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

No. The last thing you want to think about when moving to another city is selling the house you bought two years earlier.

My wife and I bought a house in early 2018 for $1,150,000. We sold it in early 2020 for $1,475,00 and netted a little over $250,000 in a little over two years. NorCal was a great place to spend a couple of years. Maybe Flagpole can explain to me why it was a bad idea to buy that house for just a couple of years.

depends on where you are wrote:

My wife and I bought a house in early 2018 for $1,150,000. We sold it in early 2020 for $1,475,00 and netted a little over $250,000 in a little over two years. NorCal was a great place to spend a couple of years. Maybe Flagpole can explain to me why it was a bad idea to buy that house for just a couple of years.

You were fortunate. What you did is still not what people should PLAN to do.

Flagpole wrote:

depends on where you are wrote:

My wife and I bought a house in early 2018 for $1,150,000. We sold it in early 2020 for $1,475,00 and netted a little over $250,000 in a little over two years. NorCal was a great place to spend a couple of years. Maybe Flagpole can explain to me why it was a bad idea to buy that house for just a couple of years.

You were fortunate. What you did is still not what people should PLAN to do.

If you mean "fortunate" in the sense that we did our housing market research and evaluation of the local economy at the time, then yes. If you mean "fortunate" that we got lucky, then it was the opposite of that. It was a carefully researched, planned and executed investment and lifestyle decision that produced the expected result.

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.

Let's say you are paying $1,500 a month on rent with your significant other.

You purchase $300k house and take out $240k loan at 2.8% (could be a little lower or a little higher). Property tax is $300 per month, house insurance $100 per month. You do a 15 year loan which is slightly above your current rent per month at $2,000. Let's say you have to pay $7,000 closing costs when purchasing, and $20,000 when you sell in the future. Each year in rent you are spending $18k that you never get back. About $950 of your mortgage you never see again from interest/tax/insurance, but $1,050 is going toward your mortgage. So $6,600 each year is what you are saving from 'never seeing again'... To cover the closing costs when purchasing and selling (total of $27,000) you would need to be own the house for four years to break even. This is assuming the house does not appreciate more than inflation, or about 2%... But we are seeing houses appreciating quite a bit more than that in many areas. In my area it's been steady around 6-10%. If the house appreciates at a modest 4% then you only have to live in the house two years to make it worth buying. If it appreciates 6% you only have to be in the house 1 year for it to be worth it. And if it does appreciate 8-10% then being in the house for one year you are already coming out a head thousands of dollars.

depends on where you are wrote:

Flagpole wrote:

You were fortunate. What you did is still not what people should PLAN to do.

If you mean "fortunate" in the sense that we did our housing market research and evaluation of the local economy at the time, then yes. If you mean "fortunate" that we got lucky, then it was the opposite of that. It was a carefully researched, planned and executed investment and lifestyle decision that produced the expected result.

You were still fortunate. Housing markets can turn on a dime, so even the best laid plans of mice and men...

Also, too many people get geeked about the rise in their house price. My house is now worth more than three times what I paid for it (yes, including the interest I paid). That is better than most in my area, because the main reason our house went up so much is that new homes were added to our neighborhood (a connected completely new area of over 60 homes). In general this has just made our neighborhood more desirable. BUT, other housing nationwide has gone up too since I bought my house in 1998. I still want to live in a house, so it's mostly just a wash (with a slight advantage to me depending on where I choose to relocate).

I really feel for you Americans!

In UK we currently have no stamp duty (taxes on purchasing a property upto £500k/$700k) so closing costs on a house are legal fees (approx £1000/$1400 (as long as property is under £500k/$700k which most are especially to a first time buyer).

Selling costs are legal fees (approx £1000/$1400) and estate agent fees which are approximately 1% but a lot do fixed fee of £1000/$1400. So would be $2800/$3000 in OP case.

What you guys are paying is ridiculous obviously a lot of money being made by lawyers/retailers in US.

Interest rates are 1.19%-2.5% depending on deposit but in OP case they would be at full 2.5%.

Basically in UK with house price growth being constantly up of 5%+ it would be worth considering buying in this scenario but looks like not in US.

First of all, I don't know why the bots kept reviving this thread. It would be interesting to see what the OP actually did, and how things worked out. I hope for their sake, they did decide to buy and are selling now.

Second of all, I wanted to chime in and quell a common misconception about closing costs. Yes it's true that there are some parts of your closing cost "bill" that go down the toilet (commission, title insurance, escrow fees, etc), but there are other, significant costs rolled into it that are a cost of OWNERSHIP, not transactional costs.

Usually, there is a significant "prepaid interest" to pay your lender for each day you own the house until your first mortgage payment is due. Often, the seller has paid much of the property tax for the rest of the year, and you'll have to pay them back for that.

I've seen both of those amounts account for thousands of dollars of closing costs, and people complain about it, but you would have to pay those things when you own no matter what. Well, I guess you don't pay the prepaid interest if you're paying cash, but that's not so common.

my .02

Based on the title, I thought you were buying it outright. To answer the question, do what you want because my advice is irrelvant to you. I would not if I was in your personal situation. I'm not in your situation though and I'm not a mortgage sheep. I dont understand how these mortgage sheep (not trying to be rude here) call it their house when the bank owns the house. It's the banks house until paid off. Facts.

damn, these bots are like aphids...

I would do so. The reason why I am saying that is because I have made it through a few years ago and didn’t, and the whole moving process was a disaster, to be honest. We haven’t even found a company that would help us to move properly, and that’s a huge mistake. Look, if you want to avoid all of our mistakes, go to https://www.cheapmoverssingapore.com/house-mover/ and you will find here everything you need about moving to a new place and you will have the best services with moving your stuff. Believe me, it’s really worth it. The amount of money and stress that you will save if you go here is enormous.

I'm planning on moving in a few years when I have a bigger amount of money on hand, but I'm already looking for options.

Don't buy a house if you're planning to move again soon. If you're a renter, it can be frustrating to write that rent check every month and have no home equity to show for it at the end of the year. But when buying a house, you should plan on staying put for at least three to five years, so as to recoup the initial purchase and closing costs. If the real estate market drops, it could take longer than that for the value of your home to recover. In case you will decide to buy anyway a house, Cash House Buyers USA (https://cashhousebuyersusa.com/areas/sell-house-cash-austin-texas-we-buy-austin-tx-houses-fast/) will help you great.

I don't think so. It is better to rent an apartment for 2 years.

I think that buying an apartment for two years is possible if you have enough money. After you leave, you can rent out the apartment and get a passive income. Very often new houses need repairs. A friend of mine recently bought a new home. Because he was inattentive, he didn't see that the windows of the house were blowing through. So he turned to me for help, together we chose a reliable sealant here http://sealwithease.com/ and got to work. In 3 hours we did everything. I hope there will be no discomfort in the winter.

First, make sure you know your total monthly payment for comparison - not just principle/interest but with 7K down, you''ll have PMI, insurance, real estate taxes and any HOA or other fees.

Next, when you sell, that's usually 6% commission plus depending on market you may or may not pay buyers closing costs. Right now, that's not too common in my market, but when I sold in 2010 I paid all buyers closing costs... markets change, so net out a minimum 6% plus maybe 1% for any staging, closing costs, etc, that may be necessary (different markets will vary in how expected this is).

Also, the "facelift" you're planning may add up more than you expect it too. That might increase your value enough to really make $ off it, or it might cost you a fortune and you'll never see return. E.g. putting in new kitchen cabinets is a visible upgrade that future buyers will appreciate. Termite or mold remediation, asbestos removal, wood rot in the studs, or anything else you have to do when you remove the orig cabinets and find a "joy of homeownership" will not really add resale value they just have to be done.

Also current supply chain issues are making costs for a lot of remodels (both materials and labor) far more expensive than they were a couple years ago.

All of this to be said, a 2 year turn around could possibly net you a profit if you buy something, fix it up "flip style" and sell for a profit, but there are lots of variables out side of your control that could end up costing you more than you'll save.

Also, if you buy with two names on the mortgage and are not married, make sure you have a doc spelling out what happens when *you* want to move in 2 years. What happens if she doesn't want to sell for any number of reasons? If both names are on the mortgage things can really go south quickly if there's no divorce law to settle things legally, and I've seen a lot of folks end up with a headache. Address it up front, hope you'll never need to use the legal doc, but it's good to have one set up in advance of a huge purchase like a house.

Of course, you can buy a house in advance. In two years the prices will increase several times. You can buy a house and rent it out until you move in. Moving is the beginning of a new chapter in your life, so it doesn't make sense to carry old things around. I advise you to hire a moving company that will help you because you will not handle moving. Probably you have a lot of heavy furniture, dishes and appliances at home that you can't even lift. I have been using the services of moving companies for quite a long time, so for me, it is a commonplace. When I moved to Brooklyn, I ordered moving services from https://sekamoving.com/locations/brooklyn-movers/.

Who's buying the house; you, girlfriend, or both as tenants in common?

If you, and girlfriend lives there, girlfriend becomes your tenant and you may not be able to evict her if you dump her or she dumps you; and a prospective buyer may not want to purchase if she has tenancy rights.

If tenants in common, she may not want to sell when you want to sell.

If you want to shack up, rent.

If you want to buy, put a ring on it.

You're betting on house price appreciation that will exceed transaction costs on both the buy-side and especially the sell-side. In traditional housing markets, it might take that long to make that money back. The current housing market is anything but typical, although there will be a reversion at some point. It could easily come within the next two years with the Fed raising rates.

With a house of that price, I don't think you'd get anything out of itemizing deductions for taxes and mortgage interest. You're also taking the risk of a buyer's market two years down the road and tying up money that could be used for other purposes.