Rent or buy in Champaign (occupying home for two yrs) (Chicago: real estate, renters)

[therais]

We are living in SF bay area currently and are planning to relocate to Champaign, IL for two years. Some real estate agents suggested us to buy a house and they can help us rent it out when we move out. They say this is a good time as the housing prices have bottomed out and it should get better in 2 years. We plan to sell the home after 4 yrs or so depending on the market.
Can any of please suggest if its a good idea to buy a home there or no?
Thanks a lot!

[locoloco1]

First of all, in general, the national housing market is down, so I guess it's a relatively good time to buy. Urbana property tax is slightly higher than in Champaign, if I recall correctly. Both cities are nice in different ways, and I think Urbana has a bit neighborhoody feel to it.

Rents in a college town may be somewhat high in general. I know my building was half empty in the fall. Also, since the housing market is generally down, rents stand a chance of being lower/competitive, since renters could simply switch to buying. I had good luck negotiating the length of my lease (in Champaign), but then again I am an unintended long-time renter, so that might have given me sway with my landlord.

With it being a college area, as an owner you would have the potential for a more or less steady potential for income from renters, should you decide to rent out. I'm sure there are some local families that do this for supplemental income.

The agent is obviously suggesting ideas in their interest. They BELIEVE the market will improve, but there's no guarantee. Of course, they would be glad to manage your rental for you and take their commission.

There was a housing boom in southwest Champaign just as the national market went down. There is currently some agonizing over where to build a badly needed new high school.

Personally, if your 2 year outlook is a hard number and you're definitely not looking to own property here, or you're really not sure of anything, renting is probably your answer.

[Kalbo]

Rent.

[linicx]

Champaign has 35,000 stidents and teachers. It is no better nor any worse than any other college town its size. That said... according to what I heard last week in a discussion of the current economic downturn is the housing mess won't hit bottom for two more years and it is not expected to stablize in most parts of the US for an additional 5 years. I believe it. My mother was a realor for nearly 40 years and I learned to read housing indicators well. The housing market was in trouble long before 2005.

Realtors want to pay their bills and eat.

I would rent for at least one year. I think it is risky for you to buy a house now for a couple of reasons.
1. Champaign will be culture shock. You're moving from the Bay area into thousands of acres of corn and soybeans. IL is the #1 and #2 producer of beans and corn plus a heavy contributor to the Livestock Belt.
2 The three largest rivers in the state are the Illinois River, the Mississippi River that feeds it, and at the Confluence of the Mississippi and Ohio Rivers at the southern border of the state. The largest body of water is Lake Michiban. The largest inland Wetlands in America is about 13,000 acres. None of it is near Champaign.
3. The nearest city where you can find TJ's, Costco and Whole Foods is St. Louis or Chicago.
4. Real estate taxes are not as high as California, but it is hefty.

If you rent for a year, at the end of your lease you will know whether or not you want to invest in a home and where. The one thing you do NOT want to do is invest in a home as a rental unit unless you are buying it as an income investmentr. Generally speaking, this type of building devalues a neighborhood if there is no other leased housing.

[Slinkycat]

Rent. Housing market is deteriorating if you haven't noticed. You wont be able to sell your house for anywhere near what you paid for it. Housing prices are declining about 1% month, nationwide. For a 100K house that's a 1K dollar loss a month. So at the end of 2 years, assuming this stays steady (plenty of market evidence that it will stay that, or worse), your asset loss assuming you would be able to sell your home would be 24K. Add in cost of maintaining the home and all that, probably more. Then you have the problem of selling it after 2 years. Is it worth it? You can get by cheaper by renting.

[Mr.Nick]

If you got cash around and can purchase a home with no mortgage then buy..... If you're going to put 10% down in this market then rent...

[Mr.Nick]

There is no way homes can dip below what they are at now..

We're at rock bottom right now.

[Drover]

Originally Posted by Mr.Nick

There is no way homes can dip below what they are at now..

We're at rock bottom right now.

I remember hearing that about this time last year.

If you're only going to be there for two years... rent. Even if the market trends up 2 years from now, with all the fees and expenses associated with selling a house you'll be damn lucky to break even after 4 years. Not to mention being a landlord is hard enough when you're not doing it long-distance.

[Sheila88]

Looking so see if anyone has an opinion on where to buy a house in the Champaign Urbana greater area. We are moving in the spring. Also, I've read some threads about not living near lakes because of tornados. Are there alot of tornados there?

[Drover]

I'm not sure what lakes and tornadoes have to do with each other. Tornadoes kill people a couple people in any given county probably once every 10 years. There are things you do in your day-to-day routine that have a better chance of killing you that very day than a tornado does in your entire lifetime.

Also, you have given absolutely no information from which to provide an informed response. What attributes do you prefer in your community and/or built environment? Family-friendly? 20s singles scene? Do you want to live in Champaign/Urbana or in a small town? Or maybe in a farmhouse? What's your budget? Do schools matter? Where will you work and how far are you willing to commute? Et cetera...