vania-janet/multiturn-rag-retrieval-data huggingface dataset:
4) Beef up my emergency fund, make sure my 401(k) or IRA was fully funded, put the rest into investments. See many past answers. A house you are living in is not an investment. It is a purchase, just as rental is a purchase. Buying a house to rent out is starting a business. If you want to spend the ongoing time and effort and cash running a business, and if you can buy at the right time in the right place for the righr price, this can be a reasonable investment. If you aren't willing to suffer the pains of being a landlord, it's less attractive; you can hire someone to manage it for you but that cuts the income significantly. Starting a business: Remember that many, perhaps most, small businesses fail. If you really want to run a business it can be a good investment, again assuming you can buy at the right time/price/place and are willing and able to invest the time and effort and money to support the business.  Nothing produces quick return with low risk.
In most cases my preference would be to buy. However, if you intend to sell after just one year I would maybe lean towards renting. You haven't included buying and selling cost into your equation nor any property taxes, and as John Bensin suggests, maintenance costs. If you were looking to hold the property for at least 5 years, 10 years or more, then if the numbers stood up, I would defiantly go with the buy option. You can rent it out after you move out and if the rent is higher than your total expenses in holding the property, you could rely on some extra passive income.
Yes, one is certainly better than the other. Which one depends on your priorities and the interest and tax rates on your student loan, your savings, and your (future) mortgage plus how much you can afford to save and still enjoy the lifestyle you want as well as how soon you want to move out. Basically, you havn't given enough information.
"The rent vs. buy ""debate"" or strategy has been a really interesting (and surprising) one to me. I can see both sides.  For instance, where I live one of the points on the local politician's platform is that he keeps property taxes low.    There are also significant tax deductions in the current tax code that favor the ""early stages"" of a primary residence home loan amortization, where the payments are mostly interest.    So such a place might be a more ""effective"" place to live, to retain the most income for some period of time early in the loan term.     Often places with cheap rent aren't places someone would want to live...you make important points about problems related to that. Places that someone (with enough income to make this strategy significant) *needs* to live aren't always going to be cheap to rent or cheap to own.   For some people in their ""prime earning (&amp; investing)"" years, this is a significant calculation to consider."
Taking on a mortgage is a commitment that you need to take on yourself; no one else will be liable for the payments. As for whether a townhouse or a detached house helps you meet your needs better, don't get caught up in terminology. There are few differences between houses & townhomes that are universal. Stereotypically townhomes are cheaper, smaller, noisier, and have condo associations with monthly fees to pay for maintenance on joint property. But that is something that differs on a case-by-case basis. Don't get tricked into buying a 1,100 sq ft house with a restrictive HOA, instead of a 1,400 sq ft free-hold townhouse, just because townhouses have a certain reputation. The only true difference between a house and a townhouse is that 1 or both of your walls are shared with a neighbor. Everything else is flexible.
I would not recommend you proceed for the reasons given by others and would recommend focussing on raising your annual income to a point where you are better able to decide whether buying is an option.  Given the price of places where you are living and your situation it likely will be some time until buying a place makes sense financially if ever (at those prices I would expect renting makes better sense).
I assume having real estate in a good popular city is much more secure way of keeping money than having it in a bank account Not at all!  Many things can go wrong with rental property. Renters can be late on rent, they can cause damage to property, you can have unexpected repairs. I'm not saying that you should just let it sit, but rental property is not risk-free my any means. Are you prepared to be a landlord as a part time job (for 500/mo?).  Rental property is not passive income - it takes work to maintain.  You can outsource this to a property manager, but that eats into the 500/mo that you are estimating). I want to stay flexible and have a possibility to change my location whenever I want. That's a perfectly reasonable reason not to buy a home, but what will you do with the rental when you move? It will still need maintenance, you'll still need to interact with renters, etc. I'm not saying you shouldn't do this, but I get the feeling that you are not fully aware of the risks involved in rental properties.
As mentioned in the comments, there are costs associated with owning & living in an apartment. First you have to pay maintenance charges on a monthly basis and perhaps also property tax. Find out the overall outgoings when you live in that apartment & add the EMI payments to the bank, it should not be way higher than your current rent. As an advantage you are getting an asset when you buy an apartment & rent is a complete loss, ast least financial terms. So, real estate is in general a good idea over paying rent. As for the loan part, personal loans are by far the most expensive of loans as they are in general unsecured loans (but do check with your bank). One way is to try and get a student loan, which should be cheaper. If you can borrow from family that is the best option, you could return the money with perhaps bank fixed deposit rates, it is better to pay family interest than bank. If none of the options are workable, then personal loan is something you need to look at with a clear goal to pay it off as soon as possible and try to take it in stages, as an when you require it and if possible avoid taking all the 15,000/- at once.
Real estate is a lousy investment because: Renting a home and buying a home, all else being equal, are pretty similar in costs in the long term (if you can force yourself to invest the would-be down payment). So, buy a home if you want to enjoy the benefits of home ownership. Buy a home if you need to hedge against rising housing prices (e.g. you're on a fixed income and couldn't cope if rent increased a bunch when the economy heated up). Maybe buy a home if you're in a high tax bracket to save yourself from being taxed on your imputed rent, if it works out that way (consult your financial advisor). But don't consider it a really great investment vehicle. Returns are average and the risk profile isn't that attractive.
"Welcome to Money.SE, and thank you for your service.  In general, buying a house is wise if (a) the overall cost of ownership is less than the ongoing cost to rent in the area, and (b) you plan to stay in that area for some time, usually 7+ years.  The VA loan is a unique opportunity and I'd recommend you make the most of it. In my area, I've seen bank owned properties that had an ""owner occupied"" restriction. 3 family homes that were beautiful, and when the numbers were scrubbed, the owner would see enough rent on two units to pay the mortgage, taxes, and still have money for maintenance. Each situation is unique, but some ""too good to be true"" deals are still out there."
Better in terms of what? less taxes paid? or more money to save for retirement? In terms of retirement, it would be better for you to keep the condo you currently have for at least two reasons: You wouldn't incur the penalties and fees from buying and selling a home. Selling and buying a home comes with a multitude of fees and expenses that aren't included in your estimation. You aren't saddled with a mortgage payment again. You aren't paying a mortgage payment right now. If you set aside the amount you would be paying towards that, it more than covers your taxes, with plenty left over to put towards retirement.
Having someone else paying you rent is always going to be the better deal financially. The question is, what does $450k buy in the neighborhood in which you want to live, vs $800k? I'm going to assume you can afford either option (buying a $450k home and not selling, or an $800k home and selling your current one) whether someone's paying you rent or not. Let's make up some numbers here; a $450k home, financed 80/20 (360k principal) at 4% for 30 years will cost you about $1720 in P&I payments per year (plus escrows such as RE taxes, PMI, and homeowners insurance where applicable). An $800k home financed 80/20 (640k principal) at 4% for 30yr will give you payments of about $3,055/mo before taxes and insurance. So, the worst case overall is that you buy a 450k home in the new neighborhood and are not, at any given time, collecting rent on the old property. That would (assuming the mortgage terms on both home loans were comparable) cost you $3440/mo and you'd be living in a $450k home in a neighborhood where 450k may not buy a home as nice as the one you moved out of. The question as I stated above is this; assuming you had a reliable tenant in your home for the entire remaining life of the loan on your current home, which is more acceptable to you: buying $450k of home (which might be a downgrade in sqft or amenities) and paying $2020 in P&I, or paying about a grand more ($3055/mo) for a much nicer home in the new location? Strictly from a money perspective, the renter is going to be the best option, IF you get reliable tenancy for the entire life of the mortgage on that house; you'll be paying $2020/mo for 30 years, which is $727,200, to end up with $950k of total home value (plus adjustments for actual home value appreciation/depreciation). That's the only way you'll come out ahead on any mortgage; have someone else pay most of it for you.
"The perceived risk depends on the entire situation, but often it is considered more risk, especially if you want to occupy yourself. Things you need to consider: It can be very difficult to show a property with tenants occupying it. There are many reasons for this and most homes show / sell better empty. I have found many tenants make it difficult on the seller. Leaving their areas a mess, being unaccommodating and especially in markets that are flooded with options, a lot of buyers just won't bother with the difficulty of scheduling a showing in occupied properties. I've tried to purchase many properties where the renter insists on being there during a showing, but won't open the door and there's no recourse for the landlord because his lease or laws in the area don't allow you to enter without permission. Also, it can be difficult to look past a lot of clutter and other people's decorating and aroma ""preferences"" to be kind. :) Is the property currently under lease and what is the period of that lease? It could be that the lease is month to month, or it could be years remaining on the lease period. It is likely a legal requirement in most areas that you honor the existing lease. I would never buy a property that has multiple years remaining. While some amateur landlords will allow 2 or even 5 year leases, this is a very bad idea for many reasons! What are laws like in your area for evicting tenants? You should know this regardless of whether or not you intend to occupy or keep it a rental. It can be a very difficult process evicting tenants and this process is vastly different from country to country and state to state here in the USA. Look into the security deposit - assuming there is one. How much is the deposit? Will it cover damage that may not exist yet? Don't think that just because you plan on evicting them soon, it isn't important. People can trash a place on the way out and an expensive lawsuit could be your only recourse. It is far easier to take a deposit than sue. I would absolutely demand that the deposit transfer to you upon sale. View the current renters with a fresh eye.
Renting is generally a good idea for people who (1) have not determined if they'll be in an area for more than 5-10 years, (2) want the flexibility to move if their living costs rises (which may be an issue if they lose wages), (3) don't want to pay property taxes (varies by state), homeowner's insurance, or maintenance costs, (4) enjoy regular negotiation (something which renters can do before re-signing a lease or looking for a new place to live). Again, other conditions can apply to people who favor renting, such as someone might enjoy living in one room out of a house rather than a full apartment or a person who likes a ""change of scenes"" and moves from one apartment to another for a fresh perspective, but these are smaller exceptions. But with renting, you have nothing to re-sell and no financial asset so far as a property is concerned (thus why some real estate agents refer to it as ""throwing away money"" which isn't necessarily true, but one should be aware that the money they invest in renting doesn't go into an asset that can be re-sold)."
"No magic answers here. Housing is a market, and the conditions in each local market vary. I think impact on cash flow is the best way to evaluate housing prices. In general, I consider a ""cheap"" home to cost 20% or less of your income, ""affordable"" between 20-30% and ""not affordable"" over 30%. When you start comparing rent vs. buy, there are other factors that you need to think about: Renting is an easy transaction. You're comparing prices in  a market that is usually pretty stable, and your risk and liability is low. The ""cost"" of the low risk is that you have virtually no prospects of recouping any value out of the cash that you are laying out for your home. Buying is more complex. You're buying a house, building equity and probably making money due to appreciation. You need to be vigilant about expenses and circumstances that affect the value of your home as an investment. If you live in a high-tax state like New York, an extra $1,200 in property taxes saps over $16,000 of buying (borrowing) power from a future purchaser of your home. If your HOA or condo association is run by a pack of idiots, you're going to end up paying through the nose for their mistakes. Another consideration is your tastes. If you tend to live above your means, you're not going to be able to afford necessary maintenance on the house that you paid too much for."
I don't know any clever way to do what you're describing.  And, in a sense, you can see why there might not be one.  A mortgage isn't just a magical way to reduce your housing expenses; it's a tradeoff in which you agree to a long-term commitment in exchange for fixed costs (or at least costs with a prearranged structure) over that long term.  If you're unwilling to accept the obligation of paying for and maintaining the property over a long period, you can't really expect to reap the benefits of lowered costs.  Part of the reason people say buying is better is because people often do live in the same place for a long time, in which case, if they rent, they might miss out on savings they could have had if they bought instead.  If you're not going to live in the same place for a long time, buying may not actually be better for you.
The first problem is your math. Unless you are paying cash you will have a mortgage. So you'll need to add interest expense. And you will have property taxes whether you pay cash or not.   Cutting corners and delaying repairs helps with margins. So does raising the rent as often as you can.   For most Americans real estate is a store of wealth, not a generator of it.
"Personally I would advise only buying what you can afford without borrowing money, even if it means living in a tent. Financially, that is the best move. If you are determined to borrow money to buy a house, the person with income should buy it as sole owner. Split ownership will create a nightmare if any problems develop in the relationship. Split ownership has the advantage that it doubles the tax-free appreciation deduction from $250,000 to $500,000, but in your case my sense is that that is not a sufficient reason to risk dual ownership. Do not charge your ""partner"" rent. That is crazy."
Economically, you would say that purchased and rented real estate are not perfect substitutes--they are largely separate markets.  Only a few people are able to easily switch from one to the other and that choice is sticky--for example, once you buy a house, prices would have to rise a lot for it to be worth it to sell it and move into an apartment. In both markets there is a supply and demand curve, but the slope of the demand curve for houses to purchase is much steeper than the demand curve for rentals. The market for new housing fluctuates rapidly because it requires a large change in housing prices to change the number of people looking to buy a house.  Most decisions to buy a house are not driven by the state of the housing market.  This describes a supply/demand graph with a very steep demand curve.  Additionally, because of the leverage provided by mortgages, the demand for houses depends critically on relatively small changes in the interest rate and availability of loans.  Thus the steep demand curve shifts all over the place as borrowing conditions change. On the other hand, apartment prices are more stable because people easily move from one apartment to another and people living in their parent's basements easily move into apartments if prices change.  A small change in the price or quantity of rentals brings about reasonable response in quantity demanded.  This is the situation where the demand curve is shallow.  In addition, rentals are not tied to interest rates tightly, nor are they as strongly tied to economic conditions (in a recession, people avoid buying but renters continue to rent).
"You mention: High rent places are usually also high   property value places. Given the tax   incentives, it seems like a good long   term idea to grab a house, so if we   assume you have the option of working   and buying a house in a high CoL or a   low CoL city, I think you'd prefer the   high cost. Because essentially, after   30 years, you'd have a million dollar   house vs a quarter million dollar   house. You've captured three quarters   of a million dollars in rent, given my   napkin math hypothetical. I think you're forgetting about some of the associated costs with ""owning"" a home, including:"
Personally, I started renting out because I couldn't afford to buy a place but now I'm quite comfortably past that point.  My three main issues are: These views aren't for everyone but I find it hard to seriously contemplate dealing with 2 while 1 and 3 are issues.   To be honest, I found that I learned a lot sharing a place for the first few years and still enjoying it now.  I don't really think you should bring it down to a financial issue unless your decision is already made.
Based on what you've said I think buying a rental is risky for you. It looks like you heard that renting a house is profitable and Zillow supported that idea. Vague advice + a website designed for selling + large amounts of money = risky at the very least. That doesn't mean that rental property is super risky it just means that you haven't invested any time into learning the risks and how you can manage them. Once you learn that your risk reduces dramatically. In general though I feel that rental property has a good risk/reward ratio. If you're willing to put in the time and energy to learn the business then I'd encourage you to buy property. If you're not willing to do that then rentals will always be a crap shoot. One thing about investing in rental property is you have the ability to have more impact on your investment than you do dropping money in the stock market which is good and bad.
Option A - you sell the house and then use the money to pay off a portion of your second mortgage. The return on that investment is 5.5% a year, or $1925 net. Option B - you rent it out, that will bring  you $5220 (435 x 12), more than 2.5 times option A. That's not counting any money going towards the principal of the loan. Given that you'll be using a property management company, you can be fairly certain that there won't be any unexpected expenses (credit check, security deposit should take care of that) Option C - you invest the money somewhere else. You'll have to get 15% return in order to beat option B. I don't think that's sustainable.  You should talk to a CPA about the tax implications, but I'm fairly certain that you'll do better tax wise to rent it out, since you can use depreciation to lower your tax bill.  Finally, where do you think real estate prices will be in 4 years? If you think they'll increase that's another reason to hold onto the property and rent it.  Finally finally, if you plan to rent it out long term (over 4 years), it will be a good idea to refinance and lock the current interest rate.
I'd suggest taking all the money you have saved up and putting in a mutual fund and hold off on buying a rental property until you can buy it outright.  I know it seems like this will take forever, but it has a HUGE advantage: I know it seems like it will take forever to save up the money to buy a property for cash, but in the long run, its the best option by far.
Renting an apartment here in Atlanta (where I live) is just as expensive (if not more) than paying own a home so it seems like a good ideas to just go for owning my own property. And I really want space for my dog. :-)
"A house is a funny kind of investment. Normally when you invest, you do it to make money. The return on a house, though, isn't principally real money, it's the imputed rent - money that you would have needed to pay to rent the house. The thing about this imputed rent is that you consume it right away. Getting a bigger house and putting more money into it doesn't save you any money, it's just a way to consume more ""house"" - so, unlike regular investing, it's not really responsible and doesn't contribute to your financial well-being."
It is easier to get a loan on a rental than a flip, which is a huge advantage to rental properties. Leverage allows you to increase your returns and make more money off appreciation and higher rents. I use ARMs to finance my rental properties that are amortized over 30 years. I have to put 20 percent down, but my portfolio lender lets me get as many loans as I want. Because I put 20 percent down on my rental properties and they still have great cash flow I can buy three times as many properties as I could with cash purchases.  Buying more rental properties amplifies the other advantages like cash flow, equity pay down and the tax advantages.
"Remember that the rental market and the property market are markets.  For any given location and level of quality, if it were a clearly superior choice to buy over rent, then more people would buy, and less would rent, driving prices down for rentals.  The value of ""owning"" as opposed to paying rent and never owning is priced into that, at least at locations and levels of quality where owning is a possibility (and that is nearly always a possibility, even at very low levels of quality). This is true even disregarding your personal circumstances, unless you're looking in an area that has a lot of people like you (San Francisco, perhaps).  Given your personal circumstances, you have strong incentives to be on the renting side, unless there are major pressures on the housing market that cause property to be far cheaper than it should.  This was true in 2009-2011, but is mostly not true anymore (though some areas have yet to fully come out of the crash)."