phoenix9999

My "home theater" consists of a couple of mid-80s Fisher speakers connected to a dead receiver, and I'd love to upgrade it with one of those DLP HDTVs and a real sound systme. My daily driver winter S2000 has stock tires, and it'd be great to either buy summer tires or, better yet, lease a second car. Oh, and I really want to go on a trip to Germany this spring.

But, while I can easily afford these things, I have a feeling that I should buy a house (which is less easily affordable) before doing anything else.

I don't see any reason why I couldn't be in a position to put down a down payment on a decent (~$250k) home or condo by the summertime.

What is the rule for staying in a home that one has bought? I've never lived in the same state for more than five years of my life, and never slept in the same bedroom for more than a year. I've always moved around. It's been five years here. I have a stable job, things are OK. But, will a home be a loss if I choose to bolt after two years?

Any advice from those who've been there on how a single 20-something workaholic should approach home ownership? Can renting be rationalized effectively?

OhioRacer

I'll let the accountants weigh in on this but I seem to recall either 5 or 7 years to recoup mortgage closing costs on the purchase and realtors fees upon the sale of your property. Sounds like condo is the way to go for you if you do decide to buy. Otherwise, every time you move you'll be hauling the "home" things...lawnmower, snowblower, etc. Plus you're working alot so having someone else do the maintenance to your property is the way to go IMHO.

MsPerky

I'd say buy the house, but only if you are prepared to keep it for five years. That is an old rule, I realize, and property values have really increased in some areas in a year or two. But you can't count on that and you need to keep it for awhile to offset closing costs. If and when you do buy, remember the three requirements for a smart purchase - location, location, location!

paivag

With home ownership I don't understand how you could lose? Maybe you can get someone to scope out a place for you? Like a real estate broker who would work for you to get a good deal on a house that you know you will off load in 12+ months at a profit. As for mortgages, the adjustable arm financial products being offered these days are oh so tempting.

Legal Bill

Get a no points/no closing cost loan.

Renting is a looser in the long run, but not so bad short term.

That said, if you are more than 50% sure to leave in two years for another state or area, just keep renting.

ralper

You are asking a lot of very good questions, and they are almost impossible to answer without knowing more about you, your plans, your expectations, your goals, your finances, and the area you live in.

This is the kind of thing that may be exactly right for one person, and exactly wrong for another. It really all depends on you.

Under many circumstances home ownership makes a great deal of sense, there are many advantages. But again, that depends on you.

Without knowing more, that is the best answer I can give.

dlq04

You won't find a better time to buy with the prime rate at 4% and lots of lending places offering great deals. The odds are great that things can only go up in that respect.

A house is an asset that is not always easy to liquidate quickly. Sometimes it's two or three days and sometimes it's two or three years. How much profit or loss can impact that, but there are other factors too. I recall selling my first house for twice what I paid for it just a few years prior but when it came to sell the second one when I got a transfer I lost money even after being there over five years. The reason was the specific market in that location was flooded due major plant cutbacks at the time and everyone was bailing out and hundreds of brand new homes listed at a loss. Odds are in your favor that you'd break even or make money but it's not a certainty.

If you do buy, follow MsPerky's advice.... location, location, location - the 3 most important rules or the other advice and go Condo. If you think you'll be renting for the next few years in the same place, I'd do something.

paS2K

.....about once per year I'm on the same wavelength with LegalGuy

In the ~25 years that we've owned our own home, I figure that the net gain has averaged about 10% per year, plus tax deductions for mortgage interest, plus tax deferral of the gain, plus pride of ownership. As long as you'll likely stay put for at least 3-4-5 years, it's probably a no-brainer.

ralper

A word of caution. The price of houses, like the stock market, doesn't always go up. In general, housing prices do tend to rise but at any given time, they may be lower. Ask anyone who tried to sell in 1987 to 1992. That is a problem if you don't have the time to ride a dip in prices out.

If you are settled, and think you will stay put, and can hold out for higher prices if need be, very few investments are as good as a house. If this is not the case stay, renting is a good alternative. True interest rates are low, but prices are high.

As has been previously mentioned, three things determine the value of a property; location, location and location.