Post # 1
We are currently renting an apartment, but after this weekend we’ve decided that we need to move. We’ve had people come into our backyard and steal multiple items, we’re surrounded by active gang members, we have had constant criminal activity go on outside of our house and we are not only sick of it but also a bit scared. I love our apartment itself and the rent is really cheap but there’s a reason it’s so cheap. So we’re ready to move but all the places that are similar in size to our apartment are $1100+ a month in rent and I feel like it would be crazy to spend that much a month in rent when we could buy and pay less! The thing is, I’m not sure if we’re ready to buy which is why I come to you guys. I’ve never been in any hurry to buy our home so I haven’t given it much thought. Here are some factors to consider:
– We both have good jobs and enough saved to put down a decent amount, but we’re also both in school right now.
– The area in which we would want to buy is at least an hour commute away from our jobs and school
– We both graduate in 2 years and we intend to look for different jobs after graduating. We’re not sure where we want to look for new jobs and like that we rent because it gives us the flexibility to move for a job after graduating.
So what do you think? Should we buy or should we continue to rent? Should we rent even if our rent would be higher than a mortgage? What would you do?
Post # 3
I think your lives could change too much in the next couple of years with new jobs. Not to mention, an hour plus commute is a long commute. It gets old really, really quick. Plus there is no guarantee where you will work in 2 years since you know you will be looking for new jobs.
So, no. I dont think for you two to buy a house is really a great idea. I think having the flexibility to get the best job for you and your careers would trump being confined to a specific area due to a house.
However, I do think you should move. Not sure you can put a price on safety.
You could try to rent something near where you want to buy to test drive the commute/location. You have more flexibility in renting so look around at different areas for cheaper rent. If you were willing to drive when buying a place, renting a place further out would also be cheaper likely.
Post # 4
@peasantsong: Unless you plan to be in the house for a number of years OR you feel really confident you can break even / sell for a profit if you need/want to move in a couple of years, then I wouldn’t buy right now.
Also remember that even though buying means you pay less per month and get a tax break, you’ll also have to pay a few thousand dollars in closing costs that you may not recoup if you sell after only a few years. You’re also 100% responsible for paying for any and all repairs and maintenance for the house – if the stove or hot water heater goes out, you have to buy a new one. If the roof springs a leak, you have to pay to get it fixed. So, ultimately, buying may be just as expensive as renting. Maybe not – but these are things you should consider.
Post # 5
- Wedding: October 2011 - Bed & Breakfast
You are not sure where you want to look for permanent jobs and settle down, so it makes no sense to buy. If you bought now, you would have to wait 7-10 years to recoup all of the fixed costs of buying (your closing costs, your selling costs, all of the routine home maintenance you will be required to pay for over the years, etc.). Do you really want to be tied to a house for 7-10 years? And make sure that when you look at the cost to own, you are factoring insurance, HOA fees, and property taxes into your monthly payments. A monthly payment is so much more than just the principal and interest on the loan itself.
Post # 6
You guys make awesome points. The only reason I even considered buying is because we have a pretty firm idea of where we want to end up and when we look for new jobs after graduating, we will be looking around that area. But there is no guarantee we will find jobs in that area and we do like that we have the flexibility to move across the country for a great job if that’s what we want. Also, I am aware that there are additional costs of homeownership that I do not have to pay as a renter and you guys make great points that even at $1100+ a month rent, I may still end up paying less per month than owning a home. My instinct is to say that we should continue renting.
Post # 7
It sounds like you really need to move, regardless of whether you buy or rent. I think you guys should wait until after graduation to buy. There’s so much that could change between now and when you take new jobs, including where you live. I also think that you would get a better long-term benefit out of staying flexible and finding the best jobs possible, whether they are inside or outside of your area.
Even if a mortgage costs less per month, do not assume that buying will have less expenses. Houses have maintenance costs, repairs, and property taxes to deal with. You may have to pay a monthly or yearly fee to a homeowners’ association. These are not things you would need to deal with in a rental.
Post # 8
I agree with the PPs that, with you both graduating in two years and needed to have flexibility for job hunting, being tied into a house probably isn’t the best idea for you right now.
Post # 9
I say no to buying.
You don’t have careers established yet. Not having 3+ years in your careers will, at best cost you a lot in higher interest, and at worst get you denied the loan.
Being an hour+ away from work and school is brutal and expensive. Especially if you are driving. I live about an hour away from my work and it is at the top of my tolerance range. ‘
Where do you live in Northern CA that your rent is only $1100/mo and you can buy for cheaper?? That is all kinds of crazy crazy cheap. You can barely rent a room here for $1100/mo, and not in a very good area.
Post # 10
@crayfish: I am actually very well established in my career. I have worked my way up in my position over the last 6 years and I am an older student (I am nearly 30) who decided to go back to school to get a degree in what I already do. We are both untraditional students. We live in interior N. California where the cost of living is much lower than it is in the bay. I live very near Sacramento, to give you a point of reference. We can definitely afford $1100 a month in rent, but a similarly sized home would cost us about $850 a month if we purchased. I feel like in one way it would be unwise financially to throw away so much money on a home we don’t own, but PP make completely solid points that the trade-off of being able to move somewhere for a better position more easily would make it worthwhile. Also, that commute is something I’d like to avoid for as long as I can. That certainly is a lot of driving!
Post # 11
@peasantsong: if you were to buy and then had to move away for jobs, could you rent the house out? and if you could, would you and your DH want to be landlords? that might be a good way to go if you guys are comfortable with that. if you couldn’t/don’t want to rent it out then i would say hold off on buying and just find another rental in a better neighborhood.