Renting Is Cheaper than Owning a House

19

Things can get pretty crazy when you start adding the numbers and actually looking into your expenses. That’s what I was shocked to find out over the weekend when I took a look at the numbers of our housing bills over the winter (which seems to be over now in Romania as we’re getting to 68 degrees for the past few days). To put it short, I realized that renting would be cheaper for us over the winter than living in our house. Absolutely incredible.

I called it the Romanian paradox. I don’t know if it could be the same in other countries.

So here’s the current situation: we live (my wife, my 8 months-old son and I) in a house that we share with my mother, but we pay for all our expenses. We have two rooms – the nursery and one that’s the master bedroom slash office slash living room, one bathroom, one decent size kitchen and a couple of hallways (yeah, pretty strange!) Just like most houses here in Romania, we use wood to heat the house during the winter. We don’t have central heating, but terracotta stoves (I really don’t know if this is their correct name but). One per each room, plus electrical heating for the bathroom and kitchen.

I don’t know if you are aware, but apart from the actual costs per month to heat the house, splicing wood isn’t the nicest activity in the world. I did this the entire winter – and for two terracotta stoves, I needed to splice a ton of wood, then carry it to the rooms, then take a break and do it again. I have to climb 26 stairs in the process and since I usually start the fire around noon, I never got to nap a single day during the winter (because you have to take care of the fire, obviously). It was an activity that ate my soul and didn’t help at all with my back pain problems. It was horrible and this thing alone made me hate winter in my house.

But it was cheap, I said, so it was worth it. This weekend, I decided to check out just how cheap it was and found out it wasn’t at all that cheap by Romanian standards: about 1,600 EUROS ($2227) for the entire winter. Why I though it was a lot cheaper? Because the wood that we purchase for heating is extremely cheap – at about 185 EUR ($260) for the WHOLE WINTER, for two rooms. However, the electrical heating is killing us. Not only that we use it exclusively in the kitchen and bathroom, but we also use it for a couple to a few hours per day in our rooms, because terracotta stoves don’t give you a constant temperature and as soon as you stop feeding the fire with logs, it gets cold (and if you feed it too much wood, it gets insanely hot).

So I said to check out some rental offers in the city where I live in. I was shocked to find out that for 200 EUR (about $278) per month we could find a two bedroom apartment for rent, that would leave us about
$560 for the heating of our apartment, which might be just enough for the whole winter (maybe slightly lower than the actual costs). But for this price, we’d get more rooms, better overall heating and no more steps for me to climb carrying tens of kilos of wood, no more starting fires and some extra naps for me during the winter. A deal that sounds absolutely awesome!

And absolutely incredible. I find it outrageous that owning a house is more expensive than renting a flat. Why is this happening? Mostly because we, unlike many other houses in Romania, use electrical heating a lot (and it’s very expensive) and second because part of the costs for heating are supported by the government (which is not the case for house owners).

So… this year we might rent out a place and leave our house out in the cold.

What about you? How are your winter costs and do you think it would be cheaper to rent instead of owning?

Photo source: Historias de Cronopios

19 COMMENTS

    • My entire life I thought that renting has to be more expensive than owning a place (in our case, we don’t even pay a mortgage!) so yeah… it’s good to have these revelations later than never, clearly :))

  1. I think it’s a great idea to rent for the winter. I can imagine how tiring the wood cutting and stairs get old pretty quickly, and you save money too? Sounds great. It would be like a staycation. I would do it, but then l am super lazy!!!! ;0))

    • It was very difficult with the wood cutting this year and I said that I will never do it again. Before Baby Romanian came, there was just one fire to take care of and it was pretty easy but with two it’s demonic work :))

      • Hi — new moms and dads always believe that babies do better in a private room where noise and light (heat) can be controlled. As a very very old mother who has tried both experiments (quiet private room v. out in the open with people all around), babies sleep when they are tired.

        Now that he’s used to quiet, he might be cranky the first couple of days you bring him into the same warm room where you live. But like everyone else, babies adapt.

        You don’t need two fires all winter long. You need a place where you can make it less bright (dark actually IS conducive to sleep) but not necessarily less noisy.

        Go Romanian! I doubt seriously that every child there has a private room. We all lived without private rooms for centuries and never woke up wondering why everyone had left us.

        • It’s true about not having your own room. For 12 (or was it 14) years I slept in the same bed with my grandmother, and I won’t complain today 🙂 However, the fires are a must as temperatures will quickly go to 3-5 degrees Celsius during the winter in an unheated room.

  2. Renting gets a bad rap here in the states, too. But if people actually ran the numbers, they’d find it’s cheaper to rent than to own in a lot of cities and situations.

    I like your plan to rent! But do you have to worry about frozen pipes if you don’t heat your home all winter?

  3. Here in Australia, we renters get a bad rap, and at times are treated like second class citizens, because “we are not living the Aussie dream”. That is owning your house. The only things that are different here is that renters don’t pay land rates, and you only pay a proportion of the water bill. Apart from that, you still pay the electricity and gas, etc. the same as everyone else. I have been renting for over 20 years, and look after the house I live in as if it was my own. Sure, there is a minority who don’t look after their home, and that’s where all of us renters get the bad name.
    In summary C. I would rent rather than buy. At least you can change location if you don’t like the neighbourhood. But it is hard to sell up if things don’t work out. Save your back, get some shut-eye, and rent mate.

  4. Yeah, renting is definitely cheaper here most of the time, but then again, there’s the tax breaks and the equity being built up, etc. Our heating costs were ridiculous this year; Nearly $600 for each of Jan and Feb!! We did do a ton of wood chopping this year and you’re right – it’s grueling work, but the wood is on our own land so it’s free. However, we didn’t get the wood stove installed in time for winter. It’ll be interesting to see how next winter pans out for heating costs once we get the wood stove in. Last year we spent about $3,000 for all of our energy costs for the year. With just Jan and Feb bills alone we are over $2,000 due to extreme cold weather here. Yikes. 🙁

  5. I should add that the reason we’re already up over two grand is b/c the $600 bills were electric bills, and the rest was for propane tank fills. We have a dual heating system here and have been using the electric because it was cheaper than propane this winter, but we still have to use the propane for hot water and heating the garage/garden house.

    • Yes, there are so many costs associated to heating up your place. Good thing that you have your own wood though, that’s certainly a nice bonus. Because $600 for heating is… yikes! :))

  6. Hello “C”:
    With that kind of a workout, you save a lot on a gym membership, eh?
    So, I have some questions for you, if I may?
    What are the sources of Romania’s electrical power? Is there mix of hydroelectric (dammed rivers) hydrothermal, wind, solar? Does Romania “buy” power from other surrounding countries?
    Also, you said approximately US$278 per month rent for a two room apartment, and US$560 for, say, three months of electricity (including heating)? Still, you have to pay for water, cable, internet, phone (landline), sewer, garbage, etc., right? Also, don’t some apartments have gas heating, so that would be more, yes? Then there is the common fee(?) which pays for building upkeep, rehab, manager salary, etc.?
    Thanks for any clarification!
    Your friend in the USA,
    ~Teil
    (See you in Sibiu or Oradea;-)

    • Hello Teil,

      What I save on gym memberships, I spend on getting my back fixed, so it doesn’t work that good :))

      The $560 was for heating only, for the entire winter (I calculated 6 months of winter) and that would cover some other expenses too – apartments in Romania pay a general fee called “intretinere (maintenance)” which covers heating, garbage collecting, sewer, building’s upkeep and so on. Apartments pay heating separately here in Romania. For an apartment, the average cost of the electricity is somewhere between $16 to $31 per month. Cable, internet and all the rest are paid for at my house too so I didn’t take them into account as prices would be the same.

      Regarding the electrical power, I don’t really know how to answer that question. I know for sure that we have hydroelectric energy as I live near our main producing energy facilty, but I really don’t know about the rest.

      Very few apartments have gas heating here and those who have install them personally pay less.

    • Hi — I looked up your question about prices and found a couple of interesting charts. Tiny URL: http://tinyurl.com/lkf5s5u I opened it in my own browser and it’s a European Union site that will not cause you problems. Wiki is good on the general mix of energy.

      Energy prices in Romania are cheaper than most other European countries. That having been said, the largest price jump for energy occurred in Romanian in 2013 (see chart above).

      My suggestions for both of you since energy costs are also a problem in the states: make sure you use lots of plastic around windows, and/or heavy curtains (even heavy pieces of material on the coldest days will help a lot). Look for places to save — if you’re cooking on a wood stove, that will save costs. Make large rooms smaller with material and hand-made screens. Sleep in a cold room under blankets and wear a hat and sox. Wear a hat all winter long. No one will notice your hat hair and your body won’t work as hard keeping you warm. Open your blinds when and where the sun can help you heat. Close them quickly as soon as the light changes.

      As for you C: I would rent out the baby’s room as long a he is little. Put away the money in case the energy costs don’t go down. (10% of all energy in Romania is purchased from Russia — the rest is home “grown”).

      • Thank you for the great advice on how to reduce energy costs! I actually wear a hat for a long time during the winter and I have no problem with the hat hair since I always keep my hair really short 🙂

        Renting the baby’s room is not an option, unfortunately. We live in the same house with my mother and she would never agree with that, plus renting just a room within a house is so cheap (if we’re lucky, we could get $50 per month) that, again, it’s not really worth it if we consider any potential damage the renters could make. But it’s true, energy costs are expected to rise again in 2014, just as gas costs…

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