Mortgage/rent payment in Residency, especially intern year

[CDI]

According to that graph, we sold just in time! Maturing exuberance here right now.

Our next stop is just barely into the green.

Yeah, I moved to an area which is currently in the BLUE, big volume market acceleration. And we moved here 2 years ago, so going by this chart, it looks like we made a good call!

Will hang tight for another year or two and see what happens.

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[AdmiralChz]

Cutely justified, but you spent 2 years complaining about problems out of your control to the owner - and were at their mercy to fix them on their own timeline, because as a tenant you can't on your own.

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.

 

[Reveler]

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.

 

[jrlob91]

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.

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.

 

[radsgrad]

I'll make this quick. I just matched at a program in Pittsburgh and will make 52k/year. My calculations tell me I will bring up (after taxes) $1350 bi-weekly.

I will have a wife that will be UNABLE to work and we are assuming it will be for the entire first year +.

I have looked at a number of places and it appears the average rent or mortgage payment will eat up a bi-weekly payment, so 1350 dollars.

I am assuming my school loans will be around 300-350 dollars per month under the PAYE repayment plan, leaving me with about $1000 per month.

Has anyone else been in a similar situation as this scares the sh*& out of me to a certain extent.

Telling me to just fine a place that is 1100 will not help all to much as I have tried to find places that fit our needs for that much and have not.

Thanks in advance!

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.

 

[NITRAS]

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.

 

[dpmd]

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.

 

[Seb345]

Hey I am starting my residency this year and am planning to move. I'm planning to rent at first but I am hoping to buy a house in the future. I know this is kinda old but I didn't find anything newer

 

[deleted480308]

@Gastrapathy I decided to buy based on how long my residency is and my comparisons between renting and buying. If it was just me and I was looking for a place for myself, I wouldn't mind renting an apartment. But it is not the case and renting a house would be more. I found this house in a very hot real estate area, and I resale shouldn't be a huge deal in 5-7 years.

What’s the plan if the air breaks? Or some other big repair?

 

[gutonc]

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.

 

[Raryn]

Hey I am starting my residency this year and am planning to move. I'm planning to rent at first but I am hoping to buy a house in the future. I know this is kinda old but I didn't find anything newer

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?

 

[hallowmann]

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.

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?

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.