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Which is one of the biggest fallacies out there, along with "I know how to time the market."
Agreed, especially if you're talking about shorter time horizons. Over the 30 year life of a loan? Yes, home ownership has historically provided a nice return. But if you bought in 2006 and tried to sell in 2011? There was a good possibility you were underwater in many markets. With the expected increase in interest rates (a question of WHEN, not IF), we may well see a correction in home prices over the next five years. That could totally screw the OP's moving timeline.
First, decide how long you’re going to stay in this area. Buying tends to be better the longer you stay because the upfront fees are spread out over many years.
You said that buying is cheaper. But do you know that a home comes with a surprising variety of expenses that renters do not directly pay?
There are a lot of other issues, such as interest rates, down payments, taxes, that should be considered before making such a huge decision.
Friends in graduate school bought an older home in a decent mobile home park. They fixed it up a bit and sold it two years later for what they'd paid for it.
Meanwhile, they had a decent place to live, no hassles about their dog, and an affordable monthly payment that covered garbage, sewer, landscaping, and maybe even water.
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This is the question I asked myself as well. I'm under contract for a home that's going to put me at around $415/month, which includes PMI, taxes, and insurance on a FHA loan. I don't plan on staying here longer than 4-5 years, and I plan to convert it to a rental at that time. At that time, if I have the money saved up, I could potentially refinance into a conventional and get out from under the PMI insurance.
I have a cheap apartment right now, but it doesn't have central heat and air. I've lived with a window unit for almost 5 years, and this property really needs two window units. I was looking to upgrade my living space to get an extra bedroom and central heat and air, since my current apartment is a 1/1. Rents for a nicer complex, house, or duplex started out around $575/month.
It became a no brainer for me to buy, since I could have my own space, not pay a pet deposit, and not have a neighbor directly above me or to the sides of me. The hold back would have been finding the right house, in the right neighborhood, that accommodated my needs.
where is this utopia you speak of? You can't find a studio/efficiency in my area for that low and I'm not in a high priced market.
I'm in Arkansas. Rents are on the lower scale in this state, due to the low COL. The penalty is, there's less to do, since where I live caters more to family demographic. If you want theatricals and entertainment at your fingertips, this may not be the state for you.
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