Would like advice. Option 1 or 2?

[goldsummer]

My parents will be selling their house and moving. I have 2 options:

Option 1 - Buy my family's home now with current interest rates. They'd sell to me for ~230k. (worth ~260k)
- House is Decent, but needs new floor, updates, few things need fixed, etc. Its livable and I can live in it for awhile before making any updates, no rush.
- Could refinance or rent or sell in the future.
- Monthly payment would be about the same as renting in my area (with 30 year loan)

Option 2 - Don't buy it and just rent.
- Rent would be about the same as the mortgage.
- No updates or hassle of upkeep.
- Easier to move


Which would you choose and why?
Thanks.

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[Neopolymath]

My parents will be selling their house and moving. I have 2 options:

Option 1 - Buy my family's home now with current interest rates. They'd sell to me for ~230k. (worth ~260k)
- House is Decent, but needs new floor, updates, few things need fixed, etc. Its livable and I can live in it for awhile before making any updates, no rush.
- Could refinance or rent or sell in the future.
- Monthly payment would be about the same as renting in my area (with 30 year loan)

Option 2 - Don't buy it and just rent.
- Rent would be about the same as the mortgage.
- No updates or hassle of upkeep.
- Easier to move


Which would you choose and why?
Thanks.

You didn't give any useful information like your income, where you are in training, if this location is important to you, if you already have a mortgage....

 

[thesauce]

You didn't give any useful information like your income, where you are in training, if this location is important to you, if you already have a mortgage....

Agreed. Can’t help much without this crucial info.

 

[goldsummer]

Agreed. Can’t help much without this crucial info.

You didn't give any useful information like your income, where you are in training, if this location is important to you, if you already have a mortgage....

Income: 200k
Im in year 2 as an attending
I would be a first time home buyer. No other mortgage or debt other than student loans.
I like the location. Will be here for at least the next few years, and may stay here long term.

 

[Neopolymath]

Income: 200k
Im in year 2 as an attending
I would be a first time home buyer. No other mortgage or debt other than student loans.
I like the location. Will be here for at least the next few years, and may stay here long term.

Should probably just rent and then buy a house you actively want. This sounds like a favor to your parents not something you would buy if you didn't know them?

 

[thesauce]

My parents will be selling their house and moving. I have 2 options:

Option 1 - Buy my family's home now with current interest rates. They'd sell to me for ~230k. (worth ~260k)
- House is Decent, but needs new floor, updates, few things need fixed, etc. Its livable and I can live in it for awhile before making any updates, no rush.
- Could refinance or rent or sell in the future.
- Monthly payment would be about the same as renting in my area (with 30 year loan)

Option 2 - Don't buy it and just rent.
- Rent would be about the same as the mortgage.
- No updates or hassle of upkeep.
- Easier to move


Which would you choose and why?
Thanks.

I would buy it, move in and renovate. Then buy the house you really want and rent this one.

 

[goldsummer]

Should probably just rent and then buy a house you actively want. This sounds like a favor to your parents not something you would buy if you didn't know them?

I would probably not get the house if it was not family, thats true.

However in getting the house I figure it gives me a few opportunities I otherwise would not have:
- no down payment or PMI due to "gift of equity", can hold onto more cash
- Can turn it into a rental, I don't think I'd be able to buy an investment property otherwise unless market crash

Cons of getting the house:
- will have to fix a few things
- loan burden with high interest, until I can refinance at least

Idk, man.

 

[Neopolymath]

I would probably not get the house if it was not family, thats true.

However in getting the house I figure it gives me a few opportunities I otherwise would not have:
- no down payment or PMI due to "gift of equity", can hold onto more cash
- Can turn it into a rental, I don't think I'd be able to buy an investment property otherwise unless market crash

Cons of getting the house:
- will have to fix a few things
- loan burden with high interest, until I can refinance at least

Idk, man.

Unfortunately this sounds like one of those "If you want a house then buy a house. If you want a rental property then buy a rental property" situations. If you are financially sound with your checklist (maxing retirement, insurance, student loan plan), then the money isn't the issue. The issue becomes whether you want to deal with renovations and renters. Are you someone who will actually walk the walk? Are you just caught up in everyone and their neighbor talking about it, especially currently? Only you can answer those questions. Don't become a landlord unless you actively want to do so and understand it. Don't buy a house that needs renovations that you aren't ultimately going to follow through on. Don't buy something just because it's a good deal.

Hopefully that makes sense. You can't go into any business situation based on the idea that it sounds like a good idea. It needs to be more concrete than that. There needs to be an actionable plan.

Good luck! Let us know how it all goes.

 

[thesauce]

The tipping point to me is that you’re getting 10+ % off the house. If you were getting house just at market rate, I would wait and buy what you want.