3.13.2012


So we are kind of sitting comfortably on this side of the fence as home renters, peeking over to the side of homeownership. For years I was convinced that homeownership was the end all goal, but now that it is a little possible (maybe?) I am not so sure. We would have to sacrifice so much, you guys. We love love love where we live. We love out house. Our rent is really reasonable, since we have stayed put for the last decade. (!)

So there would be sacrifice. Primarily location. But within that, there is a lot.

Alternately, we could sacrifice space. There is a very nice, very small one bedroom house in our neighborhood that we might afford. People in New York share 1 bedrooms as a fammily of 3, no? 

Also financial. We are dead set in (should we embark on the journey) keeping the mortgage low. But I know all of the other costs of owning will sneak up on us. So yeah.  

The pay offs? Well. An investment. Of course. In 30 years we will have something that we can eventually pass down to Henry, instead of.... Nothing? And, you know. It would be OURS. We could do things like build a porch or take down a wall. Which brings us back to financial......

I'd love to hear from those of you who have had to make similar hard decisions. Did you skip buying in favor of renting? Did you take the leap, and how are you finding it? Do you live in a tiny place with offspring?

45 comments:

  1. Do cats count? No? Ok...

    We juggled this idea for a while, and during the time we were renting a house, we decided to go ahead and buy, since (where we are) our mortgage would be less than renting. Of course, you know, there's all of these other fees like insurance and closing costs and blah, blah. But, I don't know... it's not an end goal, but there is something very compelling about our own space, small or large, that we can do whatever we want. That, and garden space, which we cannot have in the apartment where we are at now. And a dog.

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    1. ha! sounds like you guys had nothing to lose! we will be paying more monthly (in addition to all those up front costs) and downgrading to a smaller house. ;) yay dog and garden!!!!!!

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    2. Haha, don't get me wrong... we're still renting. :) I sounded all positive here and then kinda whined over at Celia's. I am looking forward to hearing more about your adventures, though. Best of luck!

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  2. We bought a house. We liked the idea of putting our money into building equity rather than down the so-called "black hole" of renting. Then again, we're spoiled by relatively cheap housing prices for buying as compared to renting in our area.

    Of course, now we're discussing moving so we need to sell the house. Flexibility definitely goes down (but depending on your lease terms it might be sort of a wash).

    I'm totally an advocate of small places, even for families. What sort of square footage are you looking at? We're at about 950 square feet (for two and a dog) and that's plenty roomy for us--we've said many times we could downsize if we needed to.

    Annnd there was an unhelpful, on the fence comment. :-)

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    1. we are at about 850 for 2 adults, a baby, 2 big dogs, and one loud cat. and if i could buy this little house i would be PLEASED AS PUNCH. when i say we could buy a smaller place in our hood, we are looking at... 600 square feet?

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    2. Like I said, we would happily go smaller (why do I clean that spare bedroom again?). It's about how big it lives. And you live south-ish where it's nice most of the year right? That might help.

      Shit. The three of us lived in a Jeep Cherokee for a month. Annnd we're thinking about living in a van for two years. Small is awesome.

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  3. You probably know we Brits are property-ownership crazy, and we own our house. But the point of having paid off the mortgage in 30 years (or whenever) as I see it is not so that we have something to pass onto our kids but so that we no longer have to pay rent/mortgage and will be better off in our retirement. That's why I would go for it but only you can decide.

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    1. oh FOR SURE. that is a big part of it. i just didn't say it outloud. i have a hard time articulating my thoughts. :)

      sigh. i think i know it is right, i am just having cold feet. before having henry we didn't care about moving into a poor neighborhood. but now i like our parks and all the other families and the safer area and the walkability. boooo!

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  4. I am a believer that if renting is giving you a good quality of life then why disrupt that just for the sake of owning where you live. I also though as a renter understand the frustration of not being at liberty to make changes without an outsiders choice.

    Seeing as you have been in your current place for such a long time you could always see if the owners are willing to sell or are open to your changes on your money. I have 5 yrs of property management experience and have found owners to be very open to well detailed requests especially when the financial burden would be shared.

    Lastly I also believe in living in manageable space when I lived with my parents it was 5 of us in a 1302 square foot home and it was perfect then and will be manageable for my parents as they age. My in laws on the other hand are now in a 7200 square foot home which is getting to much for them to handle with all the kids grown.

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  5. YOU GUYS. our current house is only 850 square feet. and we are looking at having to go SMALLER. ;) i dont think of 900 as small!

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  6. We rented for years, but we bought a house when the kids came. (Our condo only had 300 sq. feet!) We saved and saved and saved so that we'd have a decent down payment, and we bought a house that we could live in while we slowly fixed it up over the years. That's how we managed to keep our mortgage lower than some of our friends. My sister, however, continues to rent, for a number of reasons. Mostly because she and her husband want to stay in the city - they have a little boy and twins on the way. It can be done. As always, there's no right answer. Just what's right for you.

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  7. your kid needs a bedroom.

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    1. THIS. You won't want to share in a few years, he will despise sharing once he hits 10 or so.

      On the other hand, if the space had the potential for an add-on later? That would be workable.

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    2. Yup. Agreed. Buying means you're STUCK. And sharing is great now, but H is going to need his space, in... not that long, really. Seven year olds need space. The families I know with one bedrooms have the parents sleeping on a pull out couch in the living room and the kid with their own room. If you HAVE to, you HAVE to. But. Buying isn't reason enough for that, if you ask me.

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  8. Obviously, I think you have to do what is right for your family. As you know, we bought a house in August of 2010 right after we relocated from Nashville to Durham. Our mortgage is around the same amount we were paying for rent, and yes. There are added expenses. If the hot water heater explodes, you have to pay for it instead of calling up a landlord to fix it. But there is just something I wouldn't trade about owning our own home and making it ours. We discuss the possibility of adding on and staying in our house for years to come.

    The flip side is that we live in a much more affordable housing market. And really? One bedroom for two parents and a child seems stressful. One day Henry is going to want his own room and privacy. And if you love your neighborhood and your house, I think you should stay. Stay until you are 100% sure it's time for you to move on.

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    1. i am so afraid that by the time we decide that, the market will be back and we wont be able to afford to buy what we are looking at now. :(

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    2. home slice, the market won't be back for A WHILE.

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  9. we live in a small two bedroom apartment in nyc with our baby. the second bedroom houses her nook, my office, and our closets. it's not ideal, but we love our neighborhood and moving in nyc is incredibly expensive. however, i must admit that it's not as bad as i thought it would be. then again, she's only seven weeks old. i'm sure my thoughts on the matter will change once she's crawling/walking. and on another note, we've wanted to move to southern california for years now and the major thing holding us back is not being able to afford to buy a house (we were never planning to buy in nyc). renting doesn't really bother me until i think about retirement. having to pay rent when you're on a fixed income scares the shit out of me. how would we do it? it's not like when our parents/grandparents were younger and collecting pensions. i'm a freelance photographer and my husband is an architect! there are no 40 year pensions coming our way... so much to think about...

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  10. I bought a house smaller than I could afford, and then we added on later. As a result I love the house so much I still own it, close to 30 years later,

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  11. ESB is right. kid needs a room. and the last thing i want is to feel like we need to upgrade in a few years.

    so now we go back to location....

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    1. Hey, La Mesa is getting pretty awesome and has the whole walkable/village/restaurants thing going. And good schools! I believe it's still the case that you can get more square footage and property for less out here.

      Get a good realtor and look around...see if you can see yourself living somewhere else. You might surprise yourself? Actually, the prices near where you are might surprise you too...

      I feel like the low prices and 3% mortgages are not going to be around forever. If you see yourselves being pretty rooted in San Diego long term, then I think this is the time to buy. You may not want to right now, but you will later and then might not be able to.

      Get a good realtor (I know one) and have them show you around and help you crunch the numbers. It might be more attainable than you think, esp. once tax credits are factored in. It's hard to make decisions when you don't have all the info you need.

      The thing about the cheap rent is it's nice while it lasts, but there are no guarantees.

      Ideally? Buy a duplex where the other unit nearly covers the mortgage. Rents are so high, this wouldn't be hard to pull off. My SIL pays $1400 a month for a crappy duplex in Santee.

      My two cents!

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  12. As I think others have mentioned, I recommend you consider how all those things you'd have to give up might affect your quality of life. For some people, losing one or more of their preferred home features is no big deal, but for others, it's the makings of depression and misery. My husband and I are in a situtation where trade-offs must be made -- we can't live in the city affordably AND have our little (but upgraded and awesome) house with a yard. While we're sticking in the suburban house for another year since we have a baby on the way (and, um, he or she is due during the week we'd have to move, ooops!), it's definitely taken its toll on my happiness (I miss the city!). From this experience, I learned that location location location means a lot to *me*, so we'll have to take that into account for every future relocation.

    But if owning a house will outweigh the loss of your preferred features (like location, style, space, etc), then it would be worth it.

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  13. Oh, by the way, there have been some interesting rumblings out there about whether it's REALLY better to buy than rent (and of course, it's always individual). Here's the Get Rich Slowly article that your post made me think of: http://www.getrichslowly.org/blog/2007/07/16/renting-vs-buying-the-realities-of-home-buying/

    Just another interesting report to consider.

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  14. We are renters, and are planning on continuing to rent for a very long time. Our situation is somewhat special because we rent from my uncle, but I still think that long-term renting can be a good strategy for families. Our home expense is capped (when the sewer line needs replacing, it's not our problem) and we feel free to make cosmetic changes that we will enjoy for a long time. Because we aren't house poor, we can travel and I can stay home with Meret now, and we are able to save for retirement. We live near the beach in a neighborhood that we love.

    That doesn't mean we will never own a home -- we will probably buy a place to retire in, but our retirement needs will be different -- smaller place, not so picky about the neighborhood, maybe a less expensive city (or country!). And we have talked about buying a vacation home -- a very affordable cabin somewhere -- though we don't have plans to do that right now.

    I feel like there is no greater burden than being trapped in a home that doesn't fit (for whatever reason) or that you can *barely* afford. (Been there.) And if you end up unemployed and can't pay your mortgage, you lose your entire investment. And as for feeling pressured by the real estate market? Lots of people have fallen into that trap and made a decision that's bad for them. (Like everyone I know who rushed to buy a house when prices were rising and is now trapped in an underwater mortgage in a house that they don't even like.)

    Home ownership is awesome, but if you are going to buy, you need to love the location and want to live there long term, and you have to be able to afford it (even the unexpected costs) and maybe even an emergency fund so you can keep paying the mortgage under any circumstances. The flexibility that comes with renting can actually provide a lot of peace of mind.

    That said, you could probably afford to buy a great little house in my hood. Which is perfect, if you count the beach (surfing!) and the vibe and the people, and ignore the lack of great restaurants and the commute (though the train is great). ;)

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  15. Dude, sorry for writing a book in your comments!

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  16. We looked at houses for 2 soul sucking months a few years ago before deciding to forget about it for the time being.

    Now we've had hesitant talks about it again. I'm fairly happy renting, but there's something about owning that tugs at my heartstrings. And D really, really wants to own.

    We'd definitely have to sacrifice location. We're living in a ridiculously expensive neighborhood that is mostly apartments.

    I think one of our main issues is the down payment. I'm not sure how we'll ever manage to sock away 20% down on a SoCal house price and I think the days of much lower down payments are gone.

    You definitely want a house that you can grow into. If you think it might be crowded now, it's definitely going to feel crowded when the baby is bigger. And I'm pretty sure "starter houses" are officially a thing of the past.

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    1. RIGHT? Yes, anyway, we put it out of our minds too. I'm crazy about location (it doesn't have to be hip, but I do want it to be urban) and I'm CRAZY about having 20% down. I worked in finance during the crisis, and I saw how many people lost their houses because they didn't have that. Plus, if you don't have 20% down, you're required to get insurance, which will add a grand (often) to your bill every month... and grand that gets you NOTHING. You're just throwing it away (how is that for a black hole for money). I think the craze to buy is not as sensible as it seems. If you can afford it, great, it's a nice luxury (and it tugs at my heartstrings too). But it's not necessarily an investment in every market. Lots have studies have been done that show that even with solid inflation in property value, you still don't make money over a 30 year span with all the additional costs. Sure, you get to own a place if all goes well, but in markets where you'd be paying more in a mortgage than rent, you can also just save your money and own cash (which is flexible!).

      As for renting being a black hole for money, PSHAW. You get a place to live for cheaper than you would when you buy in urban markets, right? That's more than I get for most things I buy (cough shoes and dresses cough).

      Blah, blah, blah my opinions. Basically, if you can afford something you'll grow into with a solid downpayment, I think it's a great call. But if not (and for most of us, it's if not ;) I think buying is over hyped.

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  17. Our house is about 900 sq feet, plus 400 sq ft in a semi-unfinished basement space. My husband and I have lived in two different 600-ish sq ft places, and I honestly can't imagine buying a place that small without plans in place to add another bedroom or den. We have gear (camping, climbing, surfboards) and that is honestly the biggest issue for space with us. In one of our small places we had our surfboard rack in the dining room, which at the time didn't seem crazy, but now that they're in the basement I look back and it seems totally nuts.
    We would never go back to a place that small again.
    When we moved and bought our current house, I realized that we'd really been sacrificing quality of living to live on top of each other in such a small space. It is so nice to have storage and a little more breathing room. That said, now that I am pregnant, we are talking about ways to finish off our basement to use that space more efficiently.
    I feel that if you are going to buy a home you should *love* it. There are no guarantees anymore about making a profit on selling your home, so you need to have other reasons behind it.

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  18. love this topic. i'm in the beginning stages of house hunting and it has ben a tough choice. living in the midwest, real estate is pretty reasonable so that influenced my decision a lot. i can get more house and other perks for much less than i would in new york or california. it's a hard choice but i'm happy that i'm on the homeowner path, we'll see where it leads! fingers crossed for a small, little fixer-upper that i can craft into a family home!

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  19. i bought a house with my boyfriend 3 years ago, we are married now. we live in the bay area so it pretty much seemed like the best time to get our stake (who know things would keep dropping....) so if its a normally hard to buy location and you can get in before things get crazy again (in 10 years) then i say do it. if things are pretty steady where you live then id say there is no real rush to buy.

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  20. my husband and i are just starting the house hunt now too. we love the place we are renting and it's in a great area with great schools and stuff to walk to. unfortunately, our budget for ownership in los angeles means we need to sacrifice space and probably safer neighborhoods. it's scary and annoying. if it were just my husband and me, we'd be fine with it. but with 2 little kids, i'm having a hard time justifying it just so we can have a backyard. (we actually saw an amazing place this weekend that i would have immediately thrown in an offer had the front sidewalk not been littered with a condom and 2 bottles of mickey's.) we have now broadened our town choices for the hunt and hopefully the right spot (size, neighborhood, price, etc) is out there for us. i wish you luck in deciding what's best for your own family.

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  21. WHOA. are we the same person?!

    so much to discuss here.

    1. do not buy a smaller place. DO NOT. new yorkers live in small spaces because they have to. there's a reason so many people with babies/starting families move to brooklyn... MORE SPACE. as a person who lives in a 650 sq ft space with a baby and just one pet, i think i can safely tell you that it sucks. even though we share a room with cheech, and would have done so if we had a two bedroom, i cannot tell you HOW BAD i want that extra room/space. you KNOW ME, and you know that i'm not exactly a hoarder (quite the opposite, actually), but even still, we are so passed our limit at this point. we literally have shit stacked on our dining room table (shit we use on a regular basis) because there is simply no room for it to have a proper home. i don't know about other people, but i hate living this way. 850 sq feet sounds like a dream com true at this point.

    2. yes, H needs his own room. i know he doesn't need/use his now, but he will in a couple of years. and unless you guys are looking to upgrade again within that short amount of time, you will regret not having an extra room for him. think long term.

    3. we live in PRIME oakland and sadly, we've come to the realization that we will have to give it up. maybe things will be different in the future, but owning in our current area is so far out of our financial comfort zone. honestly, i'd rather sacrifice location than sacrifice living comfortably and not shitting my pants every month because i'm not sure if i can make ends meet. again, some people are cool living that way. i am not one of them.

    4. we are hyper aware that there are so many extra costs when it comes to owning, so we're looking WAY BELOW what we were pre-approved for. almost half, actually. it has made this whole process THAT much more difficult, though. :(

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  22. We are in EXACTLY the same situation with the same thoughts with a almost 3 year old and one dog in just under 900 sq ft in LA...maybe you're decision will help us make ours!

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  23. Buy.

    We sacrificed living in the CBD for living an hour out. It was a leap at the time but now that we have a kidlet I am so grateful we did it. We bought at a time when the market was low and if we hadn't of done that we'd have never been able to buy. Not only are we paying off something that is ours but we MAKE money in equity, it's a no brainer.

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  24. we bought the house we were renting (572 sq feet!). it dropped our monthly payment by $10. woohoo.

    however, though we've since had to pay for little things here and there, we knew that most changes would be things done on our own time when we had the time and moola. and care to do so. little things we would usually call the landlord for really, so far (knock on wood), are more inconveniences than account drainers.

    we knew, when buying this house, that we wouldn't be here forever. it's a 100 year old one-bedroom and we know we want more than one child and, thus, more space. but it's ours. and though the housing market isn't what it used to be, it's potential future equity we could afford to invest in. and repairs aren't that crazy--unless you're looking to stay long-term i wouldn't buy anything that requires a ton of fixing-up with uber-important things like electrical and plumbing and structural. if it's a house you just want to start out with but move on from in the next half-dozen years, find something that just needs a little love.

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  25. We moved to Indiana from California and bought. Things are just stupid cheap here. HOWEVER, we hope to move back to California in the next five or so years and we are already talking about whether we will rent or buy. Silly, I know, but these thoughts impact how much we plan on paying down our home and how much we decide to remodel. Currently, all roads are leading towards renting. We talked with a financial advisor who made a point that building up savings/retirement can do more for you than owning a home, especially when you live in an area of the country where housing prices are high (even when the market is down).

    With that said, even though you LOVE your location currently, scouting out properties that are in a pretty good location and has the room you need might end up being perfect. You could come to LOVE your new neighborhood and have a place that is yours and an investment and...

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  26. We bought a house this summer (selling the older house). The new house is huge and I will say, though I may be in the minority, that I love having the space. We bought the house more for location and feeling than the space (and probably would have opted for less space) but now that we have the glorious space I would never turn back.

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  27. My biggest unintended consequences of buying a house:

    1) Significantly less travel and time spent doing things I enjoyed while renting. It's hard to pull myself away to go for a bike ride or take a week-long vacation when I balance the time/money that I could be spending on my house. I purchased a major fixer-upper (3000 sqft) on a big lot (1.7 acres), so my situation is a little different than yours. However, I think the tie you feel with your home scales no matter the size or condition. You want to pay off your mortgage and invest yourself in your home. The urge to spend your resources (time or money) elsewhere is less.

    2) Uneasiness of planning for surprises. At any moment our HVAC could fail, the roof could need replaced, ..... It's scary to think about how I would react and recover from big, unexpected expenses or repairs. Right now my partner and I have "house catastrophe" savings in the bank and are hoping for the best.

    My biggest unintended benefits of owning a house:

    1) I really, really love it. It's so rewarding to pay my mortgage every month and be closer to owning our house outright. I always look forward to the weekends that we spend working on our garden, installing fencing,fixing our house ...

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  28. Buying a house is a great goal for the New Year. Make sure that resolution has some back up with a life insurance policy. You can get a quick and easy quote from IntelliQuote in just minutes. Find out how little it could cost to keep (and protect) that home for future generations. http://bit.ly/FQbj6e

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  29. i got linked to your blog through modern kiddo's sling story and i'm loving the new discovery. great pics!

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  30. I need to show a photo of that little blonde girl to the lady who colors my hair. And cuts it, for that matter.

    And we're gonna be renters. Maybe forever. Houses are too much money, yeah, but also too much damn work. We're living this year in a house where we do the maintenance and HOT DAMN it's a lot of time.

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  31. We bought our house in Napa in January of last year with an FHA loan that required a 3.5% downpayment. Yes, we have to pay mortgage insurance for 5 years because we put less than 20% down, but it is $160/month, not $1,000. The monthly payment (mortgage, taxes and insurance) is definitely less than rent would be on the same house in our area.

    I definitely recommend getting preapproved for a mortgage if you are interested in buying. It only takes about 20 minutes and there is no commitment, it's just a good way to see EXACTLY what all of your possibilities are and how much things cost.

    Also, just more of my 2 cents here, but i would look for a 2 bedroom. We are two adults and an 8 year old boy (named Henry!) in an 1140 s/f 2 bedroom/1 bath house, and it's perfect. not too big, but we can each find our own little spaces when we need quiet.

    Good luck!

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  32. don't do it! even as a new yorker, i would not live in a 1 br with a kid past the age of 1 or 2. my boyfriend and i are actually trying to find a 700 sq ft+ place just for the two of us...i could live smaller but we want to have room for playing music and entertaining. your situation seems pretty good to me, especially the reasonable rent (i'm so annoyed at how high rents are in new york) so i would just stay there unless some great opportunity comes along.

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  33. girl, i feel ya. we moved from our adorable rental house in normal heights, a block north of adams and walking distance to our favorite restaurants... to college area, walking distance to el cajon blvd and nowhere near any of the places we like to eat or hang. BUT every month that we pay mortgage and not rent, it feels worth it. we could have stayed in normal heights but our house would be tiny with no yard. in this 'hood, we got tons of property and almost 2,000 sq. ft. I still miss living in a rad neighborhood but I love getting to put our money and energy into our own place... not someone else's. i say do it! mostly because i want cool young people to move east so that college area/la mesa will be the new north park/hillcrest;)

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  34. Unfortunately, I have no wisdom to add. I just wanted to say thanks for this post because my fiance and I have been slowly mulling over the rent/own question for a while. Its nice to hear about other experiences.

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