Should I buy or rent? Okay, so me and my fiancee are ready to buy a place/rent a place. We have

Question

Okay, so me and my fiancee are ready to buy a place/rent a place. We have about 30000 to put down if we want to buy. I make around 40,000 a year and he just started a job that he's making roughly about 500 weekly in cash right now, but it will be bumping up. He also gets extra money when he does well. This isn't a perm job he's just doing it for the money right now. So, I have a couple places in mind, but I don't know what to do. Should we rent an apt for 1185 a month, or should we put our money down and A) buy a place that we would stay for over 5 years (planning to have a baby in a year and a half) or should we buy a 1bedrm condo for cheap and live for a 2.5 years or so there? Not sure to rent/buy a more expensive place or buy a cheaper place.... any suggestions?

Answer 1

Only rent if you're not planning on living in the city where you are now for very long.

If you are planning on staying there for awhile (like you said, 5 years) then I think you should invest in a place that you will be in for a long period of time to make your money work for you. Also, only living in a place for 2.5 years and then trying to find another one will be very difficult if you're planning on having a baby in a year and a half.

I would recommend not renting and investing in a place that you will live in for a long period of time. It's a great time to buy right now, too.

Answer 2

If you can afford it, its always better to buy because you are investing your money. If you rent, you are simply throwing your money away and not getting any 'return' on it. I would go for the larger house because as i said, you are investing your money and when you decide to sell it, you will hopefully see a bigger return, thats only ofcourse if this damned recession  goes by then but i am sure it will

Answer 3

I would suggest finding a home that you love and buy it.  Why would you want to give someone your money when you can make an investment that will be yours forever?  You can get your taxes es crowed in your mortgage payment.  

I bought a house and pay $600 per month, the same size house in the area I live in I would pay $1000 per month if I rented it.  I am saving $400 per month and I can paint and remodel as I please and don't have to answer to someone who is not my parent or spouse.

Good Luck!

Answer 4

In general, it's advisable to buy rather than rent.  As a rule of thumb, you should qualify for a mortgage 2.5 times your yearly income.  If you make about $65K combined, you should qualify for a mortgage of about $160,000, plus your downpayment.  That may not buy you much, depending on where you live, or it may get you a really nice place.

Besides the appreciation of the property if you purchase, you also will get tax benefits from the mortgage.  And, if you have a baby in a year or two and are renting, there will be a lot of temptation to spend some of that downpayment money.

Answer 5

Well basically the difference between renting and buying is with renting you are throwing your money away every month.  There is no tax write off and the place really doesn't belong to you.  The good side about renting is you can get out of it much more easier than if you buy a home.  So if you are looking for a temporary place to stay, I'd say rent.  But it sounds like you are looking for a permanent place.  If you plan to stay 5+ years I definitely wouldn't rent.  Get an affordable home that preferably has some equity in it.  Don't go out and try and get your dream home yet.  The housing crisis has made it a great time for buyers due to the fact you can get a really nice home for almost half of what it would have cost you last year.  Since it sounds like your income is the stable one, I'd base your mortage on your income only.  In other words if he loses his job or changes his job, you can afford to carry the mortgage.  The biggest mistake young couples make is getting into a house that requires both incomes to maintain.  A house is alot of responsibility and on top of that you are planning a baby soon so you want to prepare.    I also recommend not putting ALL 30k down on the house.  There are too many no-money or little money down programs.  Save some of that money.  It's not going to change your monthly payment by THAT much.    Whatever you do, don't get in over your head.  Home shopping is exciting but since his income is not very stable right now you don't want to jump in with both feet.  Gradually build up to what you really want.  In the meantime just get something comfortable and basic.  There are homes out there that can cost you 1185 a month instead of rent (depending upon what State you live in).