what you want to your own home.

However, having said that, my husband and I do rent out the extra bedrooms in our home! We used to rent out two rooms, but not we're just renting out one bedroom. This is not for everyone because not everyone wants to share their home with someone other than family/significant other. We don't mind it though and it's paid for a lot of things! Plus we get to write off more things such as repairs and such because our personal home is a partial rental.