[maxtower]

[ QUOTE ]

I already have a room mate that's moving down there with me so that would be good. The only concern for me is that since I plan to do alot of traveling for fun, some for poker (don't poker players who travel alot to poker events own houses?), that I don't want to really commit myself to staying in a certain location for the long term.

That's something I only want to do when i'm older with a wife and ready to settle down, I kind of feel like right now i'm not even sure where I want to live long term. I could end up wanting to move to Vegas after 2 years or something, but since I figure my option would either be to rent or buy a house I thought buying the house was assumed to always be the better option. Instead of paying rent to a landlord i'd be paying it towards something I own that I could get back when selling... was my logic. I guess though if I plan to be traveling and changing locations then common sense would say renting is the better option. I could commit to 2 years but 5 is a bit much.


[/ QUOTE ]
If you have never lived in the area, you should at least rent for 1 year just to see if you like the place for long term, and where exactly in the city you would want to live. It sounds like you really have no clue about your future plans in terms of this city. Combining that with an illiquid asset like a house in this bad real estate market would be a disaster.
[ QUOTE ]

[ QUOTE ]
And no one needs to buy a house. They need rationally gauge the cost of renting vs. buying and make the best decision based on their specific circumstances. Typically renting is cheaper than owning over the short run, but appreciation makes up for it. But today any appreciation looks very iffy over the next 2-5 years.

[/ QUOTE ]
This part i'm not really understanding, if I were to lets say buy a house being foreclosed for $110k thats worth $180k and I live there for 2 years and I sell in 2 years for $180k because there was no appreciation then I would be profiting like $70k right? Maybe more if I fix the place up some. I would also have a place to live basically while making money.. whereas if I rent that same house I could just end up paying $700 a month for 2 years and have a net loss of $700 x 24.

Even if a house didn't appreciate and you can't get a good deal on it... wouldn't it just be, you buy it for $120k, you live there for 2 years, you sell for $120k and pretty much break even vs paying rent for 2 years? Or I guess the fees TC mentioned along with:
[ QUOTE ]
your transactions costs, home improvements, repairs, taxes

[/ QUOTE ]
can come out to make buying more expensive.


[/ QUOTE ]
This is a separate issue. Its always a good idea to buy an asset for less than its intrinsic value. Thats how you make big bucks in RE. These types of deals are not easy to find, and certainly the average person doesn't make them. You will rarely find these deals through the normal (agents, MLS) channels. Most of the discussion in this thread has been centered on paying market price for a property, since thats what most people do. If you can buy something below market price, then you'll have to evaluate that specific deal to find out if its a good investment compared to renting.

[ QUOTE ]

A friend of mine I was just talking to says that one of the worst declines in property value in housing markets has been like 3%, so even if you were to buy a $120k house and take a 3% loss, thats $3600 loss in value, but wouldn't that still be cheaper than the amount of money you'd pay in renting? Also, thats a "worst" case scenario... so don't you just save money as opposed to renting, while giving your self a possible chance that it might even go up within 2 years? Seems like a free roll in that sense?

Yeah, i'm inexperienced obviously, just trying to make sense of this stuff [img]/images/graemlins/smile.gif[/img]

[/ QUOTE ]
Your friend is wrong. Ask Californians what happened in the early 90s. The 3% decline your friend is talking about is probably a nationwide average. I don't know about Austin, but you need to look into the specifics of the deal and the city market, not nationwide averages. If you can purchase a place for less than the price of renting then its a good deal. If you can't then stay away. Be realistic about appreciation in the next 5 years (there probably won't be much if any) and use a rent vs. own calculator when figuring out what to do with a potential purchase. Check out dinkytown.net for one of these. Perhaps more elaborate ones exist.

Bottomline: You need to read a lot more about this. Search this forum for other discussions. It comes up a lot.