[NY2Cairo]

Hi, I posted previously about our family's situation: 2 BR apt for young growing family? Under $900: Mission impossible?

Now that we are staying in Hartford for at least 1.5-2 years more (cry), we have narrowed our apartment search to Manchester. Problem is the rent will be at least $1000 and up! I would pay less on a mortgage! My mom thinks it'd be worth it to buy a house because 1) you always end up staying somewhere longer than planned and 2) it'd be cheaper, plus first-time homebuyer programs. I am worried about being unable to sell the house once we move, but she said that's only a concern for houses that were inflated to begin with.
My mom is pretty into real estate, so I don't know what to think. Anyone know about this stuff?


We have zero money for downpayment but my mom says she'd take it from her retirement (she's like that). I just don't want to be stuck in the house when I want to settle down closer to my family. On the other hand, I am tired of apartment living, a house sounds great.

[willow wind]

Before you even think about it more, spend some time next week talking to mortgage lenders. At least two. Find out if you're even qualified to buy a home.

A house is not only the mortgage, it's taxes, insurance, water/ sewer, plus the costs of maintaining it. Heating costs will be greater in a single family home than in an apartment. Something always breaks or needs fixing.

No one has a crystal ball to know what the real estate market will be in two years or so. It may go up, it may stay the same, it could go down. If you're lucky you might break even, after taking out the costs for the real estate commission you'd likely pay. If you're not lucky, you might not be able sell without a loss.

Do go get prequalified . If nothing else, a mortgage professional will be able to tell you what to do to be able to obtain financing, if not now, then in the future.

[Stylo]

I can say from experience that the costs of buying take a few years to recoup and break even. I don't think you can own a place for less than 5-7 years and make financial sense.

[NY2Cairo]

Even if one couldnt sell, one could rent and still make money that way, no? Open to all sides of this, really.

[Stratford, Ct. Resident]

Originally Posted by NY2Cairo

Open to all sides of this, really.

Is it better to rent something cheap, or is it better to just buy a cheap "manufactured" home and pay a lot rental?

I think if you're going to buy, but you really don't know that you will be here 3 years from now, i'd go with a ("trailer").

[willow wind]

In the price range you'd be looking, you'd not be able to make money renting it. If you were lucky, you might break even.

That is, if you got decent tenants, if you didn't have to evict anyone, if nothing needed a major repair, if you didn't have a rent loss while you were between tenants.

There is a fairly recent thread on this forum about being a landlord of a single family home. There's lots of info in it. You might want to try to pull it up from the search box at the top of the web page.

[Cambium]

Originally Posted by NY2Cairo

Problem is the rent will be at least $1000 and up! I would pay less on a mortgage! My mom thinks it'd be worth it to buy a house because 1) you always end up staying somewhere longer than planned and 2) it'd be cheaper, plus first-time homebuyer programs. I am worried about being unable to sell the house once we move, but she said that's only a concern for houses that were inflated to begin with.
My mom is pretty into real estate, so I don't know what to think. Anyone know about this stuff?

On the other hand, I am tired of apartment living, a house sounds great.

So much to say, so little time.

1. Your mom is right in the sense that real estate is the only way to put money in and at least get something back for it. (long term investment)
2. Staying longer somewhere doesnt mean it's ok to buy a house. There should be more reason than that.
3. Cheaper to buy a house than rent $1000/mth? No. I'll make this simple. If Mortgage is $1000. If Rent is $1000. End of yr 1 rent expense is $12,000. Mortgage expense is $12,000. Guess what, thats not the only home expense you have when you buy, so right off the bat rent is cheaper.
4. Dont buy the downpayment lower mortgage hype. You dish out $25,000 up front for down payment, thats 2 yrs worth of rent and there was no taxes, landscape or other expense meanwhile.
5. I am not against renting, not against buying. EVERY situation is different. If you can manage your money correctly, there is no doubt you save more by renting. .
6. If you plan to stay in a town/location more than 5yrs, if you have the funds to do it, grab a home now and forget rent.
7. Tired of apt living doesnt mean "buy" a home. Just rent a house. But it will be more than $1000 for sure.

Originally Posted by NY2Cairo

Even if one couldnt sell, one could rent and still make money that way, no?

Thats where you have to sit down for hours on end with pen, paper and calculator figure out your budget, a home price, the mortgage, taxes, expenses and see if rent will cover it all. You cant just say "rent and make money that way". A lot of times rent doesnt cover things.

[NY2Cairo]

Originally Posted by Cambium

Cheaper to buy a house than rent $1000/mth? No. I'll make this simple. If Mortgage is $1000. If Rent is $1000. End of yr 1 rent expense is $12,000. Mortgage expense is $12,000. Guess what, thats not the only home expense you have when you buy, so right off the bat rent is cheaper.

If the mortgages are several hundred dollars less than the area rent prices, then even with the costs of a home, it could come out even. Plus you built equity, instead of throwing money at a landlord all that time. No?

Honestly, I am leaning towards renting, but at the very least, looking at how much I'm throwing away for a 2 bedroom apartment is now giving me the impetus to begin to research homebuying. I don't even know where to begin. I suppose we should start saving for a downpayment (with our tons of excess money--ha....ha), but that could be years from now and there is downpayment assistance in the meantime. I am also looking at FHA loans and some towns will give you assistance in buying. At any rate, I'm definitely not going to wrap my mind around all this in the next 2 months before Baby #2 arrives...

[basehead617]

Never buy a place you're likely to only stay in for 2 years. The only way you won't lose money on it is if real estate jumps hugely, or if you're renovating something you plan to flip. Regarding the first scenario: not impossible in the next 2 years but not something you can count on. And you're not in the latter situation.

[Cambium]

Originally Posted by NY2Cairo

If the mortgages are several hundred dollars less than the area rent prices, then even with the costs of a home, it could come out even. Plus you built equity, instead of throwing money at a landlord all that time. No?

I'm definitely not going to wrap my mind around all this in the next 2 months before Baby #2 arrives...

When you say "home" do you mean condo, townhouse, SF house? When you say several hundred dollars less than rent prices what are the selling prices of those homes? Quick math says a home of $250,000 with a $40,000 down payment would be under $1000/mth mortgage. So are there homes for $200,000-300,000 there?

Like others said, if you're going to move in less than 3 yrs dont buy UNLESS you're willing to be a Landlord AND you know the numbers work. Baby #2 on the way, something tells me you need as much money in your pocket now, not in 20-30yrs.