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Don't know whether to keep renting or buy?

My husband and I plan on getting out of debt in a few years and saving some money for a house or property. We are renting a trailer for $450 per month, however there's another trailer near us for sale for $15,000. My question is...is it better to pay the rent "wasted money", but stay focused on "the prize" or buy the trailer and in a few years maybe sell it and put that money towards a down payment on another home or even move it onto some property? I don't know if it's a stupid move, because trailers/modular homes don't appreciate in value or a good move because then we have something that we own and can either sell it or move it and have something "free" to live in. Also if we buy it we still would have to pay $180 per month to have the home on the lot.

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Anonymous

Asked by Anonymous at 8:00 PM on Sep. 7, 2009 in Money & Work

Answers (6)
  • I would keep renting. First of all trailers depreciate in value, you will NEVER get out of it what you have put into it. Whereas with a house, they go up in value. Don't think of paying rent as "wasted money", think of it as a smart place to be. When you pay rent, you can pick up and move when the lease is up if you get tired of living there. You don't pay any maintenance fees when you pay rent, all you pay is the rent that you agreed upon when you move in, if the landlords want to raise it you have the option to move out. If you own your home and the insurance company raises your premiums and the property taxes go up (like ours do every single year) you don't have the option of leaving. When your house needs a new roof and you rent, the landlord pays for it. If you own the house you have to come up with $10,000 to replace it.
    slw123

    Answer by slw123 at 9:21 PM on Sep. 7, 2009

  • My point is that you should wait to buy a home when owning one would be a blessing and not a burden. Never buy a home when you are in debt. Do not go into debt after buying one (buying new stuff for it). Always save up at least a 20% down payment, even if 20% isn't required. Have an emergency fund saved that will cover 3-6 months of your family's living expenses should something happen like a job loss. Make sure that your mortgage (including taxes and ins.) is not more than 25% of your family's income. When you do all of these things, your home will be a blessing to you.
    Aside from the value on a trailer going down in value, if you are paying rent for a lot then you don't have stability either. What if the owner of the lot decides to sell out to a developer? Then where are you moving your trailer? Just some stuff to think about....
    slw123

    Answer by slw123 at 9:27 PM on Sep. 7, 2009

  • OP here: good points, thanks!
    Anonymous

    Answer by Anonymous at 9:39 PM on Sep. 7, 2009

  • I lived in a trailer after purchasing it for 15 years, as the value of the trailer was never above what the loan left on it was, When it was paid off (and I assure you, it was no longer in good condition they are made from junk) I sold it for what I could get out of it---a dollar.
    I wouldn't waste one red cent on a trailer ever again. I would rent rent rent! I don't like them, i dont recommend them, and I cannot for the life of me understand why anyone would..I was sucked into it by my husband. Then I got stuck with that sucker in the divorce!
    I was also in real estate later in my life---and people would call me to try to sell their trailers, wanting decent money out of them. These people couldnt even get enough to pay off the loan, leaving them in the hole for a long time. It's almost dead end and hopeless, that's how I felt when I lived in one.
    romanceparty4u

    Answer by romanceparty4u at 4:15 AM on Sep. 8, 2009

  • I would pay rent and work hard on paying down the debt you have. Dave Ramsey is a good guy to listen to about paying down debt and getting your financial ducks in a row. After you pay the debt save for a downpayment 20 percent down will allow you have some equity in your home and you can avoid paying mortgage insurance which is determined on how expensive the house is. It might take you a few years but being in a home you own instead of one that essentially owns you is worth the wait. We are 37 years old and just bought our first home. We worked and moved a lot but we saved during that time and we put down 75 percent we were able to buy a 400k house and our mortgage payment is not much at all. Our mortgage is for 5 years and then we will own it free and clear. We don't make a ton of money but we manage it well and make it work for us. Check out Dave Ramsey and wait to buy.
    Anonymous

    Answer by Anonymous at 10:57 AM on Sep. 8, 2009

  • OP here: hmm...good points! Thanks...that will definitely give me something to think about!
    Anonymous

    Answer by Anonymous at 4:54 AM on Sep. 9, 2009

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