Profile picture for mpoines

I'm moving to Oklahoma for a year or two and wondering if it makes sense to buy???

I am moving to Shawnee OK which is about 30 miles from Oklahoma city. I'm investigating purchasing a home for 60k. I know rent is a little high for this area at 6-800 a month. I dont know if it makes sense to buy if I only plan on staying for 12-20 months??
  • April 28 2014 - Shawnee
  • 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 (8)

Profile picture for DickBarr
It really depends on the market where you are moving.  If you are moving to an uptrending or stable real estate market, it is very possible to have it make sense, especially if you are moving to a location with low property taxes. 

Typically, most models show home ownership versus renting with a break even point at 5 years or so.  However, that doesnt take into account selling the house, it only accounts for the costs of both.

If it is foreseeable you will do well by purchasing.  

Safe to assume that 20 month's of rent will cost approximately $20,000 more or less.  This will vary based on the market your moving to.
 
Compare that with purchase and sell under these scenarios. 
    - Option 1, Buy for $60k/Sell for $60k
-Purchase costs: Total $63,000
-Purchase price $60k
-Attorney & Closing Costs $3k
-Sell for $53,400 net
-Sell Price $60k
-Closing Costs/atty $3k
-Real Estate Taxes ($300/month x 20) $6k
Net Loss $15,600

    -Option 2, Buy $60k/Sell $70k
Net Loss $6,200
    -Option 3, Buy $60k/Sell $80k
Net Gain $3,200

 Bottom Line: 
 Renting, guaranteed $20k Loss
Buying and Selling for Same Price, $15k Loss
Buying and Selling for $10k profit, $6,200 Loss
Buying and Selling for $20k profit, $3,200 Gain

You would have to sell the house for $5k less than you paid for it to make it worse than renting.





 
  • April 29 2014
  • 1Yes

  • 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 Blue Nile
You may want to look at this thread:
http://www.zillow.com/advice-thread/I-don%27t-understand-the-rationale-behind-renting-someone-please-explain/534635/

It covers some of the issues.

Realtors tend to like to tell people to buy, as their income depends on the turn-over rate of ownership housing.  But typically, the "break even" point is about 5 to 7 years, depending on specifics.

Throw a dog into the mix that is hard to find a rental to accommodate, or other "special circumstances", and that could throw the break even point off a bit.
  • 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.

Profile picture for wetdawgs
Here's a link to the NY Times rent vs buy calculator.

Put into your mental equation the time it takes to buy and sell.   2 weeks to 2 months looking and then 4 to 8 weeks to close.   Selling - you have to spruce it up and clean it, market it (with an agent perhaps), have the buyer do all inspections etc and then finally close (plan on 4 to 8 weeks to close after you get a good offer; days to good offer?  I have no idea for Shawnee OK.

  • April 29 2014
  • 1Yes

  • 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 zuser20140120081814583
Buying houses to live in is generally best for people who intend to stay in a home for many years & want a higher degree of control of their residence.  Others are likely to be better off renting.  There are articles here on Zillow & elsewhere that discuss the issue of buying vs. renting.

There are a lot of expenses involved in buying & selling a house and getting a mortgage that do not apply to renting.  You'll probably have to pay a 6% commission to the agent who helps you sell it when you leave.  You'll probably have to pay a lot of closing costs, too, either when you buy or when you sell (or both, depending on the deals you make).

The value of the house might go up enough in a year or two to offset those costs, but that is unlikely in such a short time.  It is also possible (though also unlikely), that the value will go down in that time.  Do you want to take that risk?

If you have a 30-year mortgage, you'll be paying almost all interest (very little principal) for many years, so you won't be building much equity.  Basically, you'll be renting money instead of renting a house.

Do you want to make the decisions about remodeling, painting, etc., etc.?  Or would you rather have someone else be responsible for maintenance?  If you want those responsibilities/privileges, any extra cost might be worthwhile.
  • April 29 2014
  • 1Yes

  • 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.

There are many advantages to owning rather than renting.  Prices are still trending upward right now so it could cost a good bit more to buy if you wait a year.  Who knows what prices will do in your area.  Rents could go up too after your first lease term as well.  At least when you own, you know what your fixed expenses are.  You should also ask an accountant about tax advantages of owning.  If you are selling closer to 20 months, you should be able to recoup your expenses of buying.  Let a realtor help you to find a good deal that would be more likely to hold or increase in value.  Location, location, location.  Find out how much houses have increase in value over the last 2 or 3 years.  Some areas have already come back to pre crash prices.  If your area is still down, it could still be a good time to buy.
  • 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.

Profile picture for Blue Nile
Make sure you add up ALL the transaction costs, not just the nominal 6% Realtor fees, recording fees, loan origination fees, title insurance, title report, inspections....  Usually between 10% to 25%.  I tend to consider it closer to the 25%, but then I tend to include moving costs, and you pay those transitioning between rental units too.

Zillow offers a "forecast" on their local info pages now (tab at the top of the page).  But that won't tell you if you can negotiate a fixed rent for more than 12 months, nor how much the landlord may decide to raise the rents.
  • 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.

Profile picture for GMerino
That is a tough call; you would need to consider closing costs, down payment, time, etc.  Not knowing what type of loan your doing, the puchase price is low and your payment is going to be around $500 to $600.00 a month. 

Knowing that I would be there a short period it would be best to rent.  If your looking for an investment and could sale in a few years for more consider buying.  It is all up to you!
  • April 28 2014
  • 1Yes

  • 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 Alyse Sands
I don't know what the market is like in OK but $60,000 isn't much house these days. I can't predict the future but, if you can buy now for that amount, there's a chance you can break even or make some money in two years.
  • 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.