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would you buy a house if you weren't going to be able to live in it for a year? we have $$ in the stock market, but it's up and down, up and down - so we were thinking of putting it in a house instead; but it will sit empty for a whole year. we have family in the area that could check on it for us, but there's the yard to take care of as well. not to mention anything else that happens while we're not there. should we spend our money to invest in a house (we'd probably keep it for at least 3 years, maybe longer).
i also need to start a business soon and will need some cash.
or should we just move our money to a more reliable but lower interest account to make sure it will be there when we need it in a year? or leave it in the stock market and hope for the best?
Are you paying cash for this house? You will have a hard time finding a lender that will finance a house that you're not going to live in within a certain time frame. Also, your home insurance carrier needs to know that the home will be vacant instead of occupied. That has a bearing on whether or not you can get insurance coverage on the property. Any chance you could rent it to a family member or someone you trust?
Some good advice already, I'll add my two cents. A house that sits empty for a year is not a good thing in any way. Even though someone will "check on it" for you, they aren't there twenty-four hours a day. They may not be there once a week. It also isn't their house so they won't check as closely as you the owner would do.
Pipes can break, the roof can leak, vermin can move in, any number of problems. I know it may sound silly but a house really does need a companion to tend to it. Left alone they start falling apart.
thank you wendyk! we could pay cash for it. that's part of the problem though; we have that much in the stock market (we would have about $130k left after we bought the house), but that wouldn't leave us with very much cash for when i need to start paying for a dental practice. i guess i should have included that i don't have an income right now and we're moving for a year for me to do a residency. we'll both have jobs for the next year, but not paying anything at all really. then once i begin working at a practice, i'll start making money and we'll need to probably put a down payment on a practice either immediately upon arrival or within the next couple years. we'll also have practice payments to make.
Last edited by tiger04dmd; 05-08-2008 at 10:18 PM..
Reason: edit
good advice bazzwell. i'm really hoping the owners who live there now (of this one particular house we've seen) may want to continue to live there for a year and rent from us!!! wishful thinking, but you never know. i think it's kind of a short sale situation and she's a single mom w/ two kids; so maybe she'd like to stay...but that's neither here nor there. i completely understand what you're saying and you're right about needing someone to be there.
I had a couple that retired to our area 2 years out. They just moved here this month. They did have trouble getting insurance, but they did get it. They also rented their home out to people who moved to the area while these buyers were waiting for their home to be built (short term 3-6 mos). I just put them in touch with a rental management company and it worked out for them.
I would say don't buy right now. You have no idea what your income will be or for certain where you'll end up also, you may have a need for liquid assets when you're done with residency and a house at this time is definately not liquid. Get your practice up a runing before you dump most of your cash in a house, if anything pay off your business FIRST so you're free and clear and don't have that debt hanging over your head. I don't think you'll miss any major deals waiting since it's going to take some time for the market to improve.
Investments are great but not having debt is better and renting for a while while you figure out exactly what you want to do and where makes better sense at least to me...
We bought our retirement home and still have 2 years left until retirement. Our money that we had saved for so long was in an IRA and losing funds every month, we decided to invest our money in something tangible instead of the risk of losing it all in the stock market. We do not regret our decision. I spend summers up there and my DH comes up 4 times in the summer until he retires. We feel very comfortable with our decision to buy instead of watching our money trickle away.
In general terms - buying a house today with the instability in the housing market (not sure about YOUR area - but nationally) is likely NOT the best use of your money. Now, there may be exceptions to that if this is your dream home and it is perfect in every way and there isn't another one like it...and you are going to live in it (eventually) for a long time...
While current interest rates may offer you a good hedge against eventual changes in the mortgage rates - when you calculate the opportunity cost for what else you COULD have done with that money - and the short term potential for appreciation - I'd recommend that you do something other than buy a house that is going to sit empty.
But...I'm a REALTOR and not a financial planner (which is probably who you SHOULD be asking this question of).
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