And baby makes 3... bedrooms
September 8, 2010 4:14 AM Subscribe
We need the space but I'm on the job market. How stupid would it be to buy a house if we aren't sure if we will live in it for more than a year?
We've lived in the same reasonably-priced one-bedroom apartment for the last decade. We are expecting a baby. One of us recently started working from home. A larger place would really help.
However, I am tentatively dipping my toes in the academic job market. I am only applying for jobs I think I'd like in places we would be happy to live. The job market seems pretty bad, and I have a job now, so there's not a lot of urgency or great expectations. If I were to get a job, we'd have to move within a year.
I've always heard that you shouldn't buy if you might move within 5 years. (That is partly what has kept us in the same apartment for so long -- 'of course we will finish grad school within 5 years', 'this postdoc will be over in 2 years', etc.) We've looked at the NYT rent vs. buy calculator and it appears that it would take about 3 years for buying to be a better deal than renting a similar house. If we had to sell after a year, according to the calculator, we'd be spending about 15K more than if we'd rented. It hurts my frugal soul, but it wouldn't kill us.
What am I overlooking? Would buying a house now be just plain stupid? Is my brain addled by some kind of nesting urge?
We've lived in the same reasonably-priced one-bedroom apartment for the last decade. We are expecting a baby. One of us recently started working from home. A larger place would really help.
However, I am tentatively dipping my toes in the academic job market. I am only applying for jobs I think I'd like in places we would be happy to live. The job market seems pretty bad, and I have a job now, so there's not a lot of urgency or great expectations. If I were to get a job, we'd have to move within a year.
I've always heard that you shouldn't buy if you might move within 5 years. (That is partly what has kept us in the same apartment for so long -- 'of course we will finish grad school within 5 years', 'this postdoc will be over in 2 years', etc.) We've looked at the NYT rent vs. buy calculator and it appears that it would take about 3 years for buying to be a better deal than renting a similar house. If we had to sell after a year, according to the calculator, we'd be spending about 15K more than if we'd rented. It hurts my frugal soul, but it wouldn't kill us.
What am I overlooking? Would buying a house now be just plain stupid? Is my brain addled by some kind of nesting urge?
Rentals are relatively cheap now. In a time of uncertainty they are almost always better. In times where people can not sell their houses for months and months, if ever, rentals certainly seems better. Buying a house for a year or two is an idea that only caught hold during the boom times in real estate. During downturns, or even normal times, this just does not make sense. you also would not want the house to become the albatross which limits your future career choices.
posted by caddis at 4:29 AM on September 8, 2010 [1 favorite]
posted by caddis at 4:29 AM on September 8, 2010 [1 favorite]
As someone who's still sitting on a house he can't sell in a city he no longer lives in because he took a job elsewhere: rent.
posted by Emperor SnooKloze at 4:30 AM on September 8, 2010 [6 favorites]
posted by Emperor SnooKloze at 4:30 AM on September 8, 2010 [6 favorites]
This doesn't make any sense.
If you need more space now, and you're searching for a job, don't buy a place. Rent a larger space. From the sound of it you're searching for a job in multiple different locations. Buying a house in one location makes no sense given a concurrent job search in multiple places.
posted by dfriedman at 4:37 AM on September 8, 2010 [1 favorite]
If you need more space now, and you're searching for a job, don't buy a place. Rent a larger space. From the sound of it you're searching for a job in multiple different locations. Buying a house in one location makes no sense given a concurrent job search in multiple places.
posted by dfriedman at 4:37 AM on September 8, 2010 [1 favorite]
Can I just point out that aside from the financial stupidity of buying now - a transaction for which there is virtually no upside for you - buying a house, moving, having a baby, selling a house and moving again seems like nothing so much as a recipe for stress and divorce.
I mean, how many major transitions can you really manage in one calendar year? Your list of six is about five events longer than mine.
If you need more space, go rent a bigger apartment. If you don't move to a new city, you can sit in your new rental until it's a much better time for you to buy and move with a young family; if you do move to a new city, your financial impact is limited to breaking the lease.
I do not consider rent wasted money, for what it's worth. Food, clothing and shelter are the basic human requirements. Meeting them carries a monthly overhead, full stop. There are financial and lifestyle advantages and disadvantages to both renting and buying, but generally as long as your long term financial plans dictate that you will not be paying a rent or a mortgage out of retirement savings, you should be flexible about how you reach that terminal destination.
Frankly, in your position with a new baby and a potential relocation, I would value the lifestyle flexibility renting gives you far more than the very minimal advantages, if any, that buying would bring right now.
posted by DarlingBri at 4:48 AM on September 8, 2010 [5 favorites]
I mean, how many major transitions can you really manage in one calendar year? Your list of six is about five events longer than mine.
If you need more space, go rent a bigger apartment. If you don't move to a new city, you can sit in your new rental until it's a much better time for you to buy and move with a young family; if you do move to a new city, your financial impact is limited to breaking the lease.
I do not consider rent wasted money, for what it's worth. Food, clothing and shelter are the basic human requirements. Meeting them carries a monthly overhead, full stop. There are financial and lifestyle advantages and disadvantages to both renting and buying, but generally as long as your long term financial plans dictate that you will not be paying a rent or a mortgage out of retirement savings, you should be flexible about how you reach that terminal destination.
Frankly, in your position with a new baby and a potential relocation, I would value the lifestyle flexibility renting gives you far more than the very minimal advantages, if any, that buying would bring right now.
posted by DarlingBri at 4:48 AM on September 8, 2010 [5 favorites]
I think it's a pretty common assumption that renting=apartment while buying=house, but in fact there are a huge variety of really nice single-family houses available out there on the rental market. So if what you want is a house for your family, I'd say you're best off trying to find a nice one that's for rent. Craigslist and Padmapper are good for this, in my limited experience.
posted by Bardolph at 4:49 AM on September 8, 2010 [2 favorites]
posted by Bardolph at 4:49 AM on September 8, 2010 [2 favorites]
Why can't you just rent a bigger apartment?? (Or house)
I suspectyou're starting to get your heart set on owning & settling down, possibly in reaction to the upcoming job market, possibly as a "nesting" instinct with your pregnancy. But buying a house really, really makes no sense for you right now.
posted by kestrel251 at 5:06 AM on September 8, 2010 [1 favorite]
I suspectyou're starting to get your heart set on owning & settling down, possibly in reaction to the upcoming job market, possibly as a "nesting" instinct with your pregnancy. But buying a house really, really makes no sense for you right now.
posted by kestrel251 at 5:06 AM on September 8, 2010 [1 favorite]
If you can afford to take a $15K hit on reselling a house, why can't you put that money toward renting a bigger apartment or townhouse or house?
Do you have a neighborhood in mind with cute little houses, and yards, and it's close to everything--and there aren't any houses for rent there but there are a few "for sale" signs? Because there's a place like that near me, and every time I drive by that area I start thinking about how nice it would be to have that adorable blue Cape Cod, and how the only way we could live there would be to buy the place, and how maybe we could make that work--and it's not like it'd be extravagant or anything, but it still doesn't make financial sense for my family. That's just to say, I think I know the feeling, and I don't think it's stupid, but acting on it would not be wise.
posted by Meg_Murry at 6:04 AM on September 8, 2010 [1 favorite]
Do you have a neighborhood in mind with cute little houses, and yards, and it's close to everything--and there aren't any houses for rent there but there are a few "for sale" signs? Because there's a place like that near me, and every time I drive by that area I start thinking about how nice it would be to have that adorable blue Cape Cod, and how the only way we could live there would be to buy the place, and how maybe we could make that work--and it's not like it'd be extravagant or anything, but it still doesn't make financial sense for my family. That's just to say, I think I know the feeling, and I don't think it's stupid, but acting on it would not be wise.
posted by Meg_Murry at 6:04 AM on September 8, 2010 [1 favorite]
I do think buying a place sounds rash, but I'd also point out that here in Boston the rental market is actually pretty tight. While there is no guarantee that state of affairs will continue, my GF and I are considering buying a place here in town and then renting it out when we want to move on to a bigger place.
But even still, we're thinking of a 3-5 year timeline before moving (i.e., on the early end of the range of how long you should plan to live in a purchased property to break even).
So, probably no.
posted by Admiral Haddock at 6:25 AM on September 8, 2010
But even still, we're thinking of a 3-5 year timeline before moving (i.e., on the early end of the range of how long you should plan to live in a purchased property to break even).
So, probably no.
posted by Admiral Haddock at 6:25 AM on September 8, 2010
Have you run the numbers on how much money you'd lose if you bought today and sold one year from now, assuming the same selling price (not even taking into account extended selling periods when you could be paying a mortgage AND a rental in your new location?)? Definitely, definitely not worth it. Absolutely not.
Check out "The Wealthy Barber." Pretty good personal finance book all around. He has a section on real estate that does the rent-vs.-buy math in an easy-to-understand fashion. Buying, even if you're in a steady place for a long period, doesn't always come out on top, especially if you take into account maintenance, etc. (could you imagine if something happened to your roof on the new place and you were out $15,000 next year???).
You should think about *why* you feel compelled to own property.
posted by kryptonik at 6:28 AM on September 8, 2010
Check out "The Wealthy Barber." Pretty good personal finance book all around. He has a section on real estate that does the rent-vs.-buy math in an easy-to-understand fashion. Buying, even if you're in a steady place for a long period, doesn't always come out on top, especially if you take into account maintenance, etc. (could you imagine if something happened to your roof on the new place and you were out $15,000 next year???).
You should think about *why* you feel compelled to own property.
posted by kryptonik at 6:28 AM on September 8, 2010
Response by poster: I appreciate these answers. I'm afraid that if I try to explain where I'm coming from, and explore your answers more, that I'll look like I'm arguing. I'm not; it's just how I learn and understand things.
Yeah, it is kind of the "cute little houses, and yards, and it's close to everything" that Meg mentions. And some are cheap enough that no mortgage would be needed.
With regard to the job search, I mean it when I say I'm not applying to jobs I wouldn't want to have. I'll probably end up applying at 2-4 colleges this round. I'm not carpet-bombing with applications like it seems is necessary for a guaranteed successful search. I've heard of 200 applicants for positions at liberal arts colleges. People who were super good in grad school have been unable to find work. I really don't have much hope.
With regard to renting a larger apartment or house, the cost of renting a larger place is 2-3X what our current rent is. I used to look at that rent vs. own calculator smugly because I was comparing the cost of renting a one-bedroom to the cost of buying a larger house. It would never make financial sense to buy in that case.
Now that I'm comparing the cost of renting a comparable place, it's much more balanced. However, utilities will be more expensive and there would be some things like lawnmowers that would have to be bought in the first year of owning a house. And yeah, Kryptonik, it would be pretty bad to replace a roof. The NYT calculator does have maintenance provision, but it's not assuming that the most expensive thing will happen in the first year.
I'm also not sure how feasible it is to do childproofing things like attach the bookcases to the walls in a rental -- it's definitely against our lease here.
posted by SandiBeech at 6:38 AM on September 8, 2010
Yeah, it is kind of the "cute little houses, and yards, and it's close to everything" that Meg mentions. And some are cheap enough that no mortgage would be needed.
With regard to the job search, I mean it when I say I'm not applying to jobs I wouldn't want to have. I'll probably end up applying at 2-4 colleges this round. I'm not carpet-bombing with applications like it seems is necessary for a guaranteed successful search. I've heard of 200 applicants for positions at liberal arts colleges. People who were super good in grad school have been unable to find work. I really don't have much hope.
With regard to renting a larger apartment or house, the cost of renting a larger place is 2-3X what our current rent is. I used to look at that rent vs. own calculator smugly because I was comparing the cost of renting a one-bedroom to the cost of buying a larger house. It would never make financial sense to buy in that case.
Now that I'm comparing the cost of renting a comparable place, it's much more balanced. However, utilities will be more expensive and there would be some things like lawnmowers that would have to be bought in the first year of owning a house. And yeah, Kryptonik, it would be pretty bad to replace a roof. The NYT calculator does have maintenance provision, but it's not assuming that the most expensive thing will happen in the first year.
I'm also not sure how feasible it is to do childproofing things like attach the bookcases to the walls in a rental -- it's definitely against our lease here.
posted by SandiBeech at 6:38 AM on September 8, 2010
I don't know where you are, so I'll preface this by saying that my family (three of us) rents a single family house in north Texas after living in apartments (and a crappy townhouse) for years.
My advice to you would be to rent a house. It's even better if you can find a house owned by an individual who is looking to cut his or her costs. Our landlord basically takes our checks and leaves us alone, which is awesome. Everything is negotiable in a house lease, much more so than an apartment lease. If you need to be able to attach things to walls or take other steps, get that written into the lease and be prepared to either patch or pay at the end. Some of the houses around here even include lawn care, but that's not common. It is, however, an example of what you can get if you negotiate. Several people in our area are renting their houses out as a foreclosure-prevention mechanism. This puts you in the driver's seat because you have something they want: money.
We are looking at buying a house when we're ready to move to 4 bedrooms, because renting a 4BR is more expensive than buying a 4BR. That's the point at which you should buy: when you're planning on staying put (we are) and when renting costs a decent amount (i.e. more than you'd spend on annualized maintenance and care) more than buying. My threshold there is about 25%, yours may be different.
posted by fireoyster at 6:52 AM on September 8, 2010
My advice to you would be to rent a house. It's even better if you can find a house owned by an individual who is looking to cut his or her costs. Our landlord basically takes our checks and leaves us alone, which is awesome. Everything is negotiable in a house lease, much more so than an apartment lease. If you need to be able to attach things to walls or take other steps, get that written into the lease and be prepared to either patch or pay at the end. Some of the houses around here even include lawn care, but that's not common. It is, however, an example of what you can get if you negotiate. Several people in our area are renting their houses out as a foreclosure-prevention mechanism. This puts you in the driver's seat because you have something they want: money.
We are looking at buying a house when we're ready to move to 4 bedrooms, because renting a 4BR is more expensive than buying a 4BR. That's the point at which you should buy: when you're planning on staying put (we are) and when renting costs a decent amount (i.e. more than you'd spend on annualized maintenance and care) more than buying. My threshold there is about 25%, yours may be different.
posted by fireoyster at 6:52 AM on September 8, 2010
You will not need to childproof anything for quite awhile. A newborn really doesn't take up much space. It's when they get older and start crawling and then walking, and putting everything into their mouths that you need to worry about childproofing. When is the baby due? Most newborns sleep in a bassinet in their parents' room for the first few months anyway. Yes you'll want more space eventually but for the first six months of the baby's life, you'll probably be just fine in your one-bedroom. Ask family and friends to hold off on buying big things like tricycles and oversized toys until you get settled in a new place down the line.
Good luck with the job search!
posted by Kangaroo at 6:55 AM on September 8, 2010 [1 favorite]
Good luck with the job search!
posted by Kangaroo at 6:55 AM on September 8, 2010 [1 favorite]
We lived in a one bedroom with our first child till he was about 6 months old. It is doable.
posted by St. Alia of the Bunnies at 7:27 AM on September 8, 2010
posted by St. Alia of the Bunnies at 7:27 AM on September 8, 2010
Firstly, congratulations on your upcoming birth and good luck with the job search! Even though you said you're not carpetbombing prospective jobs, the new baby + new career must make this a pretty magical time for you right now.
As for the house, I'm going to jump on the "rent!" bandwagon. There are a few logistical things that you're going to have to worry about if you buy now and have to sell soon. First of all, you're probably looking at anywhere from one to several months before you'll even have possession of whatever house you're set to buy, even if it's currently empty. That'll really cut into the amount of time you think you're going to have in the place. Also, there are a lot more expenses that go along with setting up a house compared to having a one-bedroom apartment than just buying a lawnmower. You're looking at possible homeowner's association fees, escrow, homeowners insurance, closing costs, lawn care, pest control, whatever problems an inspector finds (especially if you expect to sell it quickly), new furniture, moving costs, higher utilities, etc.
Also, if you live in your house for less than two years before selling it (IF you're able to sell it in a timely manner in this financial climate), you're probably going to be responsible for paying capital gains tax on the sale, which can cut into your funds.
Basically, if you KNOW that there's a good chance that you'll be relocating for a job within the next few years, you'd be best to save your family the upheaval that buying+selling a house will involve. Rent, and know that you're actually investing in an easier transition later.
posted by scarykarrey at 7:30 AM on September 8, 2010
As for the house, I'm going to jump on the "rent!" bandwagon. There are a few logistical things that you're going to have to worry about if you buy now and have to sell soon. First of all, you're probably looking at anywhere from one to several months before you'll even have possession of whatever house you're set to buy, even if it's currently empty. That'll really cut into the amount of time you think you're going to have in the place. Also, there are a lot more expenses that go along with setting up a house compared to having a one-bedroom apartment than just buying a lawnmower. You're looking at possible homeowner's association fees, escrow, homeowners insurance, closing costs, lawn care, pest control, whatever problems an inspector finds (especially if you expect to sell it quickly), new furniture, moving costs, higher utilities, etc.
Also, if you live in your house for less than two years before selling it (IF you're able to sell it in a timely manner in this financial climate), you're probably going to be responsible for paying capital gains tax on the sale, which can cut into your funds.
Basically, if you KNOW that there's a good chance that you'll be relocating for a job within the next few years, you'd be best to save your family the upheaval that buying+selling a house will involve. Rent, and know that you're actually investing in an easier transition later.
posted by scarykarrey at 7:30 AM on September 8, 2010
Nope. There's nothing about your situation that puts a plus sign in the "buy" column. Not even the kid. Wait one year. Hoard your cash. Buy something amazing then that suits your family.
posted by amanda at 7:37 AM on September 8, 2010
posted by amanda at 7:37 AM on September 8, 2010
Now that I'm comparing the cost of renting a comparable place, it's much more balanced. However, utilities will be more expensive and there would be some things like lawnmowers that would have to be bought in the first year of owning a house. And yeah, Kryptonik, it would be pretty bad to replace a roof. The NYT calculator does have maintenance provision, but it's not assuming that the most expensive thing will happen in the first year.
The flow in your logic is that it isn't the cost of owning a home that are problematic, it is the cost of selling the home, both in terms of time on the market and the commission you will pay the realtor. Getting out of a rental is frictionless and costless, selling a home is not.
posted by JPD at 7:41 AM on September 8, 2010
The flow in your logic is that it isn't the cost of owning a home that are problematic, it is the cost of selling the home, both in terms of time on the market and the commission you will pay the realtor. Getting out of a rental is frictionless and costless, selling a home is not.
posted by JPD at 7:41 AM on September 8, 2010
However, utilities will be more expensive and there would be some things like lawnmowers that would have to be bought in the first year of owning a house.
There aren't just some things that would have to be bought when you buy a house after having lived in apartments for decades. There are lots and lots of things: lawnmower, rake, hoses, shovel, weedwacker, sprinklers, weedkiller, etc. And that's just yard care! Tools for basic maintenance unless you want to call a handyman to fix a loose hinge. A larger arsenal of cleaning products. There really are a lot of costs associated with home ownership beyond the purchase price, closing, and moving expenses. Then there are always unexpected things unless the house is quite new, like needing a new dishwasher or having to repaint a room. I'm seeing all of this with my brother who recently purchased a house. It almost seems like the list of new things he needs to buy is endless when starting without any of it.
Yeah, there are a lot of things you could just sort of neglect to save money now, but if you think you might sell in a year you probably want to keep on top of things so the house stays looking good.
posted by 6550 at 7:41 AM on September 8, 2010
There aren't just some things that would have to be bought when you buy a house after having lived in apartments for decades. There are lots and lots of things: lawnmower, rake, hoses, shovel, weedwacker, sprinklers, weedkiller, etc. And that's just yard care! Tools for basic maintenance unless you want to call a handyman to fix a loose hinge. A larger arsenal of cleaning products. There really are a lot of costs associated with home ownership beyond the purchase price, closing, and moving expenses. Then there are always unexpected things unless the house is quite new, like needing a new dishwasher or having to repaint a room. I'm seeing all of this with my brother who recently purchased a house. It almost seems like the list of new things he needs to buy is endless when starting without any of it.
Yeah, there are a lot of things you could just sort of neglect to save money now, but if you think you might sell in a year you probably want to keep on top of things so the house stays looking good.
posted by 6550 at 7:41 AM on September 8, 2010
My husband and I lived in a 400 square foot one bedroom apartment past our daughter's first birthday. I would recommend staying put unless your current apartment really wouldn't work (like being above a noisy bar). Psychologically, it is stressful to feel unsettled, at least where you are is familiar.
posted by saucysault at 7:48 AM on September 8, 2010 [2 favorites]
posted by saucysault at 7:48 AM on September 8, 2010 [2 favorites]
Yeah, it is kind of the "cute little houses, and yards, and it's close to everything" that Meg mentions. And some are cheap enough that no mortgage would be needed.
It would help to know what city you're talking about. If you've got enough cash on hand to buy a house outright (and support a baby too) then you're in an unusual financial situation -- unless you live someplace where houses cost $85K.
Remember that the costs of buying are not just financial -- owning property comes with a big helping of stress and uncertainty. Anything that goes wrong is your problem, not your landlord's problem, and it can be a big problem. I wouldn't add that to the stress of a new baby.
As for us, we just had a new baby and moved from our small rental apartment to the neighborhood with cute little houses and yards. Most of those cute little houses are resident-owned, it's true, but some of them are rented; like the one I'm sitting in right now. Our landlord had no problem with us screwing bookcases to the walls.
posted by escabeche at 7:50 AM on September 8, 2010
It would help to know what city you're talking about. If you've got enough cash on hand to buy a house outright (and support a baby too) then you're in an unusual financial situation -- unless you live someplace where houses cost $85K.
Remember that the costs of buying are not just financial -- owning property comes with a big helping of stress and uncertainty. Anything that goes wrong is your problem, not your landlord's problem, and it can be a big problem. I wouldn't add that to the stress of a new baby.
As for us, we just had a new baby and moved from our small rental apartment to the neighborhood with cute little houses and yards. Most of those cute little houses are resident-owned, it's true, but some of them are rented; like the one I'm sitting in right now. Our landlord had no problem with us screwing bookcases to the walls.
posted by escabeche at 7:50 AM on September 8, 2010
you've got 6-12 months before the baby really will need it's own room. Maybe step up the job hunt in this time before commiting to a local move for more space.
posted by jrishel at 7:57 AM on September 8, 2010
posted by jrishel at 7:57 AM on September 8, 2010
Im not sure you're really considering all of the inputs that go into the buying decision, take a look at this extremely detailed rent vs buy calculator and see if that impacts your decision. You might also want to read this 5 part (1 2 3 4 5) series while youre at it.
Alternatively, you could go ahead and buy, with the intent to rent out your new house if you end up changing cities.
posted by T.D. Strange at 8:02 AM on September 8, 2010
Alternatively, you could go ahead and buy, with the intent to rent out your new house if you end up changing cities.
posted by T.D. Strange at 8:02 AM on September 8, 2010
I know that the impending baby is firing all your nesting instincts but please do NOT buy in your current situation, the transaction costs will eat you alive and the last thing you need to deal with on top of a new baby and a new job and a move to another city is trying to sell or rent a house.
If you can stand it, don't move at all until you move for your job (or get a job locally and know you're staying). Tough it out in the 1-bedroom and save money towards a nice down payment wherever you land a tenure-track job.
posted by Jacqueline at 9:01 AM on September 8, 2010
If you can stand it, don't move at all until you move for your job (or get a job locally and know you're staying). Tough it out in the 1-bedroom and save money towards a nice down payment wherever you land a tenure-track job.
posted by Jacqueline at 9:01 AM on September 8, 2010
Picture yourself with a colicky 2-week-old over your shoulder, looking at a spreading puddle emerging from under the sink in your only bathroom or collecting from a drip in your dining room ceiling. Unless this scenario fills you with warm fuzzies, keep renting.
posted by KathrynT at 9:45 AM on September 8, 2010
posted by KathrynT at 9:45 AM on September 8, 2010
Not only is it not against a lease to childproof a house, a lot of cities require the landlord to install things like window guards.
Also, if you screw a bookshelf into the wall, you can always just spackle and paint after the screws come out.
We rent and our place is childproofed - there are a lot of solutions that don't require damage to the apartment.
posted by infinitefloatingbrains at 10:07 AM on September 8, 2010
Also, if you screw a bookshelf into the wall, you can always just spackle and paint after the screws come out.
We rent and our place is childproofed - there are a lot of solutions that don't require damage to the apartment.
posted by infinitefloatingbrains at 10:07 AM on September 8, 2010
Check out this article from the NYT.
The average time to sell a house in the US is one year. The current market is being propped up by constant government subsidy. . . but the government is running out of subsidy.
A year isn't long enough for the market to rebound, but it's enough for it to crash, I mean really crash, because it hasn't hit bottom. The interventions are aimed at keeping it from hitting bottom "while the economy recovers", but the economy, she is a sick dog.
If you wanted to stay in a place for five years, or twenty-five, I might say different things. But buying a house for a year for the first time starts out as a money-losing proposition, and most of the potential is down-side.
posted by endless_forms at 1:50 PM on September 8, 2010
The average time to sell a house in the US is one year. The current market is being propped up by constant government subsidy. . . but the government is running out of subsidy.
A year isn't long enough for the market to rebound, but it's enough for it to crash, I mean really crash, because it hasn't hit bottom. The interventions are aimed at keeping it from hitting bottom "while the economy recovers", but the economy, she is a sick dog.
If you wanted to stay in a place for five years, or twenty-five, I might say different things. But buying a house for a year for the first time starts out as a money-losing proposition, and most of the potential is down-side.
posted by endless_forms at 1:50 PM on September 8, 2010
Think about how much you're going to pay per month and answer these questions:
1. Have you factored in homeowners insurance costs and property taxes? Without a mortgage, you will have to pay a lump sum annually - in my state, it's right after Xmas, which is a crap time to come up with something like $5-7 grand at once.
2. You say some are cheap enough that no mortgage would be needed. So: Do you have enough cash on hand to pay for the house upfront, including closing costs, inspection costs, any repairs required to bring the property up to code, etc? Otherwise, you WILL have a mortgage. I'm baffled by your response that you won't need a mortgage unless you are independently wealthy or are sitting on $300k from some kind of inheritance.
3. Would you be buying a fully furnished home? If not, do you have $3-7 grand lying around to cover the windows with drapes or other coverings and furnish the place to your liking, including baby furniture? Homes don't come with things like blinds, light bulbs, shower curtains, alarm systems, etc. usually done perfectly for you. What about major appliances, like refrigerators and washers and dryers that ALSO don't typically come with empty homes? What about fencing? Is the plumbing current and the water heater recently inspected? What about central heating and air? If not, are all the window units and furnace new or under warranty? Do you have to get an alarm permit in your city/state? (There are a million costs and tasks homes require that never, ever would occur to an apartment dweller - seriously, way more than you can imagine, like HOA dues, cleaning gutters, yard maintenance, garage door maintenance, keeping your alleys clear, tree branches trimmed back from touching your roof, code violations for grass that's a quarter inch too tall because your baby was sick for a few weeks and you couldn't get to it... argh.)
4. Have you checked your credit and gotten pre-approved for a home loan if there is a mortgage required in your case? How much money do you have to play with? Will it get you a property you can enjoy living in, with the proviso that you must factor in PMI, down payments, closing costs, maintenance, property taxes, etc.?
Whatever you think you can afford for a house payment and whatever that calculator tells you... DOUBLE IT. That's how much it will actually cost you. Until we are all living in space colonies or revert to being serfs, that's gonna be my stance on it, though I miss owning a home really badly. It STILL hurts that I had to give up a home I built myself, I was overly proud of it, though it sucked money out of my pockets like a Dyson.
I console myself by drying my with that extra grand a month renting has given me.
posted by Unicorn on the cob at 6:09 PM on September 8, 2010
1. Have you factored in homeowners insurance costs and property taxes? Without a mortgage, you will have to pay a lump sum annually - in my state, it's right after Xmas, which is a crap time to come up with something like $5-7 grand at once.
2. You say some are cheap enough that no mortgage would be needed. So: Do you have enough cash on hand to pay for the house upfront, including closing costs, inspection costs, any repairs required to bring the property up to code, etc? Otherwise, you WILL have a mortgage. I'm baffled by your response that you won't need a mortgage unless you are independently wealthy or are sitting on $300k from some kind of inheritance.
3. Would you be buying a fully furnished home? If not, do you have $3-7 grand lying around to cover the windows with drapes or other coverings and furnish the place to your liking, including baby furniture? Homes don't come with things like blinds, light bulbs, shower curtains, alarm systems, etc. usually done perfectly for you. What about major appliances, like refrigerators and washers and dryers that ALSO don't typically come with empty homes? What about fencing? Is the plumbing current and the water heater recently inspected? What about central heating and air? If not, are all the window units and furnace new or under warranty? Do you have to get an alarm permit in your city/state? (There are a million costs and tasks homes require that never, ever would occur to an apartment dweller - seriously, way more than you can imagine, like HOA dues, cleaning gutters, yard maintenance, garage door maintenance, keeping your alleys clear, tree branches trimmed back from touching your roof, code violations for grass that's a quarter inch too tall because your baby was sick for a few weeks and you couldn't get to it... argh.)
4. Have you checked your credit and gotten pre-approved for a home loan if there is a mortgage required in your case? How much money do you have to play with? Will it get you a property you can enjoy living in, with the proviso that you must factor in PMI, down payments, closing costs, maintenance, property taxes, etc.?
Whatever you think you can afford for a house payment and whatever that calculator tells you... DOUBLE IT. That's how much it will actually cost you. Until we are all living in space colonies or revert to being serfs, that's gonna be my stance on it, though I miss owning a home really badly. It STILL hurts that I had to give up a home I built myself, I was overly proud of it, though it sucked money out of my pockets like a Dyson.
I console myself by drying my with that extra grand a month renting has given me.
posted by Unicorn on the cob at 6:09 PM on September 8, 2010
This thread is closed to new comments.
posted by thomas j wise at 4:25 AM on September 8, 2010 [10 favorites]