Buy or keep renting? (to rent, loan, how much)

[nomadness77]

Hi, I just moved to the area around 10 months ago, and haven't really looked around too much, but after realizing how much money I have already put into renting, I was thinking about buying. Here's the catch... I plan on moving out of the area in another year or so. Is it worth buying a house, or should I keep renting, considering the market is not doing well and probably won't improve much in the next year? Would greatly appreciate some feedback!

Thank you!

[saturnfan]

Definitely keep renting if you will be leaving so soon.

Days of rapid appreciation are no more.

[AppGirl82]

Not to mention--that's a ton of work to do in a year. Two moves are no fun and its doubtful that you'd recoup your out-of-pocket costs within just a year.

[DanielChang]

Originally Posted by saturnfan

Days of rapid appreciation are no more.

No one can predict with a 100% degree of certainty that rapid appreciation won't take place. However, it is very unlikely. If you will be selling soon, please consider

1. paying associated costs involved with moving,
2. getting a loan/closing costs, etc.
3. fixing it the way you like it,
4. the commission when you sell,
5. fixing all the new repairs the buyer's home inspector is going to find
6. then paying associated costs related to yet another move.
7. and IF (a really really big IF) ... you end up making money on it, you have to pay capital gains, since you haven't lived there a minimum 2 years (2 yrs out of 5 rule).

Hmm ... did I leave anything out? It may not be worth the hassle and may end up costing you money.

However, if you purchase a house below market value (or a house that has a high ARV) and are able to improve it (rehab, renovate, or otherwise add value), then it might be worthwhile. Still need to consider the above, however.

[VickiR]

Originally Posted by nomadness77

Hi, I just moved to the area around 10 months ago, and haven't really looked around too much, but after realizing how much money I have already put into renting, I was thinking about buying. Here's the catch... I plan on moving out of the area in another year or so. Is it worth buying a house, or should I keep renting, considering the market is not doing well and probably won't improve much in the next year? Would greatly appreciate some feedback!

Thank you!

Where IS that crystal ball?!!

In the last 30 years, Wake and Johnston Counties have averaged appreciation of about 6% per year. If you purchase a house and plan on moving within a year and you DO get your 6% appreciation and your tax deduction, when its time to move, you are going to have to pay Realtor's fees and taxes. Will you make money? Probably not. Break even? Maybe not in one year, unless you got a really great deal but possibly in 2 to 3 years. I'm not sure even in a great market selling after one year would be financially a good idea. You may want to check with your CPA.

Vicki

[SP2SCV]

Originally Posted by nomadness77

Hi, I just moved to the area around 10 months ago, and haven't really looked around too much, but after realizing how much money I have already put into renting, I was thinking about buying. Here's the catch... I plan on moving out of the area in another year or so. Is it worth buying a house, or should I keep renting, considering the market is not doing well and probably won't improve much in the next year? Would greatly appreciate some feedback!

Thank you!

I was able to do okay after 2 years, but 1 year would be quite a stretch, unless you got one great deal. In that short period of time, you probably would be best off just finishing up renting. I never buy knowing I have to sell in a certain time period. I always buy and then let the market tell me when it's time to sell.

[dansdrive]

I would suggest you look at any one of the number of on line calculating tools for the Rent vs Buy decision. Here is one that using a lot of data you should have to tell you if it makes sense to rent or buy with the time period you are looking at. It is hard to make a financial case to buy a home for a year or two when you calculate all the cost involved. The tool will help with the decision but ultimately it will be your to make.

Rent vs Buy Home Finance Calculator - Move.com

[nomadness77]

Thanks all for the great information. Unfortunately, I would be a 1st time home buyer, and according to all that you guys have said, renting is the way to go for me. I might even end up moving out before a year, so putting in around $12k (in rent) for the next year might be actually worth it.

Thanks again!