Post # 1
I am a second year medical student so there’s a very good chance I might have to move in 2.5 years for residency. Darling Husband and I really want to stay in STL for residency and I will try my hardest to get into programs here (there’s only 3) but there’s just no guarantee.
We’ve become pretty miserable renting, living in close quarters with people who have no consideration for their neighbors just plain sucks. Since we’re both students though and only get 1k in income a month we haven’t thought about renting before. I have about 1.5k a month in student loans (one’s that are supposed to go towards living expenses) that I currently use towards our rent but can just as easily be used towards mortgage.
Rent is $805, the houses we are looking at are $100k or less, and we have 3-5k available for a downpayment. The hardest part will be getting approved for a loan since student loans don’t count as income. I think we’ll be asking my parents to buy the house for us and then we’ll be in charge of all the financial stuff. If anyone knows any other way we could buy a house without my parents or if there are options for cosigning the loan, please let me know!
Our plan if I have to move out for residency is to try to sell or rent it out since there seems to always be students looking for cheap homes to rent by school. We would probably have a professional landlord company look after it.
Can someone please give me some advice on this whole process?
Post # 3
- Wedding: November 2013 - St. Augustine Beach, FL
@lilek22: If you don’t plan on living in the house for at least 5 years, it isn’t worth buying. Maintaining a house you own in one state while living in another state is a pain in the rear unless you spend extra money to hire a management company. Then all of your money is tied up in a house you don’t live in.
P.S. If I were your parents I would be pretty pissed to buy you a house that you only plan on living in for 2 years. A lot of things may change once you take your residency, especially if you have to take it in another city and/or state (which is highly likely.)
Post # 4
- Wedding: August 2013 - Rocky Mountains USA
@beachbride1216: +1. Not worth it unless you’ll be there for 4+ years. Plus, it’s tough to be a homeowner when you’re on a low income, because when things go wrong, YOU have to pay for them! Not to mention, it takes a lot more time to deal with, which I assume you don’t have much of as a med student. It sounds glamorous to own your own home, but it’s a lot of work and money. I’d just hold off til you’re settled somewhere.
Post # 5
Renting out a place you own is not nearly as simple as it would seem and unless you’re in a highly desirable area (which I’m guessing not for 100k homes) it could be tough to sell in a short amount of time. My parents became landlords after inheriting a property and the most normal tenants you would never think would cause issues have cost them so much money and hassle and now they’re receiving legal threats…not worth it. Add in the possibility of living in another state than the property and you’ll have to factor in the cost of hiring laborers if even minor things happen to the property while you’re in your residency. If you’re serious about buying I would talk to a good realtor about resale value and turnover time before you get your heart set on anything but IMO it’s not worth it for 2.5 years and I would rather focus my efforts on finding a better place to rent.
ETA: can’t attest to anything involved with having a professional landlord company rent out your place, but I still think it’s more hassle than it’s worth for such a short amount of time.
Post # 6
If you’re not happy where you’re renting, look for another place. In my area, you can find houses and condos for rent pretty easily, so cramped apartment complexes shouldn’t be your only option. Buying really doesn’t seem like a good idea in your case.
Post # 7
- Wedding: May 2013 - Pavilion overlooking golf course scenery, reception at banquet hall
I would strongly recommend renting if you do not know where you will need to live in 2.5 years. Anything shorter than 5 years and you are probably not going to come out ahead, in terms of closing costs for both buying, selling, and buying a new house in the new place 5 years later.
The old saying that renting is throwing away money is a myth. There is a LOT of money being equally “thrown away” in owning that you didn’t have to touch in renting: i.e. property taxes, homeowners insurance (is like 10x the cost of renters insurance), lawn care, home maintenance, and most of all interest. Take a look at an amortization table: I plugged in a random STL zip code, 100k, and the default interest rate (though a 3-5% downpayment is pretty low and will hurt you a bit) and you’ll see that it isn’t until approx 2030 that you would be paying more principal than interest. There is *so* much interest “thrown away” and you will not make much equity in such a short time. Buying a house should be a decision made for the long haul, when you plan to stay in that house for a long time.
I also think asking your parents to buy you a house is very extreme just because of apartment neighbor issues. If you are bothered by neighbors, renting a house could be an option?
Edit: I’d also like to point out that when something breaks it is of course on your dime to pay to fix instead of the complex’s maintenance team. I am literally right now sitting 10 feet away from contractors fixing my bathroom whose shower was leaking/black molding so we had to demolish it and the surrounding walls and rebuild everything. It is looking like it will end up a $7k “surprise” expense. It sucks because we were hoping to use that money for vacations and fun things like a hot tub. Ohhhhhhhh well!!!
Post # 8
I wouldn’t buy unless you knew you were going to be in the house for 4+ years.
Have you looked into town houses to rent? You might find a larger one than an apt and have more space and privacy.
Post # 9
I would never buy a house that I plan on living in in less than 5 years. You never know if you will be able to rent out your house to make up for the money when the time comes. I also think that if you aren’t financially ready to buy a house yet that you shouldn’t even if your parents do offer to buy the house for you. If you have no clue where you’re going to be in five years let alone 2.5 I wouldn’t put the money into it. If you are that unhappy in your rental you should look into renting a single family home, or at least find a complex where neighbors are a bit more respectful. I grew up in a single family home, and we still had noisy neighbors that you could hear even though the walls aren’t attached. The grass isn’t always greener on the other side!
Post # 10
Maybe you should wait to buy for a little while just to be safe.