Author Topic: Need Advice on Buying Home VS Renting  (Read 2242 times)

GHG7F0

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Need Advice on Buying Home VS Renting
« on: November 13, 2016, 08:16:17 PM »
I recently moved to Roseville Ca. I'm considering purchasing a home. It is my wife, new baby and myself. I expect to be here for 7 years and then I will retire to a low cost of living area with no state tax. At this time I will sell or rent it.

The home I have found is new and it is $430K. It has a Mello Roos fee for $225 which I really don't like. It has no HOA fees. The property taxes are 1.1%. I can finance with my VA 100% or 20% down conventional. I am also able to pay cash.

If I was to rent a condo instead I can do this for $1375 per month or a house would rent for maybe $2000.

Which one would be better financially?     The other possibility would be to buy a condo for about $220K plus HOA fees of $231.

Thanks!
« Last Edit: November 13, 2016, 08:18:06 PM by GHG7F0 »

waltworks

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Re: Need Advice on Buying Home VS Renting
« Reply #1 on: November 13, 2016, 08:27:26 PM »

Another Reader

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Re: Need Advice on Buying Home VS Renting
« Reply #2 on: November 13, 2016, 08:49:37 PM »
You might consider buying an older house that meets your needs and has no Mello-Roos.  Should be much less expensive.  I see a number of nice houses in the $350k range on Realtor.com.
« Last Edit: November 13, 2016, 08:53:03 PM by Another Reader »

Rubic

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Re: Need Advice on Buying Home VS Renting
« Reply #3 on: November 14, 2016, 06:33:49 AM »
If I was to rent a condo instead I can do this for $1375 per month or a house would rent for maybe $2000.

To accelerate your FIRE date, rent the condo.

Quote
The other possibility would be to buy a condo for about $220K plus HOA fees of $231.

HOA fees and property taxes don't stay constant.  When they change, they only
change in one direction: UP.

In the 6 years I owned my condo, my HOA fees doubled and property taxes
went up 25%.  This doesn't include HOA "special assessments" including a
$2000 assessment that I paid just one month before selling my condo.

Relevant article: http://jlcollinsnh.com/2013/05/29/why-your-house-is-a-terrible-investment/

This isn't to say that any condo/house purchase is terrible (mine worked out okay),
but given the figures you presented, a condo rental looks like your best option.

DeanW5

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Re: Need Advice on Buying Home VS Renting
« Reply #4 on: November 15, 2016, 05:25:09 AM »
Many good pieces of advice were given here. Especially, I like one about buying an older house.
My personal view is always consult with real estate professional, when you’re make such big financial decisions. They know the market better, thus they can find the most appropriate apartment for you. I think, that buying is a better way in your case. 

Spitfire

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Re: Need Advice on Buying Home VS Renting
« Reply #5 on: November 18, 2016, 02:06:11 PM »
Not to hijack, but does the 1% rule for buying a house to rent out also work for deciding to rent vs buy? For example, if the rent in the area for $300k houses is $2,500 a month, is it smarter to rent? Or is that too simple?

waltworks

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Re: Need Advice on Buying Home VS Renting
« Reply #6 on: November 18, 2016, 03:23:54 PM »
Too simple (just because of tax advantages/disadvantages, if nothing else). Use the calculator.

-W

Metric Mouse

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Re: Need Advice on Buying Home VS Renting
« Reply #7 on: November 19, 2016, 05:07:33 AM »
If I only planned to stay in an area for 7 years, I'd never buy.

Dicey

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Re: Need Advice on Buying Home VS Renting
« Reply #8 on: November 20, 2016, 12:09:49 PM »
I'm familiar with Roseville and Mello-Roos (ugh). In CA, seven years is usually a pretty safe timeline, but is not guaranteed. BUT, you need to keep shopping. You've fallen in love with a too-expensive house.There is a lot of variety in the area. You can find something more affordable.