Should I buy a house if I plan on moving in two years?

Just buy an rv to live in. You can even take it with you in 2 years.

Simply put - no.

This is coming from a finance guy who studied at a top-10 MBA program.

Best case scenario: you break even or eek out a slight profit (

Rent...........they say you have to own for about 5 years to break even under normal economic conditions.

Webedumbmaybe wrote:

Girlfriend and I are currently renting an apartment, but have started looking at buying a house. We do plan on moving in two years and everything we've read says don't buy a house if you plan on moving within 4-5 years. To us it doesn't make sense to be paying rent when we could be paying a comparable mortgage (accounting for utilities, taxes, etc.). We are both in stable jobs. And the house we are looking at would need astetic work (bones of the house are good, but kitchen could use a face lift).

What are we missing and are we being idiots for thinking about buying a house?

House is $160,000 and we have collectively $7000 to put down. House is in an area that has been gentrifying over the past 5 years.

1) You shouldn't buy a house unless you PLAN to be in it for 15 years minimum. Sometimes plans change, but home ownership is for people who plan to be there for a while.

2) You should NEVER buy a house with a girlfriend. One of you should buy it and then both live there while one pays some rent. You should not both be on the mortgage.

3) The two are just solid pieces of advice, but now, just logically, why in hell would you want to buy a house with the knowledge you will be moving in 2 more years? Do you love moving and paying for that? Do you love paying a commission fee to a realtor? Moving and selling a house is a pain in the ass. Why ensure that you will do that at least one more time? Wait for 2 years and then buy a house when it is that you plan to move.

Most people just don’t understand simple math. I hear complaints all of the time about throwing money away on rent. They wrongly assume that the same amount of money on a monthly mortgage payment is somehow paying down the mortgage not realizing that they don’t have a no interest loan.

People are dumb wrote:

Most people just don’t understand simple math. I hear complaints all of the time about throwing money away on rent. They wrongly assume that the same amount of money on a monthly mortgage payment is somehow paying down the mortgage not realizing that they don’t have a no interest loan.

Yes indeed, people don't understand what interest is and they can't do the math.

The total of house payments are a lot more than just the mortgage. And most of the mortgage payment goes into interest and it is not paying off your house in the first couple of years.

Eot wrote:

No

This is the correct answer. Everything else is just hand waving.

In a word, No. Between closing costs on the purchase and realtor fees on the sale, you’ll be out 8% of the purchase price (or ~$14K using your $160K price) just on transaction costs. On top of that, something like 80%+ of the payments you make in the first two years of your mortgage will go toward paying interest and not toward paying down your principal. If you monthly rent is anything close to what your monthly mortgage payment would be, you will almost certainly - absent pretty spectacular appreciation - come out ahead by renting.

Please allow me to do the math for you if you buy a house for 160k and sell it for 180k in 2 years (sounds like a great profit at first glance, doesn't it?)

Purchase price: $160,000

Sale price: $180,000

Length of Ownership: 27 months (24 months living in it + 3 months in escrow to sell it)

Carrying Costs: $34,560 ($1,280 month payment which includes 2% in property taxes + mortgage insurance for

ekw wrote:

Please allow me to do the math for you if you buy a house for 160k and sell it for 180k in 2 years (sounds like a great profit at first glance, doesn't it?)

Purchase price: $160,000

Sale price: $180,000

Length of Ownership: 27 months (24 months living in it + 3 months in escrow to sell it)

Carrying Costs: $34,560 ($1,280 month payment which includes 2% in property taxes + mortgage insurance for

Darn, 75% of my post just got cut off... I'm not going to re-write out all the math I just did but you will end up about 30,000 in the hole because only about $5000 of your payments will go towards principal. And that is if you can sell it for 20k more than you buy it for.

DON'T. BUY. THE. HOUSE.

That house is so cheap, you could easily buy it, live in it for 2 years, and then convert it into a rental property

Here in Boulder Co most homes are about a million.

Absolutely not. Housing is a terrible investment over the short term. A traditional broker will cost you 6% in transaction costs when you sell, so in your example $9600, which is more than your savings at this point. Couple that with the likelihood that the Fed is posed to do two rate increases in the coming year and you have a recipe for disaster. Last year mortgage rates were 3.8%, now they are at 4.6% and in a year people are predicting they will be between 5.3-5.8%. What that means is that housing prices should drop. All other things being equal, if mortgage rates go from 4.6 to 5.6 (if we take the mean, that 160k house would be worth 143k for the same payment). So, the potential downside when you go to sell it, your house would be worth $17k less than you paid for it and you would be looking at $8580 in transaction costs (based upon a $143k sale price) just to sell it. Unless you could find a renter, you would be upside down as the $25,580 in losses would be greater than the $7k down payment and the approximate $4k in principal payments you would make in the first two years, so you would end up owing about $15k. Not much of an investment if you ask me.

I bought a place and sold it within 2 years. That was not the plan, but that's what happened. If you factor in what I would have spent on rent, as well as tax breaks, I about broke even. I sold the house directly without a realtor, so there was no fee there, and there were no major repairs when I lived there. I consider myself lucky I didn't lose my shirt in the deal. I would never do it again if there was even a question I was moving in less than 5 years. Its all risk and no reward, coupled with the stress of owning a home. Not worth it. Renting sucks, but sometimes its the right decision.

Flagpole wrote:

2) You should NEVER buy a house with a girlfriend. One of you should buy it and then both live there while one pays some rent. You should not both be on the mortgage.

This is correct, but neither Flagpole nor the Jeff explained why. When you buy a house with a girlfriend, you are both obligated on the loan, for taxes, etc. If you break up, there is no system in place for resolving those liabilities, whereas if you are married, there is an entire body of law that exists for such a scenario. You then up potentially holding all the liability of the mortgage without the contribution of the girlfriend, and you'll be relying on her to execute any paperwork needed to sell the house. Good luck with that.

I think this is an awkward decision. If you know that in 2 years you will be moving why buy an apartment for such a short period? Although if you have a lot of money, it's up to you. My husband and I have been saving for a dream apartment for a long time. We live in Singapore and the apartments here are quite expensive. One day I accidentally saw penrose review on the Internet and fell in love with this place. Great location, large and cozy apartment, everything you need( schools, expressways, malls, supermarkets)are close to the building. And the most important thing is that the price is lower than average, so we just a week later already put the first payment. https://www.thepenrosecondo.com.sg

Selling the house when you are moving out in two years will be a hassle. Rent money isn't a waste - tends to cap expenses more than home ownership (repairs!) and gives you freedom.

I don't think it has something sense. Why buy a house that you will soon leave. You can rent it temporarily. But you don't need to buy, as this is a waste of money. For example when I bought an apartment at https://www.parkertowers.com/ I lived with my parents. It's just that I already sold my old apartment, and the renovation of my new apartment would have continued for another month. And, so I lived with my parents for the whole month. So first you'll think and weigh all the pros and cons of buying a home.

That is a really good idea, I hope you already moved to the new house and have a nice time there! I also moved recently to a new house and I am very glad about this. But there are few things that I need to change there. The main problem is the floor. I don't know what previous owners did there, but it is really damaged and now I need to spend a lot of money to change everything there. I am lucky to find deltadecking on the internet. At least these guys have very cool offers and i hope that I will save some money. Also my sister recommended them, as she said they do great works. Hope soon I will move there. https://deltadecking.co.uk

This doesn't sound like a good idea because in two years you can spend a lot more money than you could just spend on an apartment. Personally, I would advise buying a house for much longer than 2 years because this way you will not lose money from such an investment. Personally, I have never faced such a situation because my family does not need to move and we have been living in the same place for a very long time. However, there was a problem with the fact that we could not find a quality service for moving. It is sad that at that time we did not know that there are such great services as for example https://getremovals.co.uk , which can help very qualitatively. I hope that over the years you have found the best way out of your situation!