Buying Land?

[thegardeningmedstudent]

I've read enough threads to be convinced that buying a house during medical school is not the greatest idea.

However, I was thinking of buying land for a few reasons. I worked for a few years before applying to med school and am working on making my money grow during med school. Investing and such. And then maybe using the land to build a house (I have a partner with an income) if I end up in the same city for residency.

I don't think land ties a person down in the same way that a house does, and I have family that could maintain it if I were to go away for residency (though I'm hoping to stay in the same area).

I'm just wondering if anyone has had experience with this.

Thank you for your kind responses!

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[Goro]

Not a best use of your money. Keep in mind that if you buy land, you'll have to pay property taxes on that.

 

[RangerBob]

I agree with Goro.

Keep in mind you can't always build on the land you buy. First you need to make sure it's zoned properly. And if it doesn't already have utility hookups (sewer, water, gas, electric), then you may have to spend a lot of money to get those to the location (if even allowed--here in Coastal CA we have cities where no further water hook-ups are allowed). Building a home takes a long time. Even if you go with a pre-designed home, you're probably still talking about almost a year to build it in normal times, so maybe 2 years in COVID times. So to be move-in ready for residency, you'd have to start building before you even match. If you want to design the home yourself, you pretty much need to get an architect now.

So not many good reasons to buy a home.

Use that extra money to contribute to retirement accounts/Roth IRAs and minimize your student loans.

 

[Lost in Translation]

Who says buying a house is not a good idea? It’s 4 years and you can sell the house if your residency is in another city. Plus since you’re making mortgage payments it builds credit. You can’t sell your rental agreement.

Now, if you can’t afford a mortgage then you’re SOL. But never rent when you can [afford to] buy.

 

[RangerBob]

Who says buying a house is not a good idea? It’s 4 years and you can sell the house if your residency is in another city. Plus since you’re making mortgage payments it builds credit. You can’t sell your rental agreement.

Now, if you can’t afford a mortgage then you’re SOL. But never rent when you can [afford to] buy.

Have you purchased or sold a home before?

I would hate to have to try to sell a home in the middle of moving for residency (or worse, sell as a busy intern).

I bought a home in residency. We sold it a few months prior to moving for fellowship as we didn't want to sell from afar (we also didn't know if it would sell within a few months--some markets are softer than others). It fortunately sold, but we had to deal with moving out, finding a short-term rental, etc. But at least I was my 4th year of PM&R residency (ie., good hours) and we weren't having to sell from across the country where my fellowship was.

I knew of some parents who purchased homes for their med student children, and saw it as an investment (they rented it to them, built up equity, then hoped the kids could find new med students to take over the lease as med students are typically more responsible). But I didn't know any med students who bought a home.

Owning a home was a blast. I loved it. But they take a lot of work and maintenance--both hobbies of mine, and how I like to spend my free time. They also can take a lot of money (it cost us 8k to replace the furnace/AC when they went bad). My mortgage was significantly lower than renting a similar sized home/apt, but when you added up all the work I did (voluntary or required maintenance/repairs), I actually spent a little bit more buying the home, despite selling at a profit. Plus the stress of selling as alluded to above. Was still fun and worked out great for me! But not everyone likes to work on a home or has the time to like I did.

 

[voxveritatisetlucis]

Just buy the VTI or VOO and call it a day

 

[Doctoscope]

Just buy the VTI or VOO and call it a day

Nah, go big or go home. Still holding onto $GME and $AMC and never letting go until we get the MOASS. You can't lose 90% of your portfolio if you never actually sell.

 

[voxveritatisetlucis]

lol

 

[deleted1081396]

It's called land banking and it has a notoriously low return on investment.

 

[Tenk]

No. Far better off investing in the market during a recession.

 

[snooper]

Now, if you can’t afford a mortgage then you’re SOL. But never rent when you can [afford to] buy.

It depends - in many, if not most cities today, you're better off renting - e.g. Austin, San Francisco - or check Palo Alto - , Seattle, New York City...

 

[JStarMD]

"Investment" advice on the "Student Doctor Network". Uh--huh..............................

 

[thegardeningmedstudent]

Thanks for the responses, everyone. I guess I'll reconsider, but I definitely am not buying a house.

 

[thegardeningmedstudent]

I agree with Goro.

Keep in mind you can't always build on the land you buy. First you need to make sure it's zoned properly. And if it doesn't already have utility hookups (sewer, water, gas, electric), then you may have to spend a lot of money to get those to the location (if even allowed--here in Coastal CA we have cities where no further water hook-ups are allowed). Building a home takes a long time. Even if you go with a pre-designed home, you're probably still talking about almost a year to build it in normal times, so maybe 2 years in COVID times. So to be move-in ready for residency, you'd have to start building before you even match. If you want to design the home yourself, you pretty much need to get an architect now.

So not many good reasons to buy a home.

Use that extra money to contribute to retirement accounts/Roth IRAs and minimize your student loans.

Zoning is not an issue in my area. I've already set up a few savings accounts and my partner has done the same. We've also dabbled in investing and are trying to learn more. I was just wondering if land was a worthy investment.