Rent vs. buy

There was a column in Wired a few months back that talked about the merits of buying versus renting stuff. If the economic mess of the last few years has made us think about anything, it has made us think about the stuff we own, and why. The long-standing argument that buying a house was an investment turned out to be a myth. I'm still paying for that one.

I would very much like to buy a house out here in Washington, and if I weren't still trying to unload in Cleveland, I would be well on my way. What isn't as clear to me these days is whether or not it's a good idea. The pros and cons aren't as obvious as they used to be. I've found myself challenging everything I thought I knew.

This isn't something limited to real estate either. After buying my last car and keeping it for six years, I'm leasing my current car. There were several considerations around that: Toyota was pretty much giving cars away, they're coming out with plug-ins next year and frankly there isn't much win to buying a car in this environment. So what's a hundred bucks a month to enjoy a new car, then get another one in a couple of years?

After renting for a year, I've learned that there are some distinct advantages. You don't have to maintain stuff when it breaks, it's someone else's problem. You aren't tied down to a specific place either (not that the other house ties me down, but I don't particularly enjoy paying for a place I don't live in). We picked up and moved, and moving expense aside, it wasn't that big of a deal.

Sure, the negatives are that you aren't building equity, but that's not a great argument for someone who has lost a shit-ton of equity in his first house, and still can't sell it. It's not like I had some silly ARM arrangement or no down payment either. The 20k I put into it (that's net after the divorce settlement) simply can't be recovered, and there's more loss to take before it's all done. To me the biggest negative I can find is that I can't really plop a hot tub in my back yard.

The culture around the "American way" has become one of accumulating stuff, and while a house isn't simply "stuff," it is one more thing you generally can't outright buy with cash unless you make an exceptional amount of money (and even then it seems those people simply buy more house). While I was never in any real financial danger or facing high amounts of risk in the last few years, I have to admit that I've dramatically changed the way I view borrowing money and "investing" in real estate. The next few years will be an interesting time for me in terms where I live.