Profile picture for user6263465

Buy, Rent, or rent-to-buy?

My husband and I are about to move to Salt Lake City for me to begin my PhD program at the University of Utah. Since we're bringing our daughter (age two) who struggles with new environments, we would really love to move only once (meaning that the home we move into in Utah would be the only home we live in for the remainder of my PhD program. 

We will be in Utah for 5 years, so obviously buying would be preferred, but since my husband hasn't found a new job yet, and most likely won't have one month's worth of paystubs at his new company in Utah at the time we're looking at buying, we're considering renting instead. 

A lease purchase option seems like the perfect compromise, since it would lock us into a house that we can purchase and then stay in for the rest of our time in Salt Lake City, but I continue seeing agents advising against this option. 

anyone have any advice for us? 


*I should note that my husband and I have lived in SLC before, so moving and getting used to the neighborhood isn't a concern for us. We know what areas we would like to live in.
  • April 28 2014 - Sugar House
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (7)

Here are my 4 reasons to buy instead of rent:

Mortgage rates are going up.
  Home prices have been low for the last several years, during this same time frame, interest rates have also been low – this one-two punch has created record-high affordability for the last four years running, causing buyers to believe that this window of opportunity won't be closing anytime soon.

Rent is going up.  Rental rates in many areas are also on the rise – in fact, the foreclosure crisis has acted created additional demand on many markets' rental housing inventory in several different ways. First, former homeowners who lost homes to foreclosure now need to rent; as well, buyers in foreclosure hot spots have been hesitant to buy, many electing to stay renters far beyond when they would have otherwise. As a result, rental homes are in high demand – and rents are rising.

Your income and career are stable for the foreseeable future.  The smartest homebuyers look to their lives, not just the market, for signals about when the time is right to buy. Home buying is a long, long-term endeavor these days. The goal is to be able to commit to staying in the same place, geographically-speaking, for 7 to 10 years before you buy (more in a foreclosure-riddled market, less in an area that has been more recession-resistant).

You can reasonably predict the home you'll need in the years to come.  Since successful homeownership requires that you be ready to be in the place for a good number of years, best practice is not just to buy a home with the space and number of rooms you need right now – rather, you should aim to buy the home you'll need 5, 7 or even 10 years down the road (to the best of your ability to predict, of course). 

  • July 06 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for April and Greg Tracy
I'll tell you the same thing I tell parents of kids attending the University. Being here for five years I think you would be better off buying and make some equity (and tax write-offs).
The market is currently in the beginning of an up-cycle so you should be able to enjoy some good appreciation in the next few years (real estate cycles tend to be 5-7 years).

Work with a great agent who knows the areas and values really well so you can find a great investment. I'd be happy to help if you'd like :)

Greg
  • May 17 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

My experience shows very few sellers will take a lease/option and very few buyers have enough saved for
option money.  Seller finance is also rare, which leaves you with renting.  Since you know the neighborhoods that you would consider buying in look for rentals in these areas.  This will make your move easier when you are able to buy. 
  • April 30 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You need an experienced realtor in your area that specializes as a buyers agent.  You might be able to find a seller that would do owner financing but you need an agent that represents you so you know you are getting a good deal and the the owner financing is good.  If i can help you find a really experience buyers agent, let me know.  The buyer's agent can refine your search options, even sellers willing to do owner financing.  
  • April 29 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Rent for 6 months. If the job works out buy a home if you are staying for more than 3 years. Lease to own options are terrible for many reasons. Read real experiences online about them not from investors. Either buy or rent but never lease to own.

[website deleted by Zillow moderator. Please see our Good  Neighbor Policy for posting guidelines]
  • April 28 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I have to ask you to turn this around - why would you lease/option your property, and under what terms?

If you had a rental property that you were thinking of selling, what would make you sell it on a lease/option? Especially to somebody that can't get a mortgage?

In my experience, the typical lease option goes something like this: the seller requires a significant down payment, maybe 10% or so. Non-refundable, of course. Then, the rent is somewhat higher than market, maybe 5-10% or so. There's an inevitable dispute about maintenance and repairs, and when the time comes to exercise the buyer's option, one of three things can happen:

1. They can't get a loan, so they've lost their down payment and the excess in rent that they've paid.
2. They can get a loan, but now that they have buying power, they'd rather buy another home.
3. They can get a loan, but the house they're trying to buy doesn't appraise.

Since you know that you are likely to move in five years, I would suggest that rather than risk 10% of the purchase price of a home, you invest a little bit of that money into a counselor to help your child make this transition and the next TWO easier.

All the best, 
  • April 28 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Not sure if you have family in SLC that you could possibly live for a short time while your husband finds a job and that way it gives you time to really pin-point where you really want to live and your not pressured to rent and/or rent to own. 

It has been my experience that the home that you would be buying that route is always higher than what the area value is going for.  I personally would not do this option.

Take your time!  There are many basement rentals that you could do month to month in Utah. 

  • April 28 2014
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.