Hello, oh-wise-MMM-ers!
I discovered the YMOYL/ERE/MMM plan a couple of years ago while still in graduate school and was instantly converted. Unfortunately, grad school doesn't pay well enough to pursue that plan very effectively. Fortunately, I am now free and beginning my first job--yay! Time to start seriously saving!
My goal is to continue living on the equivalent of what I made during graduate school (roughly $1700/month) while saving all the rest--which means I should end up saving roughly 2/3rds of my net salary, based on my back of the envelope calculations. I already have a paid-off car that runs like a dream and averages ~36 mpg for errands, and I'm accustomed to living on not-very-much (thanks to my black-belt graduate student training--always go for the free pizza!)
My question arises around housing. I have to admit that I am LOVING the mortgage rates right now, and I am seriously tempted to buy a house in my new environs. For one thing, there is a sizable <$100K pool of nice housing in the area I just moved into, which by my calculations and the use of a relocation bonus for a downpayment means something around $700/month (30 yr mortgage--~$900 for 15yr) or less for housing, counting taxes, insurance, etc. Rentals near my job appear to be averaging higher than that--more like $800+ if I'm living in an apartment that is more or less functional and in a fairly safe neighborhood (since I'm a female living alone, that's a consideration).
It sticks in my craw to pay more to rent than buy... BUT, this being a new job, I don't know how long I'll be here. Maybe 1 year, maybe 2, maybe forever!
So, first question: rent or buy?
Second question (depending on the answer to the first). I have the option of many lovely neighborhoods to buy in, all with different characteristics.
My decision is boiling down to:
1) buy a slightly more expensive house (~100K) in a easy-to-sell (and rent!) neighborhood that appears to be appreciating rather rapidly, but is 5-6 miles from work. I figure that if I decide to move a few years into my job, this will facilitate the move.
OR
2) buy a more-bang-for-my-buck house in the 75K range in a more residential, less desirable, longer-time-to-sell, harder-to-rent neighborhood that is ~2-3 miles from work (for reasons involving what I'm willing to pay, closer than 2 miles isn't going to happen, but no worries! I have (and am accustomed to using) a bike--I just need to chart out bike paths in a unfamiliar and bike-unfriendly city!) Regardless of the rent/buy decision, I do of course always have the option of splitting the costs with a roommate, but for now to keep the numbers simple I'll assume it's just me. =)
Please, oh knowledgeable ones--can you give me the benefit of your experience on this decision? I'd rather start things off right and start barreling down the path to financial independence as quickly and painlessly as possible!
Thank you so much for your advice and accumulated wisdom!
Tracy