Buy vs. Rent Question by First-time Buyer
By: Diane Tuman, Zillow Content Manager | November 5, 2009
Zillow user Muddslide says in Zillow Advice:
It’s nice to hear there really are people who have been careful and not been sucked into the subprime seducements of the past few years. What would you do?
- Stumble it!
- Categories: Real Estate Advice
Comments
6 Comments so far
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DebtFree on November 5, 2009 2:53 pm
Easy question to answer. Wait for the housing correction to end in 2012 / 2013 then begin shopping for a fairly-priced house with (at that time) your $300,000 savings in the bank:
graphics.nytimes.com/images/2006/08/26/weekinreview/27leon_graph2.large.gif
Until then, enjoy taking vacations, eating out, and spending time with friends and family as the recession deepens and the housing correction unfolds.
Raina Pierce on November 5, 2009 8:21 pm
It’s understandable to be a little gun shy on purchasing your first home, I have been there. I believe everyone that owns a home understands. At what time do you purchase??? That’s the question that only you can answer. There are many things to take into account primarily interest rates…talk with your loan officer if you’re going to be financing at all any part of your mortgage to get a better understanding in what direction the market is heading this can help you tremendously in making a decision. The best of luck to you.
charleston rentals on November 5, 2009 11:29 pm
You must be wiser in choosing your own property. You must think if what you will choose. But if your money is enough to have a home which will completes your needs, buy it. If you’re having some budget just rent for a while then plan a better property you want to get. Get some advice to some people who is very inform to their fields.
Houston Homes For Sale on November 6, 2009 2:08 pm
This question is one that should not be given a blanket answer. All I see above is overly generic and of no real value.
Muddslide, needs to do a rental equivalent calculation for the area they are from using market rents for similar homes to what he would like to purchase. Now if the carrying cost of owning exceeds the rental equivalency for your area you need to look how far off it is from rental equivalency calculations in past years. This will give you an idea of how much risk exists in you over paying for the property at today’s prices. Once you have determined this he must decided for yourself how much more are you willing to pay financially to enjoy home ownership.
When you have answered this question you have a number as to what it makes sense for you to pay if prices are above that then do not buy. If prices are below it buy now. Hoarding dollars will not save your financial house if the American economy completely collapses. As with the debt load the government is carrying, the feds will have to default on treasuries if things fall apart. If the Federal government defaults on treasuries the dollar will be worthless as we go through super hyperinflation.
rick on November 6, 2009 7:41 pm
Do you have a family with kids? Why are you buying? If its for investment purposes don’t you’ll lock yourself into something you won’t be able to sell.
You would have never saved that much cash if you owned a home.
If you have kids and you plan on staying in the home until they are out of school and they are under 10 years old or you plan on staying at the home for 20yrs it may make sense, use the link below it will tell you if its a good idea.
http://www.nytimes.com/2007/04/10/business/2007_BUYRENT_GRAPHIC.html?_r=1
Lea on November 7, 2009 10:31 pm
This is a tough thing to decide, choose on what is needed first in your life. Make sure you have extra resources in case you buy this house.