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To Rent or To buy?

To Rent or To buy?

Old Jun 1st 2016, 10:37 am
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Default To Rent or To buy?

We're moving to South Florida in a couple of weeks, and are currently looking online (through a realtors portal) at houses to rent.

We are undecided whether (once we have built up a credit score, so hopefully 12-18 months) to buy or continue to rent.

If we decide to continue to rent, we will try and look for a home to settle in, with a pool and enough bedrooms bathrooms for us to be comfortable. If we decide to buy, we will look for maybe a 2 bed apartment, so we have extra each month to save so we have a bigger deposit. (We will still save if we spend more on rent, just not as much).

We're aware how much more expensive it is to rent, and I hate the idea of paying someone else's mortgage (although I'm trying to look at it as 'paying for a lifestyle, and paying to not have to do home maintenance'...)
However
We are looking to be in the US for around 5 years, and then we're hoping to take a year out to travel before coming back to the UK. (That's the plan atm anyway ha!) So we would rather not be tied to a house in case we can't sell, but I'm not sure this is reason enough to not buy. We have two kids plus me and my husband.

If anyone decided to rent long term instead of buy, or vice versa, can you let me know your reasoning please?

I have done the NY times algorithm, which said it would be cheaper to buy after 3 years but I'm not sure how accurate this is.

Thanks everyone!
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Old Jun 1st 2016, 12:36 pm
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Default Re: To Rent or To buy?

If your total time horizon is five years it is unlikely to make sense to buy. A buy-sell round-trip is expensive, about 10% of the sales price, so if you're not owning for several years it is unlikely that there will have been enough price inflation to cover the costs of buying and selling.

Rent appears "expensive" because it also covers property taxes and the repairs and maintenance of owning a home. A roof in the US only usually lasts 15-20 years and will cost $10,000-$15,000. A heating/ AC system typically lasts 10-15 years and costs about as much as a roof. So statistically speaking if you own a home for five years there is a good chance that you will have to pay for a roof or AC system, and even if you manage to dodge those major expenses, you may find the price you're able to sell for is depressed because of the "obviously old" roof and AC system.

Last edited by Pulaski; Jun 1st 2016 at 1:54 pm.
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Old Jun 1st 2016, 12:39 pm
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Default Re: To Rent or To buy?

That's my gut feeling. Thanks for the response - just the sort of info I was after.
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Old Jun 1st 2016, 1:50 pm
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Default Re: To Rent or To buy?

Yeah, if you know you're only staying 5 years but looking to rent for 12-18 months, it's not looking like a good idea to buy and buying when you first move isn't a great idea. So many different pitfalls to owning here that you just won't know about till you've experienced the local lifestyle.

Also, what status are you moving here under? If it's anything shaky, as in you're not a USC, then getting laid off and having to move quickly isn't so much fun.
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Old Jun 1st 2016, 1:54 pm
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Default Re: To Rent or To buy?

L1-A - another good point,while obviously right now I don't see that happening in the near future I'm not naive enough to think that circumstances can't dramatically change in as little as five years.

I think renting makes the most sense. Over here we have been serial buyer/sellers... i.e., buying, renovating, selling, moving on. And its been pretty straight forward and we've made a healthy amount of money doing that. However, I gather its harder to buy/sell in the US..

Thank you both for your help
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Old Jun 1st 2016, 2:01 pm
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Default Re: To Rent or To buy?

Originally Posted by smembug View Post
L1-A - another good point,while obviously right now I don't see that happening in the near future I'm not naive enough to think that circumstances can't dramatically change in as little as five years.

I think renting makes the most sense. Over here we have been serial buyer/sellers... i.e., buying, renovating, selling, moving on. And its been pretty straight forward and we've made a healthy amount of money doing that. However, I gather its harder to buy/sell in the US. ....
If you want to live in a fixer-upper while you renovate it, it is certainly possible, though of course you won't make as much as the reality TV shows would have you believe, but I can't honestly recommend moving to a new country and trying to renovate a house while simultaneously trying to settle in. For major work you'd need to learn about building codes and city/county permits to do the work, and inspections to ensure that the repairs or modifications were done "to code".
.... Thank you both for your help.
You're welcome.
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Old Jun 1st 2016, 4:22 pm
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Default Re: To Rent or To buy?

I agree with the others. It doesn't make much sense to buy if you're only going to live in the home for 3-4 years. Too much expense and hassle. Much easier to rent and you'll have a lot more flexibility if your circumstances change.
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Old Jun 1st 2016, 9:56 pm
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Default Re: To Rent or To buy?

This helpful calculator may help you decide

Rent Vs. Buy Calculator – Buying or Renting a House – realtor.com®

There are many articles on the web about how long to rent before it's worth buying
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