Why did you buy?

[MissCrabette]

I always thought we would rent during residency, knowing that there's no guarantee we'd stay there for longer than 3 years. All the financial calculators point towards renting being the wiser choice in the short run, and DCJenn's house story will forever be a cautionary tale for me.

With the Match drawing nearer, I keep hearing about people planning on buying instead of renting because "it's a waste of money to rent." I know we have some people here on this forum who also bought during a short residency or medical school. What am I missing? Why did you buy?

I'm really not trying to start a debate over what's better. I'm simply trying to see things from the perspective of someone who thought buying was the better choice for them.

[diggitydot]

We bought our house because it made financial sense for our situation. Everyone's financial situation is different. I say do whatever works best for you.

We ended up buying in an area where the boom/bust issue was far less prevalent. When housing prices don't skyrocket, it's harder for them to crash.

[SuzySunshine]

We bought because we were here for 7 years and we never thought the economy would drop to what it is now? Would we do it over again, probably but ask me in the spring when we see if it sells.

[v-girl]

Our situation was pretty unique. We knew DH was starting the MSTP to get his MD & PhD in June '98. I was pregnant and did not want to get stuck in an apartment for 8-9 years when we knew we could buy a house for the same monthly payment. We lucked out with the peds hospital here really favoring UTSW grads. DH was told he'd be offered a genetics fellowship/residency during his 2nd year of residency so we knew we'd be able to stay put forever. We've had our house 12.5 years. Looking at another 2 years in it.

For us, it was the only option that made sense.

[Deebs]

We bought during training, but the economy and housing market were both very different then. We ended up making about $1000 (after closing costs, realtor fees, home improvements, etc). If we would have rented, we would have been out what 3 years rent would cost.

For DH's first job, we bought a house again because we knew we were staying forever. After 1 1/2 years, we knew we were leaving Ohio. We lived in that house about 2 1/2 years, and lost about $60,000 when you account for fees, what we put into the house (basic maintenance), and loss in equity (if there is a term for that, I don't know it). While the house cost more than what we would have spent as residents, we still would have lost money - probably only $30,000.

There is no way I would tell anyone to buy a house right now knowing you will only be in it for three years. No one knows what the economy will do by then, but the predictions are not good. Do you want to finish training owning a home there and having to rent your next home while you wait for the first to sell? Or, buy something less expensive because of the cost of maintaining two homes?

I guess if I were you, I would assume you are going to own a home you purchase beyond the end of training, and base your decision from that point of view.

[Bittersweet]

From a financial standpoint, purchasing seemed like a better deal for us. DH had a career before medical school and we were able to make a large down payment and obtain a conventional loan. As a result, our monthly house payment is less than $700. We knew there was no way we’d be able to rent for less and we wanted to keep our monthly obligations to a minimum. With that said, we knew the risk was that we would not be able to sell if DH didn’t/couldn’t do fellowship in our current location and purchased a place that, according to our realtor, would be easy to rent. It looks like we may have dodged that bullet … but it was definitely something that gave us pause.

ETA: Yeah, I accidently made this sound way too positive . I'm still not convinced we didn't make a huge mistake and I cringe everytime I see a house in our neighborhood sit unsold. No way would I purchase without a strong financial reason to do so.

[Michele]

We bought bc 5 y ago the recommendation was to buy if you were going to be in the same place for 4 years. We were also in a non-bubble location. We did an interest only loan and didn't overextend ourselves during residency.

However, we still haven't sold the house. It's been on the market for about 5 months with 25 looks and only 1 offer in the very beginning that our realtor advised us not to accept (it was low and we didn't really want to accept it). I'm annoyed it hasn't sold, but that's what the market is right now. I didn't realize that Shreveport would be affected since prices didn't really rise that much and it was listed as one of the top places for growth a year or two ago. And eventhough GM closed, there were several large companies (a command center, US support and some big factory) that hired like 2-3 times what GM had had.

We had such a good experience selling our med school house that I didn't realize it would be this hard. And it's still nothing compared to the Jenns. But knowing what I know now I wouldn't do it again. I don't like renting and not being in charge of my space. But being stuck with two payments sucks. And the thought that we are moving out of the area in about 7 months makes me more nervous. At least we are only 3 h away now. It's also stressing Russ out. He's the money guy and we are racking up more debt this year than we did the 4 years before.

You didn't ask my advice, but here it is. Don't buy.


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[SuzySunshine]

I should also say that we are in a very medical dependent area and our house is very much in a resident price range so hopefully we won't have as many issues selling it as our friends here who over extended themselves. I will also say that houses are selling better here then townhomes.

[houseelf]

We purchased during residency because we were going to be there for 7 years at least. We made a great return on that house. We purchased during fellowship because we were lured into thinking that home ownership was always a great option. Yeah, jokes on us. We lived in the house for three years and will be selling at a loss. It has been on the market for 6 months and hasn't moved. We hemorrage money every month on this house. I'm trying not to think about it too much.

If one is going to buy a house, I would buy a standard house in the best suburb possible. In my experience starter and mid level homes in good school districts seem to fare somewhat better than the rest of the market. Don't buy anything that isn't standard or has glaring problems though. Best of luck.

[scarlett09]

We are in a 3 year residency program and renting seemed like the best option for us. We also rented during med school. Our income during the past 6 years (4 yrs med school + 2 yrs of residency) has been about the same. During med school, I was making approximately $40K and we had DH's med school loan money to help us out with renting in a very high COL area ($1100/month for a 1-bedroom apt). We had no savings or other income that would have even helped us buy a house there where the prices start at $450K and go up. We also knew that, as much as we loved this area we went to college in, we would never really be able to afford to put down roots there. And we were open to moving wherever the Match took us.

In residency, we are living in a slightly lower COL area (it is still the East Coast though, lol). Now DH makes about $45K and we have my grad school loans to help us out. We are renting because we also do not know if we will be staying here or moving closer to home once residency is over. We also moved when the housing market was tanking all over the country. Our rent is $1200/month for a 2-bedroom, 2.5 bath townhouse, much more for our $ than in our previous location. In the next year, I will be finishing my degree and going back to work, which will at least double our income. This will allow us to increase our nest egg (created by wedding gifts) to a sizeable amount to be able to put a down payment down on a house once we finish residency and perhaps cover closing costs. There is a possibility we might be here an extra year and, if we get a job offer in this area around that same time, I think we will have to see what our income, nest egg and housing market look like before we consider buying.

Bottom line to my long winded story: ask yourselves a lot of questions. Are you ready for the trials and tribulations of home ownership? Or do you like having to just pick up the phone and someone fixes the problem for free? What will your income look like during residency? I know that sometimes renting can be more expensive than owning and vice versa. What would you pre-qualify for in terms of a home loan? What are the prices of rentals in the area you will Match into? What is your long-term plan during residency and beyond? Do you have an area you want to be in when residency is over? Or are you more flexible to wherever the job will take you? And definitely take into consideration some of the stories from the folks here. But only you and your DH can know what the best option will be for the two of you going forward.

[DCJenn]

We actually didn't want to buy in DC but it was the height of the insanity and there were NO rental properties anywhere close to where we wanted to live- at least that had yards and allowed dogs. And, as usual, we ended up dumping a ton of money in to the place and we will still be writing a pretty huge check at settlement. I don't care anymore. DC was relatively insulated from the crash but a lot of development that was slated to happen in the neighborhood didn't because those properties got slammed because of the financial crisis. So, things ARE better there, there's still a ton of stuff that needs to be improved and we just don't have the mental or financial strength to wait it out any longer. Not w/ the house here needed a new front porch. And being military and the ever looming possibility of having to go someplace else, I couldn't deal with being a landlord for two long-distance properties.

My advice is that in THIS market, I'd rent if I were only going to be someplace for three years. Maintenance and property tax are also issues- lots of localities are upping the property taxes to help meet budget shortfalls.

Jenn

[rainbabies]

We didn't buy. I'm SO glad we didn't. Our thinking was, we weren't interested in staying in the area after residency. We wanted to walk away at the end with a simple 30 day notice.
Best. Decision. Ever.

[Chrisada]

We bought for our four year residency. We bought this house for half of what it was going before the market tanked. We were also swayed by the $10,000 tax return check we received. Our mortgage is way less than what rent would be in this area. We live in a great school district right outside of a major metropolitan area, so hopefully it will not be too hard to sell. We are also very close to the hospital so it should appeal to future residents. Our plan now is to hopefully stay in this area for attendinghood. So we would like to stay in this house for the first year or two DH is an attending to save for our dream house. Luckily our mortgage is so low that if we did move away we could swing the mortgage until it sells.

[diggitydot]

Part of the reason we bought our house was because the neighborhood is VERY popular with incoming residents to the two local hospitals. There is something like 12-15 resident families currently living here.

All but one of the resident-owned houses has sold quickly after graduation, even during the worst of the crash. The only one that didn't sell quickly had an unmotivated seller who didn't want to update anything. This neighborhood was put up in the late 80's, so everything is from that era unless it has been updated.

We also chose our specific house for ease of future selling it in mind. All of the big-ticket replacements (ie. furnace, roof, etc.) had already been recently done. If those puppies fail whil we're living here, they're under warranty and won't come out of our pocket.

We've done a couple upgrades here and there, again with the future sale in mind. Installed a 6' cedar privacy fence ourselves, upgraded lighting, miscellaneous painting, etc. We want it to look nice enough that it sells quickly, but are making sure not to invest too much time or money into it.

[Chrisada]

Of course now I just had to call a plumber because sewage came out of the bathroom drain in the basement. Hmmm... renting is looking pretty good right about now.