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    Should we buy a new house or rent?

    Asked May 9, 2008, 03:06 PM 2 Answers
    We are in a dilemna. We currently need to move from the house that we are in (long story; basically, we just temporarily swapped homes with someone; but that's another story).

    We have been looking with a realtor at houses on the market for sale. There are a LOT of houses, some are good deals, some aren't. My concern with buying a house is - what if we buy a house now (even at a great price), but the real estate market keeps getting worse and worse, and in a year or two, the house that we just bought is worth a lot less? On top of that, closing costs, etc. etc. add up. (even when the seller pays for closing costs, that usually means that he's not as flexible with lowering the price). And then just the usual costs of the upkeep of the house, etc. etc..
    On the plus side, it would be OUR house (well, us and the bank! LOL); we wouldn't have to move again (I have moved 4 times in 2 years; AGHH), etc..

    What about renting a house (with an option to buy).. It would save us the hassle of closing costs, etc. but the house is not really 'ours'... And we wouldn't be able to write off that wonderful (ha) mortgage insurance on taxes...
    We could buy the house after 1 year (with an option to buy). But usually, homes that are for rent with an option to buy want a non-refundable down payment for the 'right' to purchase the price after a year. What if we hate it? And what if the person that we are renting from goes into foreclosure without any warning to us? There goes our non refundable deposit and our home!

    Sigh... On top of that, I have 7 rental properties. 2 of the properties will be available to me in a month (but they are 2 of my best properties; great positive cash flow, and I should be able to rent easily when the time comes). On the upside, it would be my house already (no worries about getting a new mortgage, etc.). But one is a condo (a little small for us), and the other is a nice house, but it is a little far to go to work, and we will need to put about a few thousand dollars in it to paint and put new carpet in it). *The house already has a tenant in it, so I could leave her in there for a while and make a positive cash flow, AND not put new paint and carpet..

    So we are just spinning our wheels... Any sane suggestions? :) Thanks for your input.
    P.S. Please, as much as I enjoy everyone's opinions, I would appreciate input only from folks who are truly knowledgeable in the finance/real estate field. Thanks again! :)

    Last edited by Arivera112; May 9, 2008 at 04:39 PM.
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    2 Answers
    tickle's Avatar
    tickle Posts: 23,750, Reputation: 2664

    May 9, 2008, 03:50 PM
    From your post I get the impression you have a lot of assets and wondering with all of what you have, why are you asking about buying a new property with the market south of the border saying FORECLOSURE in all areas. Your economy picture is lousy and your interest rate is all over the place. You should know the rental and resale market as well as anyone.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 80,967, Reputation: 7668

    May 9, 2008, 04:26 PM

    The market is not going to stay down, OK it may go down some more for another year or two, but if you are buying a home for long term, 7 or more years, buy one, in two years it may not be as great, but over long term it will still be a great time to buy.

    If you are going to sell in two years, then no I would not get one

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