when young should you bue or rent a house?

Question

dont know what to do buy or rent for the first time its not time yet but some friends are moving into there own place should a couple of young pepole buy a house or rent a house

Answer 1

This kind of scenario always seems like a paradise, and ALWAYS ends in disaster.

If you are dead set on moving in with your friends, at least have the smarts to rent...Chances are, you and your friends will not be living together for long, so don't get into a long term commitment...and make sure your name is not on the lease, phone bill, or electric...Whoever has thier names on those utilities and such will end up getting left holding the bag...it happens every time.

Answer 2

If you can afford to buy the home and make the monthly mortgage payment on your own your should buy a place. You can always charge your friends rent to live with you to help you pay the mortgage. If you can't afford the home alone you should probably rent. While buying a home is always the better option, because you accumulate equity in the house and when you sell it you will make a profit, buying a home with someone you don't know very well is not a good idea. Once you buy the home it is harder to move out if something in the relationship goes wrong. In order to get your money out of the house, you would have to sell your share to the other owner or you would need to sell the house. It is not like renting where you can move out and the other person can find someone else to cover the other half the rent. A mortgage does not care if you moved out, you still have to pay it every month for as long as you own the home.

Answer 3

as some of the others have suggested, it's always better to buy if you are able to. You are investing in something that will have value in the future, vs renting. However, you also have to weigh the costs to see what makes the most sense for you. Many banks today offer 100% financing programs, but unless you have the $3-5,000 for closing costs, you will have to find a house worth a little more than what they are selling it for, and see if the seller will help you "roll in" closing costs.

Also, depending on your credit, interest rate may play a part in your decision. If your credit is not so great, there is a chance you could pay upwards of 9% for the privilege of home ownership...if that is the case, can you still comfortably make the payments? Do you have a family member willing to co-sign for you to help out? Do you plan to stay in the home for at least 5 years?

Only you can answer these questions, but do not hesitate to call a few mortgage brokers in your area and ask some questions of them as well. They should ALL be able to tell you basic information about programs available to you as long as you have an idea of your credit profile WITHOUT repulling your credit until you have decided you want to work with them. If you don't know what your credit looks like, talk to a few people and find someone you are comfortable with and have them pull it for you.

Answer 4

Well the best way to decide is by looking at the Rent vs Mortgage

If you can get a mortgage payment for close to the same or less than it is to rent an apartment then buying a home is the best decision. Buying a home is sooo much better than renting for many reasons.. it is a great investment!

If you find that renting a home is a lot cheaper than it would be safer to rent. I would suggest trying to buy a home first because it will benefit you in the long run. Good Luck!

Answer 5

It depends largely on their current financial position and their goals for the future. Generally it is wise to buy a property as opposed to renting. However, if buying a property would stretch your friends finances short, to the point where they could not make payments, this could result in foreclosure which would substantially damage their credit. I advise them to first be realistic about what monthly payment they can afford. Once they have this figure, contact a lender. A lender can tell them how much, if any loan value they can get to buy a property. If they have a down payment and cannot afford a conventional loan, ask the lender for a good faith estimate and then find a realtor familiar with seller financing. With a down payment, they may be able to buy a property even without getting a loan from a bank. In a seller-financed deal, the seller is the bank and they can work out a payment schedule to purchase the property.

Answer 6

Buy a house as soon as you are able to. Just remember, when buying real estate you're not just getting a home but also an investment. The longer you hold on to investments, the greater chance it will grow in value and build wealth. On the other hand, short term investments (less than 3 years) are more of a risk. Renting only makes sense in a short-term outlook or when you have no better options.

Answer 7

it depends on the market and the city but if it's a city where there's no where to go but up I say you should buy.
I bought a house when all my other friends where renting and sold it for almost 5 times what I bought it for now I own my own home no more rent or mortgage and I'm still very young. so buying is always better, renting is just throwing money away.....

Answer 8

You may not be able to afford a mansion, but if you have partners, investing in a foreclosure like a duplex to use would be beneficial. Rent one side and have the other to yourself. That's what my friend did when they started out, let the duplex pay for the mortgage. So technically, there was no rent or mortgage.

For more information on foreclosures or duplexes, try picking up some reading material on how to do real estate investing. See book below for recommendation.

Answer 9

hi! get your net disposable income, you should know it first how much it is. then from there , try to get the 40% of it , if that 40% amount is sufficient for your monthly payment as your amortization then it's the right time to buy that house which fitted to the amortization or to your 40%. if you still have more question about buying a house just send to me directly, it's better to have your own, even mortgage, than renting a house where you pay monthly but at the end it is still not yours.

Answer 10

the best way to build wealth is to buy a house. if you can, buy a single family, detached house. buy it as soon as you can, in this buyer's market, since you have the greatest chances to negotiate a reasonable price that, when the seller's market rolls around--in quite a long time from now due to how PRICE rose for five straight years, the first time i, or my former trainers, ever saw--you can sell at a premium price and then buy another house.

you save a lot of income tax money when you live in and own a residence. you can write off all of the interest you pay on the mortgage as well as the real estate taxes (based on your tax rate), so, if you do not get a refund from uncle sam now, you will...

there are two things that you must do first, before you look:

1. get a preapproval letter for a mortgage from the lender of your choice; and

2. find yourself a really experienced Realtor (r) that is not necessarily the trillion dollar seller (because they go from one sale to the next that they just do not have time to care about your needs, really, i kid you not), but one that:

a. explains to your satisfaction and complete understanding what "agency" means to you, single agency as well as dual agency!

b. is conversant in the marketplace where you will buy;

c. thoroughly analyzes your needs versus your wants--this will take preparation work on your part before you sit down with a Realtor (r).

the way you find a competent and caring agent is by calling the number on for sale signs. don't let that agent bring you into that house until you sat down with her to get a feeling of how she does her work FOR you. remember: this is YOUR life, not hers. there is only one exception to this rule: if the house has an offer on it already, go ahead, see it, if it is within your price range--but be sure to bring along an earnest money check!!! it just might be the ONE that fits you, so you do not want to lose it if it is. (the good deals ALWAYS sell fast).

i do not recommend getting property in any bad location or foreclosed, unless you know exactly what you are getting into and how much work and money it will take to fix it. if you buy a two-unit, the other one that you do not live in will not pay the mortgage for a long time: you will have your side to pay.

to learn about building wealth in purchasing a home, one of the best sites is AARP, which also has articles about reverse equity mortgages that usually an elderly person uses once they paid off their mortgage. it is good to do as much research as possible before you see a Realtor (r) so that you can ask her questions. you want to know how to build wealth now and what you can expect as time goes on, into retirement.

please write me using the email address provided here if you have a specific question.

all younger people should buy real estate as early as possible!!! and buy the best your money can buy--do not buy less than what you can realistically afford--which is a word to the wise. i know it on a personal level, trust me.

buy it, and be happy!