Rent or Buy (Out of College)?

**NewCollegeGrad23** · 11-23-2008, 03:37 PM

I am a 22 year old male and I graduate from college in May '09. In August, the lease on my apartment is up and I will need to decide whether I want to continue renting, or buy a house or condominium. I only have about $5,000 in savings but I start my first job making $45,000 annually in June. I will also be living with my fiance who makes between $17,500 and $20,000 annually. Both of our credit histories are, although relatively new, fairly clean. We plan on living in the area for a good amount of time (at least 5 years). If anyone could give us any advice on how to proceed it would be much appreciated. Some of our concerns are:

Renting or buying? (as mentioned above)
How much is necessary for a down payment?

Thanks to anyone who responds! Again, we really appreciate the feedback.

**minnesota-mls** · 11-30-2008, 07:58 AM

Thanks so much for your post.

Now is such an awesome time to be looking to purchase. Interest rates are historically low, there are a ton of homes, condos, townhomes for sale on the MLS all across the country, and prices are low.

I would recommend you find a top first time home buyer loan officer in your area. Someone who knows all of the various programs and first time buyer money that is available from the state, country, city programs, etc.

As long as you plan on living in the property for a couple years, I would say buy. You will get the benefits of home ownership (interest on your mortgage is tax deductible, appreciation of the property, principal paydown on your loan)

I hope this helps!

**Mike Taylor** · 12-01-2008, 02:27 AM

As minnesota says, as long as you are looking at this for the relative long term, now is an amazing time to buy. Your downpayment required will most likely be a minimum of 3.5% if you use FHA financing. You should really find a good mortgage broker or find a good real estate agent and have them recommend a good mortgage broker to you.

**rtibbs4** · 12-01-2008, 09:13 AM

Hi, everyone has added helpful advice but may I add that you should also have a plan for after 5 years. Will you want to sell or hold the property for rental income. Also, since you are not married yet, how will you be taking title? Things to think about.

**jamesww** · 12-03-2008, 07:04 PM

Do a rental equivalency calculation for renting and buying similar properties. If that calculation works out then you should most definitively buy. If that calculation does not work out to be wise financially then hold off on buying as your market will likely see significant declines in value allowing you to save some money. If you would like an example or help on how to calculate the rental equivalency then send me a DM and I will show you how.

**gelokron** · 12-11-2008, 05:40 PM

If you decide to buy I would look for investor sellers that might offer you guys some kind of owner financing if credit is an issue. A lot of times they may have some incentives for you as opposed to a regular house on the mls. Good luck. Try to get something cheap or with great terms.