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How and When to Get a Home: A Spin on the Residency Question

Home Mortgages and Home Buying How and When to Get a Home: A Spin on the Residency Question

  • Avatar Dont_know_mind 
    Participant
    Status: Physician
    Posts: 989
    Joined: 11/21/2017

    I bought a my first house as a first year resident. It worked out well for me, but not for some others.
    If you want to generate wealth, I tend to think that getting debt/leverage when you are young and compounding that can work our well. But you have to find something that appreciates and be able to cope with the loss if it is a loser. And losses will be magnified by leverage. And if you lose, you can always step up to the plate and improve your game and win
    eventually, or find yourself bankrupt.

    It’s a complex question. The outcome if you buy in this situation is operator and luck dependent. But that happens with any type of risk taking.

    #214637 Reply
    Liked by Tim
    Avatar Jack_Sparrow 
    Participant
    Status: Physician
    Posts: 86
    Joined: 01/09/2019

    But if your decision is financially motivated (i hate throwing money away in rent) its not a bad move.

    Click to expand…

    I thought you were on to something and your post was going to end just as well as it began and then I came to this. I had such high hopes since you said you had some experience in managing rentals for your parents. Renting is not throwing money away. I’m going to repeat it because it’s that important. Renting is not throwing money away. Once people understand that, they’ll look at their situation differently and we won’t have the 50th ‘Rent vs. Buy’ thread this month*.

     

    *Repeat threads don’t really bother me as it’s a chance for everyone (including myself) to learn something.

    Click to expand…

    Good catch. It was a typo on my part that completely changed the message. I second that renting is not throwing away money. If it makes any difference, our net profit margin on average was ~8% of the yearly rent on most properties. We ran a simplistic business (medicore duplexs and SF, also we are focusing more on trying to build equity for retirement than cashflow.) But that ~8% a year gives you a ballpark on what your paying in premium to rent versus own. Over 3 years, that’s pennies compared to what you could lose on a bad sale, if you had to replace a roof, HVAC, etc.

     

    #214641 Reply

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