Did you buy a house/condo during residency?

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Did you buy a house during residency?

  • I didn't buy... I Rent instead

    Votes: 7 41.2%
  • My condo/house cost < 50k

    Votes: 2 11.8%
  • My condo/house cost 50 - 100k

    Votes: 0 0.0%
  • My condo/house cost 100-150k

    Votes: 2 11.8%
  • My condo/house cost 150-200k

    Votes: 1 5.9%
  • My condo/house cost > 200k

    Votes: 5 29.4%

  • Total voters
    17

waterski232002

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Hey... I'm thinking about buying a condo/loft to live in during residency. I was curious how many of you purchased a place, and how expensive the places were.

Renting is always an option, but I figured buying may be a good investment. The only problem is that it's expensive to buy in Chicago..... minimum 150k + 30k for parking.

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waterski232002 said:
Renting is always an option, but I figured buying may be a good investment. The only problem is that it's expensive to buy in Chicago..... minimum 150k + 30k for parking.
I agree. When you rent, you're basically pissing your money away. I regret not buying a place during my last 7 years in Ann Arbor. I've pissed away over $50000 in rent here.

I plan to buy a place in Boston though...well let's clarify...my parents plan to put down the downpayment :laugh:
 
A few caveats when buying versus renting:

1) The first several years of mortgage payments are mostly interest so you are building equity very slowly. If your mortgage payment if $1000 per month, more than $800 is just interest for the first 4 years or so. And don't forget the other costs that do not lead to equity building: taxes, association fees, upkeep, remodeling, closing costs when buying, closing costs when selling, etc.

2) The tax benefits of home-owning are attractive but with the meager resident's salary the benefit is kind of small (since you are in such a low tax bracket). If you are married and your spouse works then there is likely a nice tax benefit between the two of you since your income will be higher.

3) There is some speculation that the housing bubble may burst soon and prices may stabilize or go down; and even if housing prices do increase, they may increase at a lower rate then you can get in a good mutual fund meaning. Therefore, any down payment might be better invested elsewhere. Keep in mind the opportunity cost of money that is locked into your home and not liquid.

4) When you own your own place it means you have to take care of it. In a house this can be very time consuming (especially in the northern climates where you'll have snow to shovel, leaves to rake, lawns to mow, etc.) and expensive. Condos and townhomes are nice since someone will do that all for you but it comes at a price.

Do the math carefully if your looking for an investment, because although real estate is often a beneficial investment, it is not guaranteed. If you are just looking for the lifestyle and "I'm a home-owner" factor, then the financial aspects can be pushed aside. But you can't automatically assume that renting is always better than buying.
 
I bought in med school (MD/PhD, so I was here a while) and will probably buy in residency because I'm going somewhere with a low COL. However, there are advantages to renting. For those who have never owned a home (condo, house, whatever), it is always more expensive than you think. YOU are responsible for all repairs and upkeep. If the A/C breaks, replacing it is VERY expensive (thousands of dollars). Also, housing prices are never guaranteed to go up. They often go down. Yes, as a general rule, real estate appreciates. But we're talking about an INDIVIDUAL place. It's like comparing the stock market to ONE little company. And, as a homeowner now, there are no tax breaks for me because I don't pay enough in costs to beat the standard deduction (even when I was single).

Also, a caveat with condos. They do NOT tend to increase like houses because of the undercutting. If you ask $100K, someone else with the EXACT same condo can ask $95K and he would sell and you wouldn't. I have a contract on my condo right now (wish me luck on the inspection tonight). There were three on the market. I asked $4000 less than the others, and I had a contract within 48hrs. The other two have been on the market over a month with no hits. Remember, if you buy, eventually, you must sell...
 
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