What percentage of current MD/PhD students bought a home near where they go to school? I was considering looking into the possibility since I will be spending the next 7-8 years there and I was just wondering what people who have bought a home think. Was it worth it? More hassle than good? Just general thoughts. Thanks!
MD/PhD students buying a home???
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scneuro said:
For some reason I think Andrew Doan, on of our moderators, had bought a house when he did residency (I lurk on all of the forums, what can I say). Maybe PM him if no one bites on here?
I am thinking of doing the same thing, acceptance and location dependent, of course, so I would be interested to hear what other think and say. Best of luck to you...
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I've asked about this on most of my interviews, and there is no real consensus. It really depends on the city you go to, and how much of a down payment you can scratch together. Some places the housing is just too expensive (nyc), or conversely, the housing market isn't likely to provide a good return on investment (cleveland). Most places buying means being significantly further away. That being said, every small city school I've been to (pitt, vandy, uva), there have been mulitple people who have bought and been happy about it. One word of warning is that most told me not to rent the 1st year to get a feel for the area before buying.
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Alot of students own here at Penn, but one thing is (almost) constant among those who do... PARENT MONEY! There are alot of good investments if your parents are willing to chip in. You have to consider that when you're deciding if you want to buy. I saw lots of students who owned places when I interviewed and so I thought it would be a good idea for myself. But, I didn't realize that many of the students were still getting money from their parents. At some places living far from the school might be an option depending how you feel about commuting, though you have to really investigate the parking situation beforehand. Med students are often the last to be considered for parking, even at suburban/rural schools.
The one exception I know of to the parent money rule is a girl who bought an old beater in pretty far West Philly. I really wanted to stay either close to the school or in Center City, and both of those options are too expensive for a stipend. As for Andrew Doan, he signed up for the military and that supplements his residency salary. Figure you won't be making much more as a resident, so if you buy then the prospects aren't much better unless your spouse is bringing in good money. On the other hand, residents usually don't have a problem getting parking, so here at Penn most of them (like most of the faculty) drive in from the burbs where they can buy more affordably.
The one exception I know of to the parent money rule is a girl who bought an old beater in pretty far West Philly. I really wanted to stay either close to the school or in Center City, and both of those options are too expensive for a stipend. As for Andrew Doan, he signed up for the military and that supplements his residency salary. Figure you won't be making much more as a resident, so if you buy then the prospects aren't much better unless your spouse is bringing in good money. On the other hand, residents usually don't have a problem getting parking, so here at Penn most of them (like most of the faculty) drive in from the burbs where they can buy more affordably.
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at washU homeowning appeared to be the norm since it was so cheap, elsewhere i never heard of anyone owning.
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I'm a 4th year student and just bought a new house last september. I currently live in a very good real estate market (TN) and actually got my house with a no money down THDA mortgage at 4.9%. Check your state's HDA loan information........these mortgages are low 30 year fixed rates for first time home buyers. The caveat here is that you pay a penalty (app. $3000) if you sell your house within a 9 year period. But with the intrest rate savings of near 1% per year that easily pays for itself in 2-3 years.
Home buying is way better than renting (for obvious reasons). I was sick of renting and wanted to buy a home before the interest rates went back up and before the prices of new homes went up.
Home buying is way better than renting (for obvious reasons). I was sick of renting and wanted to buy a home before the interest rates went back up and before the prices of new homes went up.
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Ecthgar said:
So are you buying houses houses, or condos?
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About half (maybe more) own their own homes at our program. I save about $100 over renting, and my roommate's rent pays for my mortgage.
My cash flow going into investments is ridiculous for our salary - >$5000 a year (a pittance yes, but compounds over time).
My cash flow going into investments is ridiculous for our salary - >$5000 a year (a pittance yes, but compounds over time).
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Neuronix said:
I was really enthusiastic about buying, but a small part of me was suspecting that parent contributions could be a big part of it. Do you think it's just to the down payment, or to monthly payments as well? If it's just the down payment, how big do you think that might be?
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mercaptovizadeh said:
It depends a number of factors. I know one girl who got a $150,000 fixer-upper in the semi-ghetto and got a $50,000 down payment from the parents to make it affordable and she's been working on it ever since. I know two people who just had their parents buy them $280,000 or $400,000 (with $300-$400/mo assessments!) condos and they pay their parents "rent". A friend of mine spent like $130,000 (+$500 assessment, assessments in Philly are killer!) on his 1BR condo (less desirable location) and his parents pitched in like $15,000 for downpayment. There's some others who spent in the ranges of $130-$150,000, again either for small places or really beat up places in the semi-ghetto.
The thing is, I pay $925/mo including most utils for a fairly spacious 1BR + study in the middle of the city. The equivalent condo would probably go for at least $200,000, but probably more than that (for a mortgage of more like what... $1500/mo?). In Philly at least the cost of owning is going through the roof (making owning a good investment... for now), while rents are going up more slowly. The real estate companies know this, and they're busy converting all kinds of old apartments and buildings to condos and making a killing. One of the affordable, old buildings (The Ambassador) converted from $800 studios to selling them for like $180,000 plus monthly assessments.
To me, that's a huge incentive NOT to buy in this market. You'll get alot more for your money with an apartment, though you won't make any money on it. If you buy a condo or house, after you put all the money into fixing it up and paying your assessment/taxes/utils, are you really making enough money to make all the time you're going to put into it worth it?
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Speaking from limited expertise (personal finance course senior year of college), the rule of thumb we were taught was you should have at LEAST 10% availble in liquid assets for the down payment. Factor in closing costs, and you're probably need more like 12-15%, depending on whether you take any points on the mortgage. This is not the best time because the housing market is overpriced in a lot of areas (D.C., Boston, etc), and interest rates are higher than they've been in a while, and the fed is probably taking it up another quarter of a point. Just some things to think about, and I don't know what the take home message is except buying a house is really expensive.
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I bought a condo the summer after my M1 year. My folks paid the downpayment (10k) and I will pay them back when I sell it. I pay the mortgage. I am very glad I did it, as I will have a nice little "nest-egg" for when I go to residency that will be a down-payment.
Of course, I currently have the guy who lives above me's toilet waste leaking through my bathroom ceiling, so there are some disadvantages to a condo.
(literally)
Of course, I currently have the guy who lives above me's toilet waste leaking through my bathroom ceiling, so there are some disadvantages to a condo.
(literally)
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I bought a condo after M1. It was a great place for me and my wife to live while I was in med school; just the perfect size, great location, etc. (It got much smaller when the first kidlet came, and much too small when the second started walking.) I just graduated in 2005, sold it for a ridiculous profit, and turned that into a down payment on a new house for residency. Buying worked out very, very well for me.
The math of mortgages and closing costs is usually such that you can come out ahead if you stay in a place for about six years or so, which is about the right length for an MD/PhD (who lives in an apartment or something in year one). This, of course, assumes that you can scratch the down payment together.
On the other hand, the recent housing bubble has made it such that the rental market is soft relative to the housing market, and so in some places, it might make more sense to rent than buy.
On the third hand, where you live isn't just an investment, it's also... you know, where you live. If it's important to you to own, you find a place you really like, and you have the resources to swing it, you should probably do it. If you're missing one of those ingredients, you probably shouldn't.
The math of mortgages and closing costs is usually such that you can come out ahead if you stay in a place for about six years or so, which is about the right length for an MD/PhD (who lives in an apartment or something in year one). This, of course, assumes that you can scratch the down payment together.
On the other hand, the recent housing bubble has made it such that the rental market is soft relative to the housing market, and so in some places, it might make more sense to rent than buy.
On the third hand, where you live isn't just an investment, it's also... you know, where you live. If it's important to you to own, you find a place you really like, and you have the resources to swing it, you should probably do it. If you're missing one of those ingredients, you probably shouldn't.
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for those who think buying in NYC is impossible, there are quite a few people in my program (including me) who decided to buy in manhattan. I say the percentage is around 10-20% per year/class. certain neighborhoods are more affordable than others. my parents are not wealthy at all, and all they've contributed was $15,000 to my down payment, and i'm paying about $900 for mortagage + maintainance a month.
Some people in my program have very deep pockets and they have $500,000-$1.0 mil co-ops in better neigborhoods with parental assistance. The moral of the story, however, is that even if you live in SF, NY, or Southern California you might still be able to buy a nice apartment if you've done some research.
Some people in my program have very deep pockets and they have $500,000-$1.0 mil co-ops in better neigborhoods with parental assistance. The moral of the story, however, is that even if you live in SF, NY, or Southern California you might still be able to buy a nice apartment if you've done some research.
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sluox said:
Well, as my parents can contribute only, say, $0, I won't be getting one of those anytime soon.
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mercaptovizadeh said:Well, as my parents can contribute only, say, $0, I won't be getting one of those anytime soon.
one of my friends worked at NIH for a couple of years and saved up $20,000. he's now buying an apartment. you don't necessarily need your parents to contribute.
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There are a few students at my program (Cincinnati) who've bought homes. Housing is cheap here. Some are withing 5 minutes from the school, others are 20 minutes away. Most either had help from their parents for the downpayment, or are married to someone with a real job.
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scneuro said:
I bought a house while funded on a training grant - so similar in the stipend structure to an MSTP. The problem that I had wasn't the down payment - I've found that with even marginal credit you can buy a zero down house - the problem for me was the documentation of income - since there's no W2 or anything, some lenders have a hard time accepting the training money as income - there are lenders who will do it, you may just have to dig around
Good luck and buy if at all possible, the training is long enough where it will pay off
