Well, it's interesting, because no one can predict how well they'll do when selling, whether they'll get $15,000. or sit on the market forever - things are still pretty volatile out there. But on the other hand they might be more relaxed not to have the place taking every cent. Have they considered refinancing? I agree that the long term view re purchasing again might not be too realistic, but maybe they'd get something less ambitious than what they have now, and be happier about it (sounds like they might have overreached to begin with... what else is new!). Renting-to-save though does seem like a bit of a dream because it is so hard to discipline yourself to save 'for the future' and watching the money go to a landlord is frustrating too. Have they considering renting out a room (after making sure it meets legal standards for renting)? A bit of a concern is that they had a third child unplanned - of course it can happen to anyone, but these days only teenagers should be that careless, and I wonder what it says about their level of all-round maturity considering their tight finances.

"I have always been told owning is better than renting."

Then you have been lied to. Financially, it completely depends on the relative price of owning vs renting. It is perfectly reasonable to rent a place and put the savings aside each month for a future goal. Unless you know the actual numbers, you are in no position to make a recommendation.

Besides, this is not just a financial decision. A man who works long hours, has 3 little kids at home, and a wife who travels - he may not went to spend the rest of his time on a fixer-upper and yardwork. When the wife is home, I'm sure she wants to actually see her kids and not get sucked into an endless home renovation. They also probably want to live in a neighborhood they feel safe in NOW, not one that might improve in 5 years.

Bill I see your point. The house they live in now is fine and doesn't need any renovations...they want renovations. You couldn't find a more safe neighborhood than the one they currently live in so I think what I am seeing is their expectations may be too high or they are financially worse off than what she is telling me. I usually don't offer advice, but in this case she continually asks what I think they should do.

What would be the difference between the rent payment and their mortgage payment. If it is minimal, then staying put would probably be a good idea. If there is a big difference between rent and mortgage, then selling and renting may be a good idea.

"She claims they want out of the area (feels crime is on the rise, and things in outlying areas are not so great)"

Doesn't sound like she feels the same about the safety of the neighborhood as you do.

Just a little reminder about people here... there are certain people who, no matter what the issue, no matter when, will always ask for advice, constantly wanting your opinion, etc. However, if you're patient enough, you'll see that it's a habit, and goes on all the time about everything, and in the end, they never seem to take anyone's advice, but go off and do their own thing anyhow. Don't get sucked in - or at least take it all with a grain of salt. It's flattering to be asked a lot, but also disappointing when the advice is ignored and guess what - they're grown-ups too, and will make their own decisions in the end (or should get help already!).

Owning is not always a better deal than renting, especially in the short term.

In the long term rents tend to increase while fixed rate mortgages stay the same (payment may change for taxes and insurance, but principal and interest are fixed).

No one rents houses for less than the carrying cost, though on a house rented for many years the mortgage payment may be many years old.

I often just break even the first few years of ownership in a rental house (before depreciation), but as rents slowly increase my fixed mortgage means the house starts having a positive cash flow, and when the mortgage is aid off becomes very positive.

They need to investigate the costs of renting very carefully and then compare it and ownership after taxes.

Renters who think they are not paying property taxes, mortgages, etc. are only fooling themselves.

It is built into the rent.

Even the cost of my insurance policy on the rental gets rolled in. It is less than a full up policy since it does not cover contents, but the renter should still be covering their possessions anyway.
My policy will pay me for repairing the house.
The renter's policy will pay them for the contents.

We recently bought a resale home. A month later, a bargain rental came up. The investment income I typically earn from the amount now tied up in a downpayment would have paid the rent, insurance and utilities on the rental home. But, of course, I wouldn't have had the pleasure of upgrading and maintaining a 50-year old home with an out-of-date floorplan while dragging a gaggle of kvetchers with me a daunting 15 minutes away.

IOW, it depends.

How to keep friends: don't give them any advice, even when they say that's what they want.

There are some people who really shouldn't own for various reasons. If she is gone a large part of the time, and he works long hours and they have kids with all the bites that takes out of time.....they could even be perfect for condo living. No 'unknown' expenses looming in the distance. No yard maintenance. No renovations. No commitments, other than a lease. They may have feelings off deflation for sinking money into an investment, only to see it turn upside down. They may really be craving for money in the bank and no debts. There may be a lot of things they aren't telling you, only just enough to get you to 'affirm' their already made up minds. Maybe they don't want to live near their relatives. Maybe they just need a change.

It isn't always dollars and cents.

"...they could even be perfect for condo living. No 'unknown' expenses looming in the distance."

Except those annoying 'special assessments' when anything major needs to be done.

Even if the reserves are their, they need to rebuild them after a major expense.

You can get slapped with special assessments on any property if you think of it. But, you do have a point.

I mentioned lease. I didn't say buy a condo unit, lease one. The assessments aren't the renter's problem. Short term anyway.