Buying a small house or condo versus renting an apartment?

Question

This summer, I will be moving out of my parents house to attend college (3 years to go) in another city.

The city where I plan on moving isn't known for low rents, however it has fairly low entry-level housing costs. Therefore, I'm in a bit of a predicament.

For about $525/month, I can get a decent one bedroom apartment with heat and water paid. As that is rent, it's money I'm never going to see again.

For about $600/month, including condo association fees, I can get a newly updated condo that also includes heat and water. It's a two-bedroom unit with a garage (something I wouldn't get with the apartment). I understand the condo association fees aren't much different than rent, but its a small fee ($150).

With such a small difference in price, I'm a bit unsure of which route I should take. I'm open to suggestions or other people's experiences in this matter. Any advice would be great. Thanks!

Answer 1

The condo may only be a better deal if you think it is going to appreciate. If condo prices are going down, you could lose your down payment. And you also have to consider the time it might take to sell a condo.

Answer 2

Getting a mortgage will cost you about $2000 - $2500 in fees, or if the lender waives the fees, they'll get it back from you with a higher interest rate. So unless you keep the place long enough to recoup the fees by building home equity, buying isn't worth it. I usually see 3-5 years as a recommendation, so your case is probably borderline.

You can no longer count on making a large profit when you sell your home in a few years. Even if the housing market where you're buying is still going up, the bubble may pop by the time you're ready to sell. If the market really tanks, the selling price might not even cover the remaining balance on the mortgage--you'd have to pay money out of pocket to sell the place. Renting would protect you from that. On the other hand, you might profit handsomely when you sell, or want to keep it.

Try Googling "Rent vs. buy calculator" to run some numbers.

Answer 3

James, Renting vs paying for is thoroughly subjective based upon your own situation and targets. oftentimes, its better to purchase than lease given which you're extremely making an investment in your self. even nevertheless, based on your age, paying for can tie you down bodily and financially and could no longer unavoidably be the suitable determination based on your age, targets or place. some human beings hate doing upkeep and are merely all thumbs, so renting could make an excellent form of expertise. Its extra high priced interior the long-term yet you have the liberty to pass away after your term expires. GL

Answer 4

Benfits from buying then renting ,tax write off ,equittie on property in the future.