Moving to Boulder for 3 years... rent or purchase?

[lurtsman]

Please stop using the word invest.

Buying a property to resell in only 3 years is not investing. It is speculating. The two are vastly different.

If you have the perfect house where you live now, you should keep it. You can rent it out and use the cash flow to offset the costs from your own renting.

The housing costs in Boulder may continue to go up as the policies are designed to make it difficult to commute into work there, which drives people to want to live there so they don't have to deal with the "mass transit solution". If the mass transit were really working, Boulder prices wouldn't go up because people wouldn't be willing to pay a premium to avoid having to use the "solution".

If you know you are only moving to the area for 3 years, that is a very unique position to be in. I would have to think it involved a particular master's program at UC Boulder. Otherwise the time frame wouldn't be so clear. However, if you are moving from the Midwest or East Coast, you may find that Colorado is so much better than your previous area that you never intend to leave. In that situation, you would really want to own a house there.

Keep transaction costs in mind at all times, they are by far the largest factor in trying to buy and sell the house. Absent them, you would save enough on your monthly costs to offset even a significant decline. However, when you must pay the transaction costs, if Boulder changed their policies to not force people to live within the city (or suffer the ride in), the prices could drop and you could be be "underwater" on the mortgage.

[jaekn]

Also, Boulder is due for a 100 year flood. The recent flood we had here was not considered the 100 year flood. DO a little research regarding this flood, I remember my geologist professor warning people about buying in parts of Boulder.

[DressageRider]

Originally Posted by jaekn

Also, Boulder is due for a 100 year flood. The recent flood we had here was not considered the 100 year flood. DO a little research regarding this flood, I remember my geologist professor warning people about buying in parts of Boulder.

A 100 year flood is a flood that has 1% chance of happening on any given year, so Boulder will always be due, but the chance is slight. Obviously, if you are buying, you want to be aware of the flood zone.

[jaekn]

yes there is a 1% chance because we are due... Or so I thought?

[DressageRider]

On any given year, there is a 1% chance. We could have one this year, and there would be a 1% chance the next year. There are certainly areas that you should be wary of purchasing, but it is easy to look up the flood plain.

[Katarina Witt]

Originally Posted by jaekn

yes there is a 1% chance because we are due... Or so I thought?

It has nothing to do with being "due". We could have a 100 year flood (which refers to the magnitude of the flood) two years in a row. That doesn't mean there won't be another for 200 years. Think "law of averages".