Poll--rent or buy (how risky in this economy??)

[sbgrace]

We've got some major family stuff going on and would like to move closer to extended family....need to move closer really at least within the next 1.5-2 years and sooner would better.

 

I can't show/list a home and live here at the same time because of a child's severe health issues. We own our home outright so no mortgage (bought 1997). But we use much of my husband's income due to high medical expenses.

 

How risky does it seem with today's economy to buy a home and then try to sell? We live in the Midwest and not an area where there are tons of empty homes/foreclosures. It's still a buyers market though. I can't get a straight answer on how homes are moving from any Realtor I've talked to and by the time we purchased, moved, did painting and etc. and put it on the market we'd be past peak selling season this year I would imagine.

 

If we were to rent we would have to do a home improvement loan or something--we'd likely be using some savings otherwise because rent prices here are more than mortgage payments it seems. I talked to a bank and we did qualify for a home improvement loan or line of credit so we could do that. Budget will be tight with the mortgage payments too but doable I think.

 

So...rent or buy before we sell? Or wait it out because the whole thing is about to blow up?!

Edited May 1, 2011 by sbgrace

[Twilight Woods]

If I didn't have a mortgage and had a child with severe health issues I would stay put. I like the security of not having to worry about making payments.

 

You could rent your house out as is....that would be extra income...possibly renting it out for what your new mortgage would be? BUT then you would have the worry of the tenant and having to fix things espically if you dont live close buy.

[Mergath]

I'd stay put if it was me. From everything I've read and everyone I've talked to, selling a house right now is darn near impossible in a lot of areas. Here, for example, I look through the real estate guides for fun and there are houses that have been listed for years, despite the price being slashed dramatically. Of course, every area is different.

[creekland]

The only thing you can't get back is time. If you feel you ought to be closer to extended family, I would do it before it could be "too late."

 

So, that said, if mortgage payments are cheaper than rent, I'd go that route and buy.

 

Then I'd consider what the selling vs renting market was where my original house was and very highly consider renting it to own. Tenants who plan to buy a place often take very good care of a property. Another option you have is selling financing. You could be getting a tidy income monthly at a good interest rate (better than savings accounts and many other options) by providing financing to a buyer.

 

Many investors do this, but we're not one of them, so I can't give you exact nuts and bolts as to how contracts are set up.

 

But all you asked is what I'd do... ;)

[Margo out of lurking]

Budget will be tight with the mortgage payments too but doable I think.

 

 

Because of these two words, I voted no.

 

I'd have to be 100% positive that I could handle both houses, including property taxes and maintaining both houses (for example, utilities and any unexpected repairs or other emergencies). A lot of houses for sale are sitting for a looooooong time, and even many that initially seem aggressively priced eventually sell for much less. And I live in an area that's not as tough as the rest of the country.

[gingersmom]

Absolutely not.

 

On these boards alone are tales of people who have rented one home, bought another and now the rental is in danger of foreclosure.

 

I would put your home for sale and hope for the best.

[Mama Geek]

How is the market in the two areas you are discussing. Our house in one area sold for a lot less than we had hoped, but we moved into a really nice house on a lake for a whole lot less money? Can you take what you would call a beating on your current home and still end up better off because housing is cheaper where you are wanting to move to?

 

Another option, you are discussing moving to help family, is it possible to move them closer to you?

 

We have our house paid for and it would have to be really extreme reasoning for me to take on a mortgage again.

[....]

Yeah, look at the market in those two areas. It is very scary to buy right now. We close in 2 weeks and as much as I like the house, you can't help but wonder what the future holds. :glare:

[4wildberrys]

If you can afford to move closer to family without having to wait out a sale---DO IT!! I suggested renting and then buying when your house sells simply because you actually own your home. You are in a great position to be able to move compared to people like us who are totally stuck unless we either walk away from this home or wait out the market. Like a pp said, you can't bring back time wasted waiting and waiting for a house to sell. And if you own it, you are also in a very unique position of being extremely flexible for sales price.

 

Depending on what area you are planning the move to, you might look at cost of rent vs. purchase because you just might find renting a better value. Then again, if the area you are looking at has absolute rock bottom prices right now---then I would look at purchasing only after your other home sells.

[Janie Grace]

There is no way I would own two houses in this economy. Home ownership brings with it unexpected expenses, even if the mortgage is not in play.

 

If I needed to move now, I'd rent something that is in my budget. Might not be as nice/big as what you could get if you bought, but I bet you could find something. I would also try to avoid getting a line of credit for rent. I'd try to find it in the budget somewhere first if at ALL possible.

[BlsdMama]

Put the house up for sale. When and IF it sells, turn around and buy another house in the location you want it.

 

If you were to rent out the current house just to pay rent at another house, it is very likely the house you own would depreciate - possibly a lot due to wear and tear. You don't need any of the headaches.

 

Medical expenses and worries are enough without ever adding financial ones.

[happypamama]

I definitely wouldn't buy if it made the budget tight, nor would I want to buy while renting out another place -- too iffy right now. I'd vote for staying put, since you have no mortgage, or moving and renting if you can sell your current place. If market conditions are really favorable for buying in your new location (and if job security is good), maybe rent for a while and then buy if your current place sells decently. I just wouldn't want to count on anything, and not having the obligation of a mortgage (or long-term lease) would be really nice; we love where we live and hope never to have to move, but we're also locked into a mortgage, so if DH's job situation completely deteriorates, we're in a hard spot -- in that case, it would be easier to have no mortgage or a lease, so that we could pack up and move easily. I would not be looking to buy right now, unless I was in a very secure position (in which case, a good deal would be nice).

[JennyD]

Can you get a list of recently closed sales of similar homes from a local realtor, just so you can get a sense of how long houses are taking to sell and what they're going for? A list of houses that are currently on the market and how many of them have gone into contract this year could also be useful. We recently bought a house and our realtor was able to generate both of these lists easily for us.

 

The market seems very variable, I have to say. We are moving to a city in the South and while some houses we saw have been just sitting and sitting, the houses that we were interested in were going into contract almost immediately after being listed. We missed out on seeing two different houses because we couldn't get down there fast enough; the one we ultimately bought had two offers on it within 24 hours of listing.