Home Buying in Lakewood>Question Details

crzyjulz, Home Buyer in Lakewood, OH

Rent or buy starter home?

Asked by crzyjulz, Lakewood, OH Thu Aug 14, 2014

My boyfriend and I are currently renting in Lakewood. We are debating if it is time to buy our first home (starter home) in lakewood. We are looking at homes priced 100,000 less than what we were prequalified for in Lakewood. We love Lakewood as a young couple because of its proximity to Cleveland and things to do. However, we know that this is not going to be our "forever home" and estimate that we will live in this home for less than 5 years and will opt to move to the east suburbs. Is this a smart move in this market? How do we determine if we will at least break even on a home? We have talked about potentially renting our Lakewood home when we are ready to move to the eastern suburbs. ---- On another note we are wondering if we should just spend close to our max and buy a large home in Mentor, OH that we know we will live there for many years. We will just sacrifice proximity to city. Any thoughts would be greatly appreciated! Thanks!

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Hi there. It seems that you didn't get a good response to this question yet! Seeing as this was almost a year ago I'm not sure that my reply will do you any good but your situation is not uncommon to other first time home buyers so hopefully this advice will help someone. Aelfrice is flat out wrong. You CAN buy a home as an investment and for those who are handy - or have close relationships with people in the trades, etc. - you SHOULD buy a home as an investment if your life will permit it! I'm a young Realtor and I've been investing in the real estate market since 2008. The profits have been great and there's never been a loss. When you live in a home as your primary residence for at least two years and you sell it thereafter, you have no capital gain tax to worry about! So if you are up for the challenge you can build wealth in equity and leverage it to purchase the next, bigger and better home.
Lakewood had been an extremely hot market in 2014 and currently in 2015 it's even hotter. It's also a great place to live.
If your approval amount is based on both of your incomes then it's an excellent idea to stay comfortably under the maximum amount in case something goes wrong at work for one of you, etc. etc. On the other hand, if you have the "forever home" within your reach right now, you should give it serious consideration. The housing market is back on the rise and typically a property gains 1-2% in value each year when the economy is moving in the right direction. We dropped approximately 20% in value in this area since 2007 and for a good while the prices did not increase. Now we're heading up, we're out of the basement and the interest rates are extremely attractive. So buying your forever home today may be a more pain free way to obtain it at a lower price and interest rate than it will be in the future.
I'm here and available to anyone with the same scenario who wants help and guidance in weighing their options and finding out what avenue is best for them. As I said before, everyone is different!
0 votes Thank Flag Link Thu Jul 2, 2015
It seems like you don't know what you want. You know what you should want -- and that's just absurd. Lakewood doesn't sound "good enough" for you, so you'd rather live in the exurban wilderness. Mentor and Lakewood are worlds apart. Decide what you want and do it. Are the properties in Lakewood not grand enough for you? Expensive enough? Exclusive enough? Is the neighborhood too diverse to raise a family?

Having lived in both communities, I know which one reeks of closed-minded, good-ol'-boys on Harleys and which one is a diverse, walkable community. I'd rather raise my family in Lakewood than let my children stew in boring, white-sauce exurbia.

Don't buy a home as an investment. If you didn't learn anything from 2007, you belong in Mentor. At least most of your neighbors, in their "forever homes" will share your fears.

What are you thinking when you expect to stop enjoying things to do that are proximate to Cleveland proper? Do you expect to grow out of your likes?
0 votes Thank Flag Link Tue May 5, 2015
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