I’ve decided to live in this damn town one more year while I explore other opportunities and career plans. I’m wondering if investing in some property is a good idea. Right now I live in an apartment. I have about 2000 - 3000 saved up (depending on how much of my tax return I put into savings vs paying off other debts) Where I live the housing prices haven’t moved much lately. I don’t know if its worth purchasing a place when I know for sure I will leave after next year.
No, it isn’t.
What he said. Closing costs and other expenses will eat up any appreciation you might see in just one year. Also, a $3000 grubstake is too small an amount to even think about purchasing real estate.
On the other hand, the OP lives in Hell, and as we know, people are always dying to get in. Seems to indicate good strength on the demand side.
I’m going through the same question, but my horizon is more like nine years. If you’re only looking at the possibility of living there one more year (and if your location is truly Hell), don’t buy. There’s a pretty honest calculator at the NY Times (free registration may be required) that can show how long it’ll take to break even, given current rent, hypothetical home purchase price, various rates of inflation & investment earnings, etc. (It’s honest in that you have to make your own assumptions about these numbers). For me, it looks like it would be between 7 years and infinity for me to be better off buying a house, depending on uncertainty in the LA real estate market, which is crazy.
Yeah, you need a long time frame to make sure you recoup your real estate investment. If you really love the town and house and plan on living there for ten years, then go for it. $3000 is pocket change and really not enough to buy a house, unless housing is really cheap in Hell.
I agree that a year is not usually enough time to recoup your purchasing costs
(although I did once make over 25% in under a year - bought at £30,000 ($60,000), sold at £41,000 ($82,000) :eek: :smack: ).
In the long run, there’s nothing to beat it.
My parents bought in London for £2,500 ($5,000) and sold 57 years later for £250,000 ($500,000) - and of course paid no rent in that time.