To Rent or to Buy a home?

Question

My boyfriend and I are getting married and moving in December. We're moving to a small town to finish college. We both have decent to good credit and have about 10,000 saved up for the move so far. Would it be better to rent a place, so that we aren't tied down after graduation, or buy a place instead of throwing money away on rent? We've looked at mortgage rates and think that paying the house payment would be just about equivalent to paying rent. Any suggestions?

Answer 1

1. There are costs to buying that you do not necessarily recover when you sell. Hence there is a real, hard costs to buying that does not happen if you were just renting.

2. Renting is not throwing away money. There is a true cost of living in a home. When you buy that cost if the interest payments (before or after tax depending on how you want to look at it). Renters do not have to pay for a new roof, replace the furnace, deal with pests and other things. Hence there are costs that an owner has that a renter will never have.

Renting does have a cost. Buying has a number of costs that are not present when renting.

3. As a general rule if you do not expect to be in an area long (at least 2 to 5 years depending on the area) the value might not rise enough to cover the costs of buying and selling. When you sell you can expect some serious costs mostly from the fee for the agent. There can be other fees or costs that add up.

It is not uncommon for someone to buy and then sell 2 years later for a loss. Too many buying and selling costs coupled with a stagnant market.

4. It is true that if you can find a property that has some problems (mostly cosmetic remodelling) then you can help force up the value through improvements. This can be a way to hedge your risks when you buy. As you will be in college it is not clear that you would have the time or the interest to take on such projects. If you do then look for a home that is equal or below the standard for the street. You do not want the best property on he street when you buy.

Buying can be a great deal. It can also be the wrong decision given market conditions and personal circumstances. Do consider the options but do not think that renting is throwing away money. There is a true cost to having a home.

Answer 2

A few things to consider, what is the housing market in this town? Are you paying for a house that will sell for the same price you bought it, or will it be worth more when you sell. Here is the thing.... If you rent, you don't have anything, but if you buy, you build equity. So when you sell the house, while most of the money will go to paying the mortgage, you will walk away with a little bit of cash in your pocket. There are pros and cons to each side, it is just a matter of figuring out which will benefit you the most when you decide to leave the small town.
Look at how many homes are in the market in that area, if there are alot of homes on the market, and they aren't selling, you may have the same problem when you try to sell. If houses are selling quick, then go for it. But find something that you can increase the value of without putting to much money into it, like something that needs a fresh coat of paint and new carpet. Nothing with major repairs. you are still in college and need to be wise with your money. So if it all costs the same and can sell quick when you move, do it. If renting is cheaper and they market is slow, rent

Answer 3

Also, you will be able to deduct the mortgage payments from your taxes. Rent is not deductible.
Before buying a house, think if it will be easy for you to sell it in a future in case you decide to move.
Small town might not have good jobs available to you right after your graduation, but the mortgage bills will keep coming. It is easy to break up a rent contract; however, missing mortgage payments will draw you into foreclosure (very bad thing for your credit).
If, after graduation, you receive a good job offer in some other place, think how easy it will be for you to sell that house right away. You might end up with rent AND mortgage payments until you sell that house.
If you are getting married, you need to look for the house that is very close to good-rated elementary school. And that is the most important thing to consider.

Answer 4

Rent To Own Homes - http://RentToOwnHome.uzaev.com/?NFuF

Answer 5

Generally it is thought that you need to be in a house 3 years to break even on realtor's costs and closing costs.

I'd also look at the local market and see where you think it's headed. In addition, the career(s)/employer(s) you are pursuing might be worth factoring in (like my employer for my position pays all real estate agents costs + closing costs on both ends of the deal if they relocate anyone w/ >2 years experience).

Answer 6

If you can sell the house and make more than you paid for it after you finish college then buy it! If you will be stuck paying it off and losing money then rent.

Answer 7

Buying and/or leasing with an option to buy is by far your best choice. It will increase your credit score and you will be paying/investing in your future..instead of your landlords!

You can buy a home with No Bank Qualifying here:
http://www.scbuyshouses.com/forms/customform.cfm?formID=32965

Answer 8

Always buy. Resale on homes usually go up as long as the neighborhood is half way good.

Answer 9

Buy if you can.

The best way to build equity is to buy a low-priced home that needs work, fix it up and make it worth double what you paid for it.

Answer 10

hey you don't wanna rent or buy a home.
if you like ,
come and bed with me.
i have a big bed ,
but i sleep Alon