To buy or rent?

Question

Before you jump to conclusions, I'm not asking about the same house.

Instead, I'm asking about two seperate houses.

1) Rental home: $750/month : 2 bedroom, 1 bath, 1 car garage

2) Sis-in-law's home (they are going to sell in soon and asked us first): potentially $650/month (loan): 3 bedroom 1.5 bath, needs a LOT of repairs (her cats have peed over everything)

While my husband and I are leaning towards #2, especially since my mother is HUGE into flipping and is considering helping us flip this house over the course of a few years. HOWEVER we/I wanted some other opinions.

For #2, we would have to get an $80,000 loan and we have about $15000 in student loan debt (no credit cards, no car payments, etc) and make about $3000/month.

We also have a baby coming in August, so all we could do in the new home would be to put down new flooring.

Answer 1

BUY - BUY - BUY: Always buy, congradulations on the new one, BUY. Did I say buy, yea that is the thing to do. You will need a INDUSTRIAL cleaning of the property, painting, and cosmetics where needed.

This will be enought for the baby, and to get your finances settled. With sencible improvements over the next two to three years, you could make a good dent on the elimination of the school loan. Refinance of your home can eliminate the school loan altoghther and provide some extra cash to invest in one of your mothers projects (you may not have enough to do one by yourself).

Do your self a favor, UNTIL YOU MAKE AT LEASE $10,000 ON A REAL ESTATE DEAL: Cancel any vacation that is more than 3 days long. YOU CAN'T MAKE MONEY ANYTIME YOU WANT TO. This is a myth and it goes hand in hand with (you are self-employed, you can do what you want to). All of us wake up sooner or later, most LATER.

If you buy now, you will put the rent money in your pocket, years from now. If you take 2 years to fix up the property, and invest as much with your mother as possible, you will see about 100% return on what you spend. Get a piece of paper and add up the amount of rent you would of spent for 2 and a half years. I think that your returns would equal this figure in the future. It is possible that the real estate market could turn against you. In a case like this, it is good skill that make the difference. JUST REMEMBER THAT THERE IS ALWAYS A WAY OUT.

Answer 2

For obvious reasons, #2 is your best bet.

For one, you build the equity, something you can't do when you are renting.

Flipping houses is a great money maker, so when you do, you will have money, something you can't do with renting.

Renting is money down the drain, and to be wasting $750 a month doesn't make sense.

Sure, you are going to be paying a little more in other things like utilities and what not, but hey, welcome to the real world!

When you are broke, you are still worth something when you own a house, it's part of your wealth and you feel good about putting the money towards something that is yours.

You might need to get a second temporary job if you want to a little more financial security, though.
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Make sure you are saving wisely, and budgeting right if you can't get a second job. $3,000 should be ok, but not in the long run.

Answer 3

Why would you rent? You have an opportunity to buy from someone you trust, and improve your situation in the long run as well. Each payment you make is a little more money in your pocket, not someone elses. not to mention the opportunity to get cheap flipping labor and make a profit in a few years.

Answer 4

After looking at your options, I think that #2 would also be your best bet because of the fact that it's cheaper and it has more household rooms which can be beneficial when having guests over and when you have your new baby (Congrats! Btw)

Good luck and I hope you make the right decision! :-D

Answer 5

i think this is sush a important question that you shouldn't take any advice of somebody you don't know , from people from the internet, people whom haven't seem any of the home.

This decision can change your life for better or for worse, so just think about with tranquility and if you are going to ask someone, ask your beloveds ones

JUST KIDDING: get the #2 home

Answer 6

Based on your income you can easily handle a 80k mortgage loan. So when you can afford to buy, you always should.