Buying vs renting house during residency

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I've read the multiple threads on here and on WCI on buying vs renting but I'm still on the fence. I don't want to add more debt to my student loans.

I'm currently finishing first year in my residency in a small city, and renting a house for $1000 per month, which is higher than the average cost. My landlord wants to raise the rent by 15%, but will probably negotiate down to 10%. He states that he's giving partner and I a good deal because he saw a similar house being priced for $1500 (that place is still not rented), and if we weren't such good tenants, that's how much he would increase the rent by. The average around here is $800-900.

We've been good tenants - fixed up the place here and there, landscaping, always pay on time, and partner even helped him fix up his own place. We did look at renting again, but we have a dog, which complicates things, and the rental market does not have as many options as buying. We can likely find a place for $900 a month, but it will take more time.

Houses in this area are about $135k. There is currently one we are considering that was completely renovated so I am hoping it will require little upkeep. The housing market in this area favors buyers. We will mostly likely will stay here for the next 3 years. I definitely don't want to be spending more money per month on housing costs. Also, not sure how much of a hassle it is to buy a house with mortgage paperwork and the like. I am okay with potentially losing money when I sell the house if I am on an attending's salary.

Have those of you that have bought your own place felt it's been worth it? What things should I be considering when looking at houses in the area?


It's not even the rent vs mortgage that's the issue. It's unexpected maintenance costs and trying to deal with that with a busy schedule.
 
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Time and money are two things most residents don't have.

I actually had more time in residency than most (PM&R has lighter hours), and working on the home was a hobby. I enjoyed it. I also saved up--we had to replace the heater/AC. The $780/month in mortgage/taxes/insurance for my house was actually closer to $1200/month after taking into account all repairs/upgrades/landscapring/etc. A lot of that was optional (like landscaping), but a hobby. We sold the home for more than we paid, and in the end, I probably lost about $100/month compared to renting a similar sized home in my area. And that was with me doing most of the maintenance and work.

We were also really lucky and sold the home at almost the perfect time. Do not count on being able to sell your home right when you want to leave (we sold two months prior to finishing residency, and had to rent an apartment for two months--I didn't want to sell from afar). Small cities can be rough markets to sell--remember, if it's a buyer's market, then it's not a seller's market, and you're going to be a seller in a few years.

Think very carefully before buying a home--and do not do it for financial reasons. We bought a home because we wanted a home and I wanted to work on a home during my free time. I can almost guarantee you that during the span of a normal residency, you will not come out ahead vs renting. I would either find a new place to rent, or pay the rental increase.
 
Also keep it mind, it becomes more complicated for non-married individuals to buy a house together. You are, in essence creating a partnership, where often no partnership agreement exists.

Married persons have divorce as a legal method of separating assets. Owning a property with an ex doesn't sound fun.

EDIT: I would move, and I would force this doofus to let me out of the contract.
 
I'm just not sure if buying a house will give more peace of mind than renting.

I rented all through residency and fellowship and worrying about the living situation was at the bottom of my fears. Find a better landlord!
 
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Thanks for all the advice. Will be looking at rentals first, and if cannot find something, will probably go for the mortgage. Landlord wants 50% rent increase now, so won't be staying here regardless.
 
<5 years, would never advise buying, except as a planned investment property

>5 years, depends on circumstances as laid out by others.

I say this as someone who bought prior to their intern year. Property has increased significantly in value. Has been a pretty nice financial cherry, but looking back on it, was not the 'safe' choice by any stretch of the imagination. Do not overlook the importance of 'safe' or at least 'less complicated' while you are a resident.
 
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I checked. It's legal to raise the rent however much they want. He has no current cause for eviction but he can raise the rent however much he wants, then if you don't pay it, they can evict you. It's things like this that really turn me off renting. I am still going for the renting first option, though currently nothing is panning out.
 
I checked. It's legal to raise the rent however much they want. He has no current cause for eviction but he can raise the rent however much he wants, then if you don't pay it, they can evict you. It's things like this that really turn me off renting. I am still going for the renting first option, though currently nothing is panning out.

Did you have a 12 month lease? Or are you going month to month (really not advised unless you have to).

If your rent is really going up by that much then either a) your landlord simply wants you OUT or b) he or she thinks you are super desperate.

Just move. Rent from a larger company - you’ll probably pay marginally more but the prices are much more fair market value and won’t increase unpredictably like that.
 
Move into another rental. Three years us a very tight timeframe to even break even. Between insurance, PMI, interest rates, closing costs, costs related to selling (including costs that you will incur when you move to residency if it isn't sold), you are likely to experience a negative experience. However you did say your rent us above average for the area, so put your energy into finding a way to get a cheaper place.
 
Well if you want to buy a house that can be a very good investment in a long run, also if you wan to sell that house that can be easy especially if you go to investor sites like BrandonBuysDallas since they buy houses.
Thanks for creating an account just to spam your crappy house buying company. You can go now.
 
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Eh, some people might argue it's worth it even if you just break even since renting costs you out of pocket and you can save that money, at least. I don't know when you figure the stress if that's true or not.

I knew a doc that ended up with 2 mortgages (or was it one mortgage and then renting?) when they moved as an attending because it took a while to unload the other house.
 
Thanks for the replies and the link to the other thread.

It's partly financial reasons and tired of dealing with landlords. My partner would have the time, but you're right on that we don't have extra money for down payment. We also do some (small) home repairs. The place we're looking at is more expensive than other houses in the area but has new HVAC, new appliances, completely remodeled, etc. You're right in that I don't want to deal with unexpected repairs, but I was thinking paying slightly more for a place that has just remodeled would be worth not having to replace anything for a few years.

I was looking at the NY times buy vs rent that was suggested in the other thread, and because housing cost is around 90-120k around here, rent should be 750 or less to make renting more profitable. I hear you on seller's vs buyer's market and while I'm not keen on sitting on a house that doesn't sell for a few months, I'm okay taking a 10-20k loss on attending salary when selling the house to have more peace of mind (ex AC was promised for 2 months now by landlord, but hasn't been done yet, and the 15% rent increase I suspect is largely because he knows I'm a doctor and thinks doctor = $$$). There are other issues with the landlord (he's around the house almost every day, gets drunk and angry on occasion) that are causing me to lean more towards buying.

I'm just not sure if buying a house will give more peace of mind than renting.
drunk and angry landlord - I vote against staying there!
you will have to run your own numbers but if you buy you can also re-sell if you move after residency
 
So how is buying less out of pocket?

You don't get how if you buy a house at say $200K, spend I don't know, $30,000 over 3 years additionally, and sell for even say $200K, that you potentially are more ahead than if you had spent $1500 a month for 3 years on rent?

You don't have to make money to end up spending less money.
 
You don't get how if you buy a house at say $200K, spend I don't know, $30,000 over 3 years additionally, and sell for even say $200K, that you potentially are more ahead than if you had spent $1500 a month for 3 years on rent?

You don't have to make money to end up spending less money.

Fwiw, if that happens, you spend more buying. Thats 54k in rent vs 30k in improvements plus 6-800 a month towards interest (20-30k) plus money associated with purchasing and reselling (attornies, inspectors, realtors, ~5-15k). I chose to buy, but not bc i expected to necessarily spend less money. Was more about desire to have a yard and control with tolerable risks (you know what youre getting with rent, whereas house prices likely wont drop enough to bother me longterm, and if they did, i can carry the mortgage and rent it to someone else). In any case, If one can buy a house like op for 135k, then in my estimation, its a no brainer if rent is what he/she says it is. The expected valued starts to diminish once you get to 200k with similar rents, particularly if the decision is strictly financial, and not about control.
 
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You don't get how if you buy a house at say $200K, spend I don't know, $30,000 over 3 years additionally, and sell for even say $200K, that you potentially are more ahead than if you had spent $1500 a month for 3 years on rent?

You don't have to make money to end up spending less money.

If you buy, you have a down payment, you have the mortgage, the escrow, and all the maintenance, the appliances, the landscaping. . . .

Short term buying is more expensive than renting. It just is. People who don't believe that are using very primitive means of analyzing costs.

Long term, buying does many things that promote wealth building, but I firmly people should buy houses when they are ready to buy a house. Not when the market is ready, or their friend or family member thinks so. You need to have flexibility in your finances to absorb the costs of ownership, and planning ahead for the appreciation to cover the costs of owning the house.
 
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I’m in the minority but I also like to collect houses like they are baseball cards.

For me, it depends on the city and overall market/economy. I don’t like what I see now, so I am not buying anymore.

I bought a house with $11k down payment after my first year of residency.

By the end of residency, it was an unrealized +$80k (appreciation + equity paydown) vs. potential -$36k (rent).

So the correct decision (buying) - put us ahead by $100k by the end of residency.

That property, and the next home I bought in third year with $14k down, are both rented out.

I’ve since taken out a HELOC, to leverage some of that new equity, which is double my initial investment, and I still have double my initial investment left in there.

I’m now renting again because the place I live makes no sense with the home prices.
 
^all great until you get a bad tenant and have to deal with that headache while in residency and away from the area. Don’t confuse good luck with “correct decision”
 
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If you buy, you have a down payment, you have the mortgage, the escrow, and all the maintenance, the appliances, the landscaping. . . .

Short term buying is more expensive than renting. It just is. People who don't believe that are using very primitive means of analyzing costs.

Long term, buying does many things that promote wealth building, but I firmly people should buy houses when they are ready to buy a house. Not when the market is ready, or their friend or family member thinks so. You need to have flexibility in your finances to absorb the costs of ownership, and planning ahead for the appreciation to cover the costs of owning the house.
I will say that the defining line of"short term" vs "long term" varies depending on market conditions.

There exist markets with high rents and low prices and vice versa. 4 years might be a sufficient time to come out ahead via buying, or it may be 5 or 6 years. You have to make a number of assumptions regarding potential rates of return and use known market conditions to try to get a feel for that.

I typically recommend the NYT calculator to run the numbers, but there's a lot of alternatives out there as well. Is It Better to Rent or Buy?
 
I've read the multiple threads on here and on WCI on buying vs renting but I'm still on the fence. I don't want to add more debt to my student loans.

I'm currently finishing first year in my residency in a small city, and renting a house for $1000 per month, which is higher than the average cost. My landlord wants to raise the rent by 15%, but will probably negotiate down to 10%. He states that he's giving partner and I a good deal because he saw a similar house being priced for $1500 (that place is still not rented), and if we weren't such good tenants, that's how much he would increase the rent by. The average around here is $800-900.

We've been good tenants - fixed up the place here and there, landscaping, always pay on time, and partner even helped him fix up his own place. We did look at renting again, but we have a dog, which complicates things, and the rental market does not have as many options as buying. We can likely find a place for $900 a month, but it will take more time.

Houses in this area are about $135k. There is currently one we are considering that was completely renovated so I am hoping it will require little upkeep. The housing market in this area favors buyers. We will mostly likely will stay here for the next 3 years. I definitely don't want to be spending more money per month on housing costs. Also, not sure how much of a hassle it is to buy a house with mortgage paperwork and the like. I am okay with potentially losing money when I sell the house if I am on an attending's salary.

Have those of you that have bought your own place felt it's been worth it? What things should I be considering when looking at houses in the area?

I would buy if you can get a reasonable interest rate fixed rate 30-year loan.

You've made it this far, so you're willing to work hard. Working real estate and your investment portfolio is just another way of working hard to create wealth.

My $0.02.
 
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My cousin rented out while doing his residency. I am doing roommates at the moment. But I want to buy a house. Depends on the loans you have. I am lucky enough to have a strong financial support in the face of my parents and they would help me make an initial deposit at the bank if I need to but it's still something I consider a last resort. I am contemplating my options in the general scheme of things. I've been using an online free rent vs buy calculator that's fairly simple to use, to figure out what is the best course of action with my current finances. It's still something I need to figure out (I'm in Philly at the moment but I want to move to another state for my practice so I'm low key torn
 
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Ill write this from a landlord perspective. I am in residency now but my hours aren't bad so I purchased properties and rent them(local market is cheap so it is profitable). What you need to consider first is your time and willingness to deal with owning a property. Next it is the cost/benefit. If you have no time to deal with repairs just rent, but rent from a solid landlord that keeps up their properties otherwise you will spend all your time fighting with them. Next if you have the time, is it worth buying vs renting? If you live in California or NYC, better to be a renter. If you live in the midwest, buy as your mortgage will be the same or less than rent and you can always rent out rooms to other residents and basically live for free(this is what I did). The last part is if you also sublease/rent to others, can you deal with the associated bull****? I had business background before medicine so it was an easy answer for me.
 
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