Mortgage/rent payment in Residency, especially intern year
Get help with your application
Use all the free resources available to you from SDN: articles, guides, expert advising, forums discussions, and school research.
Um, that’s a really weird response but all the repairs were prompt and most importantly not handled or paid for by me. These included garage repairs, sink, HOA complaints, and 2 lawn re-sods totaling at least 7-8K. None of this stuff bothered me too much, but it was a huge pain for the homeowner, especially the lawn (super hot climate, minimal tree cover and drought conditions).
I don’t regret renting at all - money and time were tight in residency. It was the best fit for me, in the area. Many that bought regretted it as the housing market tanked a number of years ago and still, today, hasn’t recovered. I also know some who enjoyed being homeowners. Again - no one size fits all with this discussion.
Just signed a 12-month lease on our new rental in a hot real estate market. We debated buying for residency, but with a growing family, a super-competitive real estate market and unfamiliarity with our new city, we opted to rent. We're not sure where we'll be after residency, so the freedom of picking up and leaving to pursue either fellowship or a first job without worrying about off-loading a house is very appealing. I'm lucky that my wife has a decently-paying job, but I know that money and free time will be tight during residency. I'd rather spend that free time with family rather than running back and forth to Home Depot doing home repairs.
Advertisement - Members don't see this ad
This^^
I did the same thing even though my wife doesn’t have a job because I am going into an extremely time intensive residency and want every bit of time I can with my wife and son. We actually went so far as to pay a little extra per month for a duplex across from the hospital to maximize our time together.
Sounds like you have been working this all out, but I just want to point out that you will only be paid for ~1/2 of 2018, which will put your taxable income at 26000 for the year of 2018. This is a very favorable income level if you have children. You can put this into a tax estimator and see you will likely get a refund in the range of 5K, more if they withhold federal tax for 2018. So in 9-10 months you should have a nice cash infusion to look forward to.
And then in subsequent years you will fall into the ~52,000 bracket and get little to no refund.
Renting vs buying is one thing, but putting yourself with a mortgage that is half your take home pay is a bad idea. I know it’s already done, but I would have shot for half of what did. You left no margin in your life. Bad idea.
Yeah, this. All this talk about renting versus buying is missing the point that housing taking up 50% of your income is no bueno. Probably wasn't the time to get a three bedroom with a large game room. But that is one of the things that people forget in the rent versus buy calculations. It is a lot easier to sign a year lease on a dinky place you don't necessarily love, but it is a lot harder to put an offer in on a place that doesn't wow you.
D
deleted480308
What’s the plan if the air breaks? Or some other big repair?
The good news is that, since that post was from almost 3 years ago, we can maybe find out how it went.
In *general* for the length of a residency (3-5 years), it's a poor move financially. Or at best, a gamble.
But individual circumstances can make it a worse or better move, particularly dependent on the market. I still recommend the NYT calculator - Is It Better to Rent or Buy?
Pittsburgh's market has been pretty solid for some time. Even during the housing bust in 2007, values stayed pretty stable. He will probably be fine from a resale perspective. Personally I think putting 50% of your take home into a mortgage is generally not a great plan, but I've seen worse. My mortgage is around 1/3 and that feels like a lot.
This was my experience. So far things are fine. My residency is on the longer side and I bought a newish, but not brand new home, have done some pretty cheap updates myself that I think have been positive over the last few years, have a home warranty plan for big expenses (covered an expense after a storm that paid for it for that year), and I don't think I'll have an issue at least recovering my money at the end of training.
It was the right decision for us, but I have a family and wanted to live in an area with good schools and minimal rentals. I didn't see it as an investment (and if that's the only reason you're doing it, you shouldn't), so breaking even or even a bit worse isn't a big deal.
This was my experience. So far things are fine. My residency is on the longer side and I bought a newish, but not brand new home, have done some pretty cheap updates myself that I think have been positive over the last few years, have a home warranty plan for big expenses (covered an expense after a storm that paid for it for that year), and I don't think I'll have an issue at least recovering my money at the end of training.
It was the right decision for us, but I have a family and wanted to live in an area with good schools and minimal rentals. I didn't see it as an investment (and if that's the only reason you're doing it, you shouldn't), so breaking even or even a bit worse isn't a big deal.
