Right now I am beginning the process of looking for somewhere to live. I was wondering if any of the current h.commers had any experiance either buying or renting a place and wondering which you the audience would reccommend.

buying.

That is hardly a rule. It depends on rent levels and housing levels and future trends. All things being equal, ownership is superior. However ownership can be financially unwise in many situations. There's no simple rule.

I also recommend buying.
Why throw your money away every month? If you have the money for a down payment, mortgage each month, and maintenance, you should buy. It's a good investment.

Agreed but why would he ask the question if buying was not a possibility financially

Again, that's not a rule. In a "textbook market" it's normally sound advice, but that doesn't mean much nowadays.


Who said anything about financial possibility? All I'm saying is that if housing prices are inflated relative to rent levels (say a 3-bedroom apartment can be rented for $600/month while a 1,500 SF home sells for $800,000) you may end up losing big money in the long run. Don't forget that housing prices do not always go up quickly, and in fact they sometimes go down. In addition, real estate taxes in many areas can be substantial. Ultimately it is a mathematical decision that must incorporate dozens of variables, many of which involve making assumptions or predictions about future trends and personal needs.

For now I would rent. Prices are coming down slowly and it'll turn into a buyer's market.

It depends where he is living. I don't think prices are coming down. Perhaps, the dramatic increase is slowing (though not in my area), but I highly doubt homes in Jewish neighborhoods will decrease any time soon. Buying is almost always smarter.

Is he talking about buying or renting in Israel? That could be much different than in the US.

This Economist article is essential to understanding the cost benefits of renting Vs buying.

http://www.economist.com/finance/displaySt...tory_id=3722894

I would like to remind everyone here that this is an aliya thread, thus we are talking about Israel real estate. There are a couple of things to take into account.
1. A new oleh gets a one time special mortgage rate.
2. A new oleh is usually picking a place to live based on one or two visits, and talking with a handful of people, it's really hard to commit to an area for the long term if you really have not experianced living there.
3. Down payments are usually 30% rather than the 10-20% you get in the US.
Given all of that, ownership is still a better investment stratagy in terms of where your money is going. I was just wondering if any of our H.com olim were willing to share their experiance.

Justjew, you are making a smart move of making aliyah to Eretz Yisrael!

Thanks justajew... well for this oleh it was an easy choice... rent of course! But that's just because I'm single... if I was coming as a family I think I might want to buy. There is definitely something special about owning real estate in Eretz Yisrael! Also most families that make the move do do their homework and pick an area than suits them (something like 70% - if not that a high number - of Olim with NBN end up in Ramat Bet Shemesh I heard and are happy there.) And in Israel when you by a home most people stay put for a long time. There's really no reason to move to another city.

That said even I have thought about maybe buying here. There is only one Eretz Yisrael and therefore real estate is going up everywhere! So it may be a good idea just from an investment standpoint.

Yeah we already checked out RBS, it's not for us, too chareidi

From a value standpoint you are right, with two exceptions.
1. One of the most important numbers to a real estate deal is the cash-on-cash return. The less you need to invest the better basically. You only get the mortgage and arnon break once, so if you sell, the next place you buy is going to take more cash to complete the deal.
2. Depending on where you buy, the value will be hampered by speculation of what the government is going to try to do over the next year or 2. If you buy a place in Tel Aviv, you can bank on some appreciation, but in Ginot Shomron, it's really a bit of a crapshoot.
That being said, everywhere I am looking I will eventually be considered an obstacle to peace.

Are there places in E"Y that aren't an obstacle for peace?

Have you already made aliyah? Are you limited to certain areas by job possibilities? Are you interested in city or yishuv?

If you don't have school age kids you can come, rent anywhere for a year and look for a permanent place.

I'm all for buying as quickly as possible, mainly because there are few long term rentals and moving every year is not fun. Economic models have their place, but rent/buy decisions also have to factor in whether you can stay in the apartment or not and there are no guarantees on rentals.

I live in an obstacle to peace.

In Israel always buy. There is no advantage to renting. None at all. If your oleh mortgage covers the full price, you will pay less than rent for sure in the city. You can put up all your cash and have nothing to show. Mortgages are also transferrable if you decide to move before the mortgage is paid off. You can refinance or transfer the old mortgage, which ever is a better deal. It is easy to do if your co0-signers still trust you or you can find someone else.

There are 2 options for buying. If you are interested in one of our obstacles you can either buy there cheaper or buy a place in a good rent area, rent it out and use the income to buy in the yishuv (or get married, BM or such). The other is just to buy where you want to live. Some yishuvim have a good resale value.

In some cities the arnona, city tax, is the killer more than the mortgage. You have to pay that while renting, too.

I bought a very cheap apt in the city after leaving maon olim. I have managed twice to trade up to a house. The people who are renting are having a lot more trouble - rent always goes up.

Another trick. There is always an up and coming charedi new couples neighborhood that sells all apts for under a certain price because of an order from the badatz that parents may give only so much. Usually in less than 5 yrs the value of these places double. It happened in Bet Shemesh and Betar. It will happen soon in Tel Tzion. I would invest there if I had the gelt.

I would not pick a place on a few days, though.

The only thing with buying in Israel is that you have to put down AT LEAST 30% of the price as a down payment, if not more. Not everyone has that much cash. So not everyone can buy.
It's not like in the U.S. where you can buy with 10% down.

Also, housing prices to buy in Israel are quite expensive, whereas renting tends to be comparatively cheap, compared to New York prices for example.

To buy a 2 bedroom apartment in many parts of Jerusalem might cost you at least $200,000. So you would have to put down at least $60,000 and with a $140,000 mortgage, you would probably have to pay almost $1000 a month to pay off the mortgage. That's hard to do on an Israeli salary.

However, to rent a 2 bedroom apartment you might only have to pay $500 or $600 at most in rent.
That's easier for some people to manage.

Rikal--there is one advantage to renting (this is a general principle): If you're not sure where you want to buy, 6 months or a year's rent is a good investment to make sure you like the area before committing yourself to a mortgage. You might think that Neighbourhood X is perfect, but live there for 6 months and see you'd rather live in Neighbourhood Y. Also, if you don't have a job lined up before you go, renting allows you to be flexible.

shaya_getzl asked a good halachic shayla about ribis which I split into a new topic. - P

Har Hamenuchos.....