Buy vs Rent question

[redguard57]

I would use padmapper as an more accurate gauge of market rent.

The answer to this is always "it depends."

In my area rents FAR outpace housing costs so it makes more sense to buy if you have enough disposable money for a downpayment. I pay $635 and my property would rent for $1000. This may not be true for your area. In my case I have VA loan eligibility which means no money down and no PMI.

You can do a lot of maintenance yourself and it's not as big of a deal as people here make it seem. Plus, landlords are not exactly going to do the best fixes - they will do bare minimum to keep the place standing. People are saying "OMG maintenance!" because they're comparing apples to oranges - meaning what an invested home-owner does with their house vs. an absent landlord who will go with the lowest bid and cheapest material every time.

I bought a former rent-house and the previous owner did practically nothing for 10 years except keep the place standing.

Interest rates going up will actually improve the rental market for landlords because fewer people will be able to buy.

[ocnjgirl]

Originally Posted by redguard57

I would use padmapper as an more accurate gauge of market rent.

The answer to this is always "it depends."

In my area rents FAR outpace housing costs so it makes more sense to buy if you have enough disposable money for a downpayment. I pay $635 and my property would rent for $1000. This may not be true for your area. In my case I have VA loan eligibility which means no money down and no PMI.

You can do a lot of maintenance yourself and it's not as big of a deal as people here make it seem. Plus, landlords are not exactly going to do the best fixes - they will do bare minimum to keep the place standing. People are saying "OMG maintenance!" because they're comparing apples to oranges - meaning what an invested home-owner does with their house vs. an absent landlord who will go with the lowest bid and cheapest material every time.

I bought a former rent-house and the previous owner did practically nothing for 10 years except keep the place standing.

Interest rates going up will actually improve the rental market for landlords because fewer people will be able to buy.

Did you read the part where she may only be in that state for a year? I am surprised people are saying buy for that short a time frame. I think you'd be foolish to buy without knowing where you're going to be living in a year.

[parentologist]

If you may move in the next few years, and it's not a lot cheaper to own, then rent. Only reason to buy in this scenario is if you expect the market to rise rapidly.

[ecsdude]

Originally Posted by Okey Dokie

Not sure where you're getting figure of paying $400 a month in principal for the first three years. That seems very high to me.

It does seem high for the first years.. I was using an amortization calculator, but I should double check the numbers...

In any case, I heard interest rates rose last week, so I may have missed my sub-4% 30-year fixed conventional window..

I might have to ride it out by renting, as others have indicated it's not a good idea to buy a property if i'm not sure i'll be in the area for over 1-2 or 3 years.. much less 5+ years.. plus since my intent would be to eventually rent out the property after 1-2 years or so maybe, and expectation is that the rent would merely pay my actual total monthly costs and help pay down principal, maybe it's not worth the potential complications and headaches.. plus i'd put myself at risk of dipping into the net proceeds from sale of my current house for any unexpected repairs or damages..

so with that in mind, where is the best place for me to park my money while not having it shrink in value due to inflation? I have about 80K to park and do something with conservatively so that it maintains if not increases its present value in the future.

I think that with interest rates going up, savings account interest rates will also go up, although I'm not expecting great returns from that..

btw, in the area near work, rent for 2bd/2ba apartments are like 1400-1700, and an additional 40-70 in pet rent for 2 pets. I might have to look outside of the city where I work, to find cheaper places to rent.

I did enjoy owning my house but felt that I should pull out the equity now for a rainy day fund, investment fund and fund for down payment on other property(s) down the road.. especially since i'm not sure I want to stay at my current job and not sure about its stability in coming years.. having a fund to fall back on relieves some stress and dependency on the current job..

one of my family members wanted me to keep the house, refinance and take out an HELOC but I didn't like that idea as much as taking my money off the table now while the getting is good.

Maybe the home value will continue to go up, but with rising interest rates maybe i'd have a harder time selling too.

[redguard57]

Originally Posted by ocnjgirl

Did you read the part where she may only be in that state for a year? I am surprised people are saying buy for that short a time frame. I think you'd be foolish to buy without knowing where you're going to be living in a year.

Oh I didn't see that. The New York Times has a good rent vs buy calculator where you can input the relevant data for your area. However, the over/under is always 3-5 years at least.

[honeynutcocopuffs]

The NYT's rent vs buy calculator:
http://www.nytimes.com/interactive/2...ator.html?_r=0

[bande1102]

Originally Posted by ecsdude

It does seem high for the first years.. I was using an amortization calculator, but I should double check the numbers...

In any case, I heard interest rates rose last week, so I may have missed my sub-4% 30-year fixed conventional window..

I might have to ride it out by renting, as others have indicated it's not a good idea to buy a property if i'm not sure i'll be in the area for over 1-2 or 3 years.. much less 5+ years.. plus since my intent would be to eventually rent out the property after 1-2 years or so maybe, and expectation is that the rent would merely pay my actual total monthly costs and help pay down principal, maybe it's not worth the potential complications and headaches.. plus i'd put myself at risk of dipping into the net proceeds from sale of my current house for any unexpected repairs or damages..

so with that in mind, where is the best place for me to park my money while not having it shrink in value due to inflation? I have about 80K to park and do something with conservatively so that it maintains if not increases its present value in the future.

I think that with interest rates going up, savings account interest rates will also go up, although I'm not expecting great returns from that..

btw, in the area near work, rent for 2bd/2ba apartments are like 1400-1700, and an additional 40-70 in pet rent for 2 pets. I might have to look outside of the city where I work, to find cheaper places to rent.

I did enjoy owning my house but felt that I should pull out the equity now for a rainy day fund, investment fund and fund for down payment on other property(s) down the road.. especially since i'm not sure I want to stay at my current job and not sure about its stability in coming years.. having a fund to fall back on relieves some stress and dependency on the current job..

one of my family members wanted me to keep the house, refinance and take out an HELOC but I didn't like that idea as much as taking my money off the table now while the getting is good.

Maybe the home value will continue to go up, but with rising interest rates maybe i'd have a harder time selling too.

You should talk to a CPA or investment advisor. Check credentials and references for the right person for you. Honestly? Right now everyone's chasing returns.