To Buy or Rent a House in the U.S. (e.g., Arizona)

[cruiser]

I was talking to some relatives who are looking at purchasing a house in the U.S. to use as a winter getaway. They mentioned that they were even down in Arizona in November and even had a real estate agent take them around to look at houses. Pretty well anything for sale is held by a bank and there are certain hoops to jump through when making such a purchase.

One alternative that they are seriously considering is renting a house (vs buying it). They can afford to either one (cash), but are thinking:
1) If you buy a $200,000 house right now and hold it for 5 years, but the market drops and it's worth $150,000, you've lost $50,000
2) If you rent the same house for $1,000/month (x 60 months), you also spent $60,000 but then don't have to worry about paying taxes, upkeep/maintanance, etc, because you will have a landlord looking after everything. If you don't like the house after 1 year, you can always move out with less hassle then trying to sell it.

Just wondering if there are people who have considered looking at a rental home vs. the purchase route. I'm thinking you don't have the hassle of taxes, real estate agents, upkeep and maintanance to worry about, and in the end the house is still yours 12 months of the year.

Appreciate any feedback.

thanks,
Cruiser

 

[vancity_cowboy]

in general i would always rent first in a city that i wasn't familiar with

first, there may be some areas that are better for you than others and you will only find that out by living there for a while

second, some areas are more prone to crime than others, and again you will only find that out by living there

third, as good as the prices look now, there are always some really smokin' deals that come along infrequently that you have to be there and watching to even hear about

and lastly, by living there and sluething things out, your friends can figure out the steps they would have to go through to MAKE SURE that the banks actually hold the paper on the properties. as you probably know, the real estate scene in the us is so fucked up by the sub-prime mortgage scandal that many of the banks are bluffing when they say they own the paper on the properties. they may own A paper on the property, but they can't show the paper trail from 1950-something all the way through to 2012 because things went sideways during the scandal... many of the real estate financing firms just plain went belly up and that paper trail CANNOT be produced

you DO NOT want to owe money on such a property, because sooner or later some scam artist will show up claiming that his great great grandfather owned the land as part of a ranch or something stupid and he never sold it and the land and the big beautiful house is therefore his. how do you fight him if the bank can't supply the complete paper trail?

all us property transactions MUST be guaranteed by a GOOD title insurance firm. like the gentleman said, 'no tickee, no laundry...'

 

[princeofdarkness]

Sometime last Spring, I went in blind and purchased a 3 bedroom townhouse along with 3 retired professionals. All play golf except for moi so hence their choice of a retirement getaway located on the outskirts of Scottsdale. The townhouse sits in a family oriented gated community. The townhouse was had for about $57,000 USD and we all paid $16,000 each, leaving $7,000 for legal expenses, basic furnishings, utilities etc.

Like I said, I went in blind and was later advised of what I had committed to purchase. That was the last time I mixed Mojitos with many "neat" glasses of nine year old single barrel bourbon.

Now I'm stuck with something that I have yet to experience let alone the obligation of flying there because I own a piece of something. Personally, it's not my ideal location so I'm somewhat stuck with something I don't need nor intend to use. Should the property value increase in the next few years, which I doubt, then it'll be a blessing.

For now, I've filed it away in my list of "things to resolve".

If I had the choice of USA real estate investment, I would consider a condo in Las Vegas instead.

Peace.