To Rent or To Buy?

Monday, February 4, 2013

When I came home from Dublin I had this master plan of living at home for two years while working, paying off loans, and saving money for a down payment.  I've been home for five months now and I'm finding it harder to believe that I'll be able to stay here for another year and a half.  My parents are wonderful and would have no problem letting me stay but for other reasons I feel like I need to speed up my timeframe.

The problem with this is 1.) I haven't saved much for a down payment 2.) at this point I don't know what / where I would want to buy something even if I could and 3.) I have a small fear of commitment.

Even if I did have enough money for a down payment, I am so torn as to what and where I would want to buy.  My plan for some time had been to buy a two family home and have an income property.  This would generally mean a more expensive property and having to deal with tenants.  I could also do a small single family home however even that might be too much space for me at this point. Then there would be the whole condo route. I don't know how I feel about HOA fees.  I also have a huge fear that if I did buy something, I would realize I hated it or I would lose my job and be unable to pay for it.  Recession scars.  I think those are pretty legitimate fears though so I'm not ignoring them.

My other option is to rent.  Knowing my own track record, I don't stay in one place for long so realistically this is my best option.  I just hate the idea of paying month after month and gain nothing from it except a place to stay.

So I'm torn.  I don't think  I can stay at home much longer so it's matter of deciding if I really want to buckle down and save quickly to buy something, or start looking into renting again and accept the fact that my saving and loan payments will get smaller.

If anyone out there has experience with this dilemma I'd love to hear how you handled it!

(source)

4 comments:

  1. totally hear you on this one - i loved renting for the while we did. with my hubby in the military, we knew we were never going to be in one place for long so it made sense to sign 1 or 2 year leases at a time. also, it was nice having the convenience of maintenance necessary (working full time, neither of us had time for that). another plus to renting was size. we had just enough space as we needed.

    then our careers took a new turn that would allow us to settle in one place for a while ... thats when we decided to invest. the home we decided on turned out to be just an additional $200 on mortgage versus what we were paying in rent. it had everything on our must-have list and even some pluses! one thing we compromised on was HOA fees but after finding out that our HOA services include roaming security (on top of being inside a manned-gate), cable with premium movie channels, and all lawn maintenance, we were sold.

    while mortgage itself wasnt bad, other expenses do add up (property tax, insurance, maintenance inside, etc.). we also now have all this excess space that we didnt have in our apt - hello, formal dinning room AND formal living room? so, filling a much larger space is another expense, albeit 'happy' expense.

    for us, buying was a smart investment since we know where we are sticking around for quite a few years (many, if we can help it) and pretty much nesting as we prepare to start our family.

    when it comes to your decision, i suggest doing a lot of research (we liked HGTV as 'research' lol, still do!). interest rates right now are nice and low but the market is showing signs of improving. being able to put down a good amount upfront can make your monthly payments reasonable and therefore allow you to spend more on the associated expenses. weigh your priorities - do you think you can learn to or have the time to be as handy as you would need to around a home? have you looked into the legalities of being a landlord or possibilities of having housemates (if that was a consideration)? also, going to banks and just finding out how much they will loan you can be a huge help in the decision. you can find a realtor and just start looking at the homes in your budget - you might find that you dont like what you can afford which might encourage you to save more before committing, it can also give you a better idea of where you want be location wise.

    so much to think about!!

    i am SO SORRY to be writing a NOVEL here! i truly dont mean to overwhelm you... i got carried away because i completely get it. this decision is huge!

    hope some of this helps!

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    1. This is all great! Almost exactly what I needed to hear. Thanks! Also I pretty much have HGTV on 24/7. You can never do too much research!

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  2. You know we have been saving for a house for quite some time now. The worst part of renting is what you mentioned- all that money not being put towards anything but a temporary living space. its tough.

    all your fears are legit- its just a chance you have to take i guess! i think the 2 family house idea is a good one, we actually thought about something similar but we were just not read to be landlords i guess!

    a condo is an idea i think thats good- you can get a big or small one, whatever is appropriate. we also thought of that but we want land, and he needs a garage so it just wasnt in the books for us!

    as hard as it is waiting, and saving, and living in a teeny apartment paying rent- i know it will all be worth it soon enough. just a big waiting game!

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  3. I'm leaning towards renting for one year and then trying to buy. I'm just going to have to go for the cheapest place I can find so I can hopefully still save a little bit while getting back out on my own!

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