house or aparment?

Question

i'm 18 and am seriously thinking about moving in with my boyfriend in the near future. we both have jobs and are going to school but he wants to buy a house and fix it up, then re sell it...i personally don't like this idea. i say we should just rent an apartment and save up. (i don't think he knows what the words save up mean). what would be the ideal choice?

Answer 1

With everything you have going on at the moment renting would be the best option. You are both working and going to school. Wait until you finish school and have your degree and possibly better employment. That is the reason you are going to school I am assuming. Good luck to you, whatever you decide.

Answer 2

Depends if you need a home loan in order to buy the house...
True, renting is just throwing away money, but so is interest on a big home loan!
I know in Australia there are fees for early withdrawal from some loans for up to 5 years, so renting would give you freedom to move around, whereas a loan would tie you down for at least 5 years.
I'd advise buying only if in a very stable relationship and if you're willing to put in a lot of work to get an old house in to good enough shape that you can re-sell it for a profit.
Even then after you re-sell, the profit is very minimal due to cost of renovations, and all the interest you've been paying on the loan.
I think renting and saving is the best way to go if you're not dedicated to renovating an old house (which can be a lot of hard work), and when you save up a larger deposit (so you'll be paying less interest back on a loan) then you can consider getting in to the property market. I'd say try renting together for a few years before you consider investing money in a venture that may not work out.

Good luck!

Answer 3

Does he have money for a downpayment, settlement costs ( transfer taxes, insurance, mortgage costs-appraisal, inspection,radon test, termite inspection, septic inspection) etc.? It can be $4,000+ just for the settlement costs. Can you afford a repair-what if the heating system goes out suddenly? Could he afford to replace it? Also, can you afford the taxes, the maintenance? The first place to start is to see if you qualify for a mortgage. Call a reputable mortgage broker, and he will tell you. If you are qualified, go shopping. Make sure you have enough money to do the repairs if you are planning to flip a property. If not, make a goal to save a certain amount monthly and start an account dedicated for your downpayment. A rental is much more affordable than owning, even with the tax benefits of owning(you can deduct your mortgage expense on your tax return). Also, if you are going to be joint owners, you need to have a written agreement between you that specifies what you will do if one of you wants to move out and wants to be paid out. It may sound harsh, but that is very important. Would he buy you out, would you buy him out, or would you agree to sell the property? If you don't have it in writing from the start, you will be in big trouble later, because you can incur thousands of dollars in legal costs to have a judge decide how it will end ( that process is called partitioning the real estate). There are a lot of good books for first time homebuyers. Start with that-so you will know what to expect. At 18, you still have plenty of time to purchase a home. And right now, the real estate market in most places is losing ground, so you shouldn't feel like you are in a hurry--it's projected to go down further through 2008... The negative about renting is that you live in a more restricted way--perhaps your landlord wouldn't allow pets, or changes to the apartment, etc. But, that is a small price to pay for a one year commitment, rather than a huge, life long commitment. Are you both handy? If not, repairing and flipping can turn into a nightmare--if you have to hire professionals to do the work for you, you may not make a profit on the flip.

Answer 4

Oh dear. At the risk of sounding like an old fart, 18 is way to young to be considering buying a home. It's a huge responsibility and commitment. Have you been living on your own or with your parents? Do you have any idea of the kinds of expenses you'll encounter with homeownership? Taxes, repairs, upkeep, etc.

I would also think at your age, you probably haven't established much credit. You may have a hard time securing a mortgage. You said you both have jobs and are going to school. Do you have student loans to be paid off?

Even if money was no problem, I also don't recommend buying a house (or even a car) with someone you're not married to. If things don't work out, you're going to have incredible problems figuring out who gets what and who pays for what.

It also sounds like you and your boyfriend haven't lived together before. The comment you made about his views on saving tells me you already don't see eye to eye on important issues. I smell trouble ahead. He also sounds idealistic. He's assuming he'll be able to buy a house, fix it up and sell it at a profit. Ever see the movie "money pit"? Tell him to rent it. Even if the rennovations go smoothly, you're not always guaranteed of selling at a profit. And if you're both working and going to school, exactly when does he think you'll have time to be fixing up a house? Hiring contractors is expensive, and you probably won't have time to do it all yourselves.

I strongly recommend NOT buying a house. Rent an affordable apartment. I disagree with people who say renting is throwing money away. When you rent, you don't have to worry about repairs, maintance or taxes. If you find that you don't like the neighborhood, you can move. If you lose your job, you can move.

Moving in together is a big enough step on it's own. Rent a nice apartment. Focus on school and your relationship for now. What if you move in together and break up in 6 months? Isn't breaking a lease easier than dividing a house?

A house is something to works towards, not a starting point. And don't forget, if you buy a house and things don't work out, you could lose more than just boat loads of money. You could damage your credit rating, which will haunt you for 7-10 years. Take it slowly.

Answer 5

If your relationship has been short, less than a year and you're in school and working, I think leasing is a better option, but I would make sure you are both on the lease (or house if you go that way). You don't know if you will like or "love" each other as much once you've moved in together. If it goes sour or someone loses their job, you may lose your house and your credit and likely your relationship. If your jobs are temp. jobs, then I doubt you will make enough to fix up anything and still pay bills and have time for scool. Get an education first, it is the only investment that is "safe" . With it comes better jobs, more money, and a good home. Good luck....

Answer 6

The ideal choice would be to have some very deep conversations with your boyfriend. If his interests or where ever he is going in life is not where you are going, you may want to think a bit more about moving in. It's very hard work to live with someone. Do not invest with someone if you do not have a legal agreement of some type. There is nothing worse than doing a lot of work and then splitting up and the other party makes the $. Redoing houses is a good way to get ahead in life but it is a constant mess and a lot of work. Both of you will need to be committed. By the way, whose name is going on the title to this house anyway? What happens if you break up? Cover all the bases before committing yourself. I'm sure you're aware of the first wives club-those that work and put their husband through college or get them started in business and then they trade you in for a newer model once it gets good. He is not making any commitment to you, so you will be easy to get rid of if the relationship cools off. Be very careful.

Answer 7

HOUSE !! Renting is just throwing money out the window. So long as you make sure the house he is looking at is in an area that has a good turn around on property, I would suggest letting him go along with his idea. I rented for 5 years before buying a house with my husband, and we barely had enough saved at that point. It is much harder to save money than you think when you are paying rent. At least with the house, you can have something in your pocket when you sell it. It's a big decision, but speaking from experience, I would say go with the fixer-up house.

Answer 8

First of all don't move in with your boyfriend. I think you should both get done with school and at the same time save some cash for the future. If he has a trouble with the saving and all it is better to deal with it while you are not living in the same place as him.

Answer 9

apartment houses have to many problems to deal with if u get an apartment it wont matter much

Answer 10

Don't buy anything together unless you are married. It will only cause problems