Off-Topic Q: Buying or Renting Apartment

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May 10, 2007 3:06 am

Hey gang:



I graduate college in a month and will dive into the real world soon.
Very nervous and somewhat disoriented being that I am bombarded with
all sorts of pressures left and right. I need a place to live and have
found apartments not too far away from downtown, where I will be
working.



In terms of the place I live, should I buy or rent an apartment?



Renting is fairly straight-forward and is a low-risk strategy. The
place I am currently looking at is about a $1,000 a month for myself.



Buying my own property is quite an ambitious endeavor and is somewhat
difficult. The reasoning for buying a condo / apartment / house is that
the property appreciates in value and I'm paying mortgage instead of
rent. Real estate in the city almost always grow in value over the
long-term. I'll only have to make a down-payment and simply pay monthly
mortgage payments. I could even get a roommate if I buy something more
than one bedroom and have my roommate's rent go towards paying off my
mortgage. Either way, when I decide to move, I can sell the property
for a decent return and my mortgage payments would actually go to some
use. The downside to buying a property is that it is quite expensive
(~$300,000) and takes a lot of effort to purchase, finance, maintain
and oversee.



What do you guys think? Any suggestions? What is the outlook on the
housing market? Although the sector is on the down-turn, the median
house prices have stayed relatively steady. Should I buy or rent? Any
ideas would be highly appreciated. Thanks in advance.

May 10, 2007 8:17 am

You're going to be an FA and you can't figure out a buy vs. lease (or buy vs. rent) schedule?  Buying is expensive, there are a lot of associated costs, and if you're becoming a rep, you have about a 90% chance of failing during the next 2-3 years. 


Obviously I am telling you to rent, but here is another thought.  You are going to spend all your time anywhere but home, so why not just get a little studio apartment for $500-600/mo., just to have a roof over your head during the little sleep you will get.  Save your money for more important things, like marketing, or maybe Xanex.

May 10, 2007 9:49 am

If in doubt, rent. 


If I had to do it again, I would have bought as soon as possible.  I would have bought a 4 or 5 bedroom house and took in roommates to cover 100% of the mortgage payment.

May 10, 2007 10:44 am

If you are new to the area definately rent first. A year or few of renting won't hurt you financially in the long run. Renting will give much more flexlbility if you wish to change the scenery or your career path. Both odds on favorites for newly minted college grads.

May 10, 2007 11:29 am

Buying a house to rent out is a great long-term strategy...the rent can pay the mortgage and once it's paid off you've got a continuous stream of income from a house that's also appreciating in value over the years.


BUT it's probably not something you want to do right out of school while starting your first job; it takes a decent amount of time to be a landlord (not a ton, but you have to be around) and you have to have some depth to your bank account to get you through the times when you can't find a tenant and have apartments sitting vacant in your house. 


I'd wait at least a year or two to let things settle down a little before you think about committing yourself to something as long term as buying.

May 10, 2007 8:01 pm

Even better, know anyone wanting a room-mate?


Trust me, for the first few years, if you do it right, you won't have time for much of anything else besides sleep. So, all you're going to need is a place to crash at night.

May 10, 2007 9:44 pm

I would suggest renting, here is a good article on the subject. http://articles.moneycentral.msn.com/Banking/HomebuyingGuide /WhyRentToGetRicher.aspx?GT1=10022

May 10, 2007 10:18 pm

I would never advise anyone to buy a house before they are around 30. Your going to switch jobs about 5 times. Rent.

May 10, 2007 10:27 pm

I would never advise anyone to buy a house before they are

around 30. Your going to switch jobs about 5 times. Rent.





For the first time I agree with this person.



You hit the nail right smack on the head!!!! Good post BankRep!!