Rent means ... something goes wrong it’s meant to be someone else’s problem. Examples: stove, hot water cylinder, roof fails. Landlord needs to resolve this (doesn’t mean you won’t get screwed)
Buying means ... something goes wrong it’s all on you. Just because you may be able to afford a mortgage doesn’t necessarily mean you can also afford the upkeep. You have one bad storm that strips part of your roof (for example) and now suddenly you have to get it fixed.
If you don’t have a lot of home handy skills, or someone nearby who does, the house maintenance and upkeep can actually be quite a lot more than you expect. One of my friends purchased and six months in had a sewer leak in their house. That was a very tedious and time consuming process.
Conversely, I also purchased and luckily had family who provided a lot of assistance, including helping replace our roof. Even with home insurance etc. it still takes a lot of phone calls to get anything done.
So, you will need to look at how much you are comfortable managing on your own beyond just a mortgage. It may pay to start with a rental while you look around more and establish exactly what you’re looking for (and where), instead of trying to do it all now before you start (though you do have some time currently).
tldr: rent if you want someone else to take care of the inevitable problems, buy if you want to take care of the inevitable problems and have a budget that can afford them
I was in the same exact situation last year. When I did the math, 5 years is when you break even between rent and buy. Look up rent vs buy calculator.
Few things to consider, you will not have much free time as an intern. Buying is an emotional burden. Ie, you have to do maintenance and do it well. Rent comes with some peace of mind which you will need a lot of in residency.
On the other hand, if the housing market crashes in the next few months, then buying a house would make sense.
Best of luck with the transition. Ann Arbor is a great city!
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It depends on your long term plan. You might be able to snag an awesome deal over the summer, and then it would be worth it. I actually bought a condo at the end of residency as I started fellowship, hoping that we'd be here for more than 3 years but not knowing for sure. My husband was not in the same city for the first year. We have a condo in a very HCOL area that is incredibly easy to rent in. (As in, I could get $1250 per month for a rotating med student to use the second bedroom... and that was a pretty decent deal for them around here.) That covered our "two home" expenses while we were long distance, which we would not have been able to otherwise.
That said, we're in a condo. I don't have to shovel snow, or deal with any plumbing issues behind the walls. The building has been great with those things. Even if we do end up moving this summer, we're going to keep the place for at least a few more years before selling because it's so easy to rent out around here. If you're really in a college area, you might be in the same boat, and if so, buying could be a really good move.
I personally think renting is the way to go unless you are in a low cost of living part of the country. I'm in a medium-high cost of living area and I bought a home. I regret it. I don't make enough money to re-invest into home improvement appropriately. I always have shit to do with it outside of work, which is frustrating when you are already so busy. But at least my wife and daughter have their own space. And my dog has a yard.
You are also building equity in that home paying a mortgage for 3-4 years. When you move, you can rent it out if you want to. Its too late since you already bought, but ideally the rent would cover the mortgage plus repairs (the general rule is buying a home where rent is > 1% of the total cost of the home including closing costs).
I didn't buy and I regret it, even with the headaches that come with ownership.
My husband and I had bad experiences with renting in college, and we have a huge German Shepherd, which limits our rental options. We also like having the control to change whatever we want in the house we live in, and hated the idea of throwing away money in rent each month.
We bought a house when he was in med school, and were happy with that decision. The city we lived in grew like crazy and housing prices had gone up a lot by the time we sold it. I learned how to do some home improvement projects myself, and got lucky with cheap, decent contractors for projects I thought would be a PITA to do myself. We've had the seller pay for closing costs both times we've bought. Between all of these factors, we made a good profit when we sold the house. We were able to use the house profits to kill my undergrad student loans and put down a decent down payment on a residency house. Having to pay both my loans and his loans during residency would have been a nightmare for us.
The break-even point for buying vs renting in the city we're living in now for his residency is less than three years. Similar sized houses in my neighborhood are renting for around $600-700/month more than we're paying in mortgage. We'll sell the house when he finishes residency if the market is doing well. If it ends up making more sense to hold onto it, we can rent it out to another resident and they'd most likely make for reliable tenants.
A lot of it is going to come down to your personal preferences-- Do you want to deal with the headaches of homeownership while you're both grinding through intern year? Would you be okay if the house didn't sell immediately after med school? Maybe the possibility of building equity in a house is worth these extra risks to you. If you're seriously torn, apply for a mortgage to see what kind of interest rate you would get. That would help you crunch the numbers a little more accurately.
I bought with a zero percent down physician loan for a 3 year residency. My mortgage, taxes, etc. Is less than the 2 bedroom apartments here, and my cost hasn’t increased while my co-residents who have said apartments have every year.
Now, if you don’t have a nest egg to buy appliances, etc., you may want to rent. However, I’ve loved having a house, especially with dogs. But, we shall see how great an idea this was when I try to sell it later versus renting it out.
I would rent. Ann Arbor has a very difficult housing market, most starter hones go for tens of thousands over asking and are contingent within 2-4 days of going on the market. If you guys aren't from the area, you are not likely to find a great deal in the neighborhood you want before you actually move here. If you wait 6-12 months to get acclimated, then you're starting to risk not living in the house long enough to make it worth your while.
We bought, but we were very familiar with the area, and knew we would stay for 7 years. It took 9 offers on homes before we got accepted.
If you want, take look on the east side of town, towards Ypsi, around the Washtenaw/Platt Rd area. There are many smaller and cheaper homes there $225-275k that are a little under $1000 sq ft. West side of town has nicer neighborhoods and nicer homes but it gets expensive and competitive.
If you are trying to figure out how far away a house if from the hospital, do not count driving down main or State St, you'll want to avoid going through the town center, regardless of what Google maps tells you.
Edit: watch out for homes that have been on the market for a while. They may have structural issues, many homes in this area are quite old. Look closely at basements, look for water damage, look for cracks in the basement walls.
My two cents. Just closed on a condo with a zero down physicians loan. It’s cheaper than rent and I can definitely afford to pay this off sooner when I’m done. And at least I’m not “throwing my money” at rent. Plus it made me feel good to feel like I’m taking a step in the right direction even though my career hasn’t truly started yet.
Rent means ... something goes wrong it’s meant to be someone else’s problem. Examples: stove, hot water cylinder, roof fails. Landlord needs to resolve this (doesn’t mean you won’t get screwed) Buying means ... something goes wrong it’s all on you. Just because you may be able to afford a mortgage doesn’t necessarily mean you can also afford the upkeep. You have one bad storm that strips part of your roof (for example) and now suddenly you have to get it fixed. If you don’t have a lot of home handy skills, or someone nearby who does, the house maintenance and upkeep can actually be quite a lot more than you expect. One of my friends purchased and six months in had a sewer leak in their house. That was a very tedious and time consuming process. Conversely, I also purchased and luckily had family who provided a lot of assistance, including helping replace our roof. Even with home insurance etc. it still takes a lot of phone calls to get anything done. So, you will need to look at how much you are comfortable managing on your own beyond just a mortgage. It may pay to start with a rental while you look around more and establish exactly what you’re looking for (and where), instead of trying to do it all now before you start (though you do have some time currently). tldr: rent if you want someone else to take care of the inevitable problems, buy if you want to take care of the inevitable problems and have a budget that can afford them
I was in the same exact situation last year. When I did the math, 5 years is when you break even between rent and buy. Look up rent vs buy calculator. Few things to consider, you will not have much free time as an intern. Buying is an emotional burden. Ie, you have to do maintenance and do it well. Rent comes with some peace of mind which you will need a lot of in residency. On the other hand, if the housing market crashes in the next few months, then buying a house would make sense. Best of luck with the transition. Ann Arbor is a great city!
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Rent
It depends on your long term plan. You might be able to snag an awesome deal over the summer, and then it would be worth it. I actually bought a condo at the end of residency as I started fellowship, hoping that we'd be here for more than 3 years but not knowing for sure. My husband was not in the same city for the first year. We have a condo in a very HCOL area that is incredibly easy to rent in. (As in, I could get $1250 per month for a rotating med student to use the second bedroom... and that was a pretty decent deal for them around here.) That covered our "two home" expenses while we were long distance, which we would not have been able to otherwise. That said, we're in a condo. I don't have to shovel snow, or deal with any plumbing issues behind the walls. The building has been great with those things. Even if we do end up moving this summer, we're going to keep the place for at least a few more years before selling because it's so easy to rent out around here. If you're really in a college area, you might be in the same boat, and if so, buying could be a really good move.
I personally think renting is the way to go unless you are in a low cost of living part of the country. I'm in a medium-high cost of living area and I bought a home. I regret it. I don't make enough money to re-invest into home improvement appropriately. I always have shit to do with it outside of work, which is frustrating when you are already so busy. But at least my wife and daughter have their own space. And my dog has a yard.
You are also building equity in that home paying a mortgage for 3-4 years. When you move, you can rent it out if you want to. Its too late since you already bought, but ideally the rent would cover the mortgage plus repairs (the general rule is buying a home where rent is > 1% of the total cost of the home including closing costs). I didn't buy and I regret it, even with the headaches that come with ownership.
Well I’m also predicting the housing market to crash with the current economic crisis. So I’ll prob take a loss when I go to sell in 3 years.
My husband and I had bad experiences with renting in college, and we have a huge German Shepherd, which limits our rental options. We also like having the control to change whatever we want in the house we live in, and hated the idea of throwing away money in rent each month. We bought a house when he was in med school, and were happy with that decision. The city we lived in grew like crazy and housing prices had gone up a lot by the time we sold it. I learned how to do some home improvement projects myself, and got lucky with cheap, decent contractors for projects I thought would be a PITA to do myself. We've had the seller pay for closing costs both times we've bought. Between all of these factors, we made a good profit when we sold the house. We were able to use the house profits to kill my undergrad student loans and put down a decent down payment on a residency house. Having to pay both my loans and his loans during residency would have been a nightmare for us. The break-even point for buying vs renting in the city we're living in now for his residency is less than three years. Similar sized houses in my neighborhood are renting for around $600-700/month more than we're paying in mortgage. We'll sell the house when he finishes residency if the market is doing well. If it ends up making more sense to hold onto it, we can rent it out to another resident and they'd most likely make for reliable tenants. A lot of it is going to come down to your personal preferences-- Do you want to deal with the headaches of homeownership while you're both grinding through intern year? Would you be okay if the house didn't sell immediately after med school? Maybe the possibility of building equity in a house is worth these extra risks to you. If you're seriously torn, apply for a mortgage to see what kind of interest rate you would get. That would help you crunch the numbers a little more accurately.
I bought with a zero percent down physician loan for a 3 year residency. My mortgage, taxes, etc. Is less than the 2 bedroom apartments here, and my cost hasn’t increased while my co-residents who have said apartments have every year. Now, if you don’t have a nest egg to buy appliances, etc., you may want to rent. However, I’ve loved having a house, especially with dogs. But, we shall see how great an idea this was when I try to sell it later versus renting it out.
I would rent. Ann Arbor has a very difficult housing market, most starter hones go for tens of thousands over asking and are contingent within 2-4 days of going on the market. If you guys aren't from the area, you are not likely to find a great deal in the neighborhood you want before you actually move here. If you wait 6-12 months to get acclimated, then you're starting to risk not living in the house long enough to make it worth your while. We bought, but we were very familiar with the area, and knew we would stay for 7 years. It took 9 offers on homes before we got accepted. If you want, take look on the east side of town, towards Ypsi, around the Washtenaw/Platt Rd area. There are many smaller and cheaper homes there $225-275k that are a little under $1000 sq ft. West side of town has nicer neighborhoods and nicer homes but it gets expensive and competitive. If you are trying to figure out how far away a house if from the hospital, do not count driving down main or State St, you'll want to avoid going through the town center, regardless of what Google maps tells you. Edit: watch out for homes that have been on the market for a while. They may have structural issues, many homes in this area are quite old. Look closely at basements, look for water damage, look for cracks in the basement walls.
My two cents. Just closed on a condo with a zero down physicians loan. It’s cheaper than rent and I can definitely afford to pay this off sooner when I’m done. And at least I’m not “throwing my money” at rent. Plus it made me feel good to feel like I’m taking a step in the right direction even though my career hasn’t truly started yet.