Buying a house for short term

[Bades]

Is purchasing a first home with the possibility of only being there 3 years worth it? I want to get out of renting and also take advantage of low rates. Reason is - not sure how long I will be in current city.

[disneysteve]

Absolutely not. You'd basically be taking on all of the risk of home ownership with none of the benefit. You'd still be paying "rent" in the form of mortgage payments but you'd also be paying property tax and closing costs and moving costs and maintenance and repairs and higher insurance only to turn around and sell it in 3 years and have to pay costs associated with that.

I say 5-10 years minimum to buy a home. We didn't buy ours until we were as sure as we could be that we'd be staying put for the long term. That was 18 years ago.

[Bades]

okay - that's kind of what I figure - you would say 5 years minimum then?

[red92s]

okay - that's kind of what I figure - you would say 5 years minimum then?

I'd say 5 years is on the low end. Simply off-setting the closing and moving costs will take at least that long.

[elessar78]

As someone who just purchased a house. Okay 5-10 years to make it worth it FINANCIALLY. But there's also the practical, life-aspect of homeownership. Two weeks after closing I've had to do more with a move-in ready house than I did in a decade of renting. If I'm exaggerating, it's barely.

I haven't lived anywhere (rental) where I became fully unpacked and moved-in in under a year. I think moving is a huge pain.

[JBinKC]

I probably would only consider a foreclosure that is in good condition and at least 30% or more below the comps in the area. Otherwise you are better off renting.

[Max G]

How strong is the possibility of moving? Nobody knows for sure whether they are staying in one place or not so you might be delaying your home purchase forever based on "possibilities". Also people understimate personal fulfillment that comes with home ownership. Yes taking care of your own house is hard work but you can make just another house a place where you happy and enjoy spending time by redesigning, adding personal touches, etc. You cant do that with a rental. So if you know for sure that you are moving in 3 years, I guess keep renting, otherwise look into purchasing.

[jpg7n16]

okay - that's kind of what I figure - you would say 5 years minimum then?

If you want to dive into endless hypotheticals, use a calculator like this one:

Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com

[snafu]

I suggest you look at a mortgage amortization schedule or better yet, run the figures for yourself for the mortgage sum you qualify for. Will you be surprised to learn for the first few years only a few dollars goes to principal and a whopping 97% goes to interest? Add in closing costs, municipal taxes, repairs, move-in costs, utility fees, insurance and if you don't have 20% down payment, expensive mortgage insurance.

In this economy with uncertainty of an election there is no way to guess the housing market in three years or when you want to move. If home ownership is important to you, I suggest you live frugally, save as much down payment as you can and track the market on-line both in your present location and your desired move-to. Start by listing deal breaking features, nice to have, and those that you could DIY with a few classes offered by Home Depot type outlets.

[bjl584]

I would rent if you are only going to be living in your current location for 3 years. Put away any extra money that would have been taxes and upkeep as a house fund for when you move and are sure you will be staying. Renting affords you the ability to up and move without worry. If you buy, then you may be stuck where you are until the house sells should you need to move. Or, you may end up having to try and sell a vacant home long distance which can be a pain. I'd rent until I was sure where my life and career will be taking me.

[JoeP]

Usually, the first year of home ownership involves painting, re-carpeting, furnishings, new appliances, all new window treatments, yard work (planting trees, gardening, etc), tools and equipment.

When you rent, all (most of) that money can be saved toward your down payment. Plus you don't have to worry about selling your apartment; just move out when the contract expires.

[Bades]

Update: will 99.9% likely be moving back to my home town - as I'll be working for my father's business. This will happen next summer, this will most likely be a long term committment and will probably look at houses when I return. Thanks all