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Buy or Keep Renting

Looking for input on the thought of purchasing a house next year.
My gf and I are looking to move from out current apartment to a place with a yard and garage. In searching, it seems like this criteria leads us mainly to home rentals so now we are wondering if makes sense to buy.
Given the timeframe (next June) we are probably looking at a $15,000 down payment. I make around 60k/yr and she makes around 30k. I would be officially purchasing the house but we would share the expense.
Our only worry is that we may see ourselves moving in 3-5 years to a new region for school/jobs. I'm not sure if it makes sense to buy with the idea that we might sell in a few years.
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November 01 2013 - Town of Newmarket
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Answers (15)

I like the idea of buying instead of renting.  You will own the home and then you can get tax benefits.  You can live there for 3-5 years and the property will most likely increase in value especially if you take the time to do small improvements.  Small improvements such as new mirrors in bathrooms, new light fixtures, new faucets, 
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November 15 2013
Here's an idea:

You may want to purchase a "fixer-upper" that will appreciate in value that you will enjoy, and then sell if need with a profit in 2+ years. If you move then you have some extra cash in your pocket for your next home purchase, tax write offs and you can make improvements that an apartment would not offer.

This idea is not everyone's "cup of tea" but it sure can make a lot of sense for the right buyer!
Lastly, meet with a good Mortgage agent and a Real Estate Agent.

Good luck!
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November 15 2013
If you cannot or are not ready to buy in an area you will be happy and grow in then rent until you are ready.
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November 07 2013
As an expert in the business for over 25years, you have some options.  First, if you're moving in a few years, it doesn't make sense to put down a large amount, unless you're buying a home where you're getting it for a really low price, maybe a little project/fix up, then make a profit in a few years, that's the only advantage in buying that I can see happening in your situation, where you come out the winner.  Otherwise, I wouldn't take a chance, you can possible lose money, especially if you pay top dollar since the current market is quite volatile and uncertain at this time.  If you're not up for a fixerupper in your spare time, then renting might be the way to go...
Real estate is mostly a long term investment, unless you're into flipping homes or renting them out.  IMO 
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November 03 2013
Profile picture for seahuston
Thank you for all if the advice! There is a lot to sort through here and also some good steps to move forward with. I will definitely meet with a lender and look into preapproval as that will definitely shape the search more. While I understand the markets are good right now there are still some unknowns as mentioned. I don't want to buy a house that isn't quite what we want just because it is possible to but. The NYT calculator is a nice ball park place to start and kook at the decision. Thanks for the help, next stop: lenders!
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November 03 2013
Maybe if you buy a 2 unit house you can live in one unit and rent the other then when you decide to move you can rent out the side you lived in now you have 2 extra incomes each month
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November 02 2013
That really is a complicated question. Looking at the market, it appears that the volume of sales in Newmarket is rebounding from the lows of 2007 to 2009.

That being said, the most likely properties that I saw in your price range appeared to be foreclosures, which offer the potential for building sweat equity. However, it also means that for the short term you will be busy doing the updating and upgrading to be able to minimize your market time when it comes time to list the property for sale.

Everyone does have valid points in this being a great time to buy, but the short term that you are looking at does not bode well for a recovering economy. I am not familiar enough with the Newmarket real estate market to tell you if a hold time of just a few years would make sense with the closing costs, mortgage interest and then selling costs at the other end.

My advice.
1. Contact a mortgage lender and find out where your credit scores fall and what range of mortgage payments you would be comfortable paying given the possible taxes and fees for a home in the area. Keep in mind that a preapproval is a rough number AND that you do not have to nor should you buy a home at the maximum amount. Doing so will likely put more strain on you should there be any issues.
2. Contact a local agent armed with that information and talk to them. You may have to do some searching to find an agent that is able to discuss your situation and give you an honest assessment of your best path.

Keep in mind that unless you have a contract with a real estate agent in NH, they do not represent you and have to share any information you give them with the listing agent/agency. You do not have any confidentiality and should not share your bargaining position with an agent until you have signed a Buyer Agent Agreement.

Good luck!
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November 02 2013
If you buy a home its considered an investment but if you keep renting, the landlord is receiving the investment instead of you.  Home ownership is what you make it. You get out what you put in.
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November 02 2013
It makes sense, and it may not work out.

You can do the calculations for yourself, or you can consult with your CPA. Generally speaking, if your new monthly payment is 20% higher than your current rent payment, then home prices would have to go up about 1.75% a year for five years to allow you to break even; 3% a year for three years.

Even so, it MAY be worth it to you to spend a little more to live the way you want to for the next few years. 

And, we don't know what the future holds. That's from the financial end.

On a personal note, if you decide to buy a house together, it is essential that you craft a partnership agreement with your attorney, not because you're going to break up and battle over the property, but because there are many other ways that joint ownership can run into trouble as events unfold.

All the best,
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November 02 2013
Profile picture for wetdawgs
I hope you go about this sensibly and investigate the claims made by many agents on this thread on whether they are true for your personal situation or not.

Will the mortgage interest deduction benefit you on your taxes?   It depends on whether or not you can itemize and the amount of the deductions.  Some people get zero benefit.    The more expensive the house and more deductions you  have on your taxes, the more likely you can have some benefit.   (It is not a tax credit, but may reduce your taxable income). 

Will you gain equity?   Sometimes yes, sometimes no.   If you bought in 2008 (five years ago), you may be underwater or barely break even.  If you subtract 6% real estate commission plus other selling fees, you are less likely to break even.

Do you want to paint your walls purple?   When you sell in three to five years, you'll want to paint them neutral to help sell.   Some people love to paint so it doesn't matter.   Others do a sloppy job so it is best to hire a professional.

It is up to you, but investigate claims made by agents.   A salesperson is not always the best for education, their income depends on you buying.  Here's a link to Zillow's buyer's roadmap.  It is a huge financial commitment and reduces your flexibility.  

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November 02 2013
Yes, buy! The mortgage interest write off on your taxes rocks and in the 2-3 years you are there you are building home equity and if you want to paint the walls purple, you can-- no landlord to tell you what you can or cannot do. Good luck!
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November 02 2013
Now is an amazing time to buy. Interest rates are low. Regarding your concerns on possibly selling in 3-5 years, the average homeowner owns a home for 5-7 years due to a growing family, relocating, downsizing, etc so it is common. The amount of equity you can make on a home and the tax benefits are so beneficial. Rents continue to increase. Especially on the Seacoast. Please let me know if I can help.
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November 01 2013
Consider it an investment with good return potential.
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November 01 2013
Profile picture for wetdawgs
Buying can be expensive, and you can't suddenly move without considerable expense in selling (plus the hassle of getting the house on the market and time to sell).

It isn't totally a financial decision, but, if you are interested in the finances the buy vs rent calculation from the NY Times (link)

You are bound to get "buy now, never a better time" responses, but go beyond that and think it through carefully for your situation.   I would  not buy for a 3 to 5 year time frame.  I have done accidentally (due to layoffs), but wouldn't do so intentionally.

In addition, if you buy with a partner that is not legally recognized (e.g. girlfriend, boyfriend, sibling etc), make sure you have a very carefully defined contract (use an attorney) to cover the purchase. It would address responsibilities, what happens if one party wants out, how to split proceeds etc. 
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November 01 2013
Buy while the prices are down and the interest rates are at historic lows.  There has never been a better time.
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November 01 2013
 
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