Military family, no children, moving to South Bend this upcoming Spring on military orders of three years. Rent or buy?

Asked by Nathalie Lancaster, South Bend, IN Wed Dec 12, 2012

We have of course been looking at rental options, but also considering buying something instead. Since we would only be in South Bend for the three years, how is the rental market out there? Whether renting or buying, we'd be looking at something near ND campus (convenience to work and of course, appeal for future renters).


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Orla Quirk, Home Owner, Cassopolis, MI
Sat Apr 27, 2013
The market is really great now for buyers! I would buy since the prices are way down and you are considering renting out your home later. We bought a home last year for less than a quarter of rebuild value in Cassopolis, but South Bend has some great bargains, too. Be sure to check out the crime rating map here on Trulia, and LOOK at the crimes listed, since some areas that look high in crime turn out to be high in traffic stops. Good luck.
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Monique Snel…, Agent, Mishawaka, IN
Thu Jan 17, 2013
Three years? I would buy. Why? It is a buyer's market. You can get into a home many times for less than it is worth. Hold on to it for three years and sell it when you leave. You will have built credit and had the opportunity to own your home. You may have to put some money down at closing but there are great programs for those in the military and many times your mortgage will be less than renting.
Good luck with whatever you decide and thank you for your service to your Country.
God Bless
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rnlakehaus, Home Seller, South Bend, IN
Fri Dec 28, 2012
Hi Nathalie I have a great home that is on the market but am considering renting. Home is clean, neighborhood good and fairly close to ND I am willing to work out something for good renters. I have in the past rented to ND students and graduate students from ND. House is 1/2 block off of the new Riverwalk on St. Joseph River. You can respond to 574-993-3612 if interested in getting more information. Reasonable.
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Bruce Gordon, Agent, South Bend, IN
Thu Dec 13, 2012
3 years would be a hard call to buy a home then sell it for a profit or even to be back to a break even point.
Renting near the campus will not be inexpensive due to the demand of students/ rentals for game days.
I still would think for 3 years you should be able to find a good rental for 3 years.Let me know what your dates are to find a rental,how many bedrooms,what distance from campus works.Hope that helps Bruce Gordon/Hallmark R.E.
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Jody Jones, Agent, Elkhart, IN
Wed Dec 12, 2012
The answer from Allen is excellent, but the way you posed the question....are you planning on keeping this as a rental after you leave? That may help you bridge the costs as Allen laid out. But it can also open another whole can of worms. If you turn it from primary residence into rental, your property taxes will go up considerably and you need to be able to charge enough rent to keep from going into negative money every month. Also long distance landlording is not recommended unless you have someone local to manage the rental for you.

I would buy over renting anyway, but just be aware you may only break even or even lose a bit on the sale. If you are prepared for that, so be it. Hopefully in 3 yrs things will have picked up more than they have up to now, but that cant be counted on. Good luck with your decision!

Jody Jones
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Thanks for the insight. Like you said, in three years the market may or may not have picked up, and there is no real way of knowing. If things haven't picked up enough, we were thinking of keeping it as a rental, and using a local property manager to assist with renting it out.
Flag Wed Dec 12, 2012
Carla Pennin…, Agent, Georgetown, TX
Wed Dec 12, 2012
My "rule of thumb" is that when you buy, you should expect to stay in the home five years. I'm not familiar with the market in South Bend (Allen's answer below provides that information). With the cost of closing on both ends, unless you plan to keep the house as a rental as you indicate, it would probably be more financially safe to rent.

Another consideration is the price and availability of homes in the specific area you are looking to buy. Is there a high turnover? My kids are in a town where there are a large number of medical residents moving in and out annually. In your military town, that might also be the case. You would still need to be able to purchase at a price considered below market value in order to sell in three years - and none of us has that crystal ball that tells what things will be like then.
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Allen Grace, Agent, South Bend, IN
Wed Dec 12, 2012
You have an interesting question that can have different factors to consider. First of all in todays market you can buy cheaper than renting, period. Buying is without a doubt the cheapest option not considering time. Your qualification of being near Notre Dame may be a deciding factor as buying or renting near campus is generally higher than the community as a whole due to demand. You can buy today considerably less than it will cost you to rent house. The problem is the time period that you are here. Appreciation in this area in good times have been in the 3-5% range/year but due to the market conditions over the last few years has been O or less. When you sell you will need to plan on about 8-10% of the selling price to go in selling fees and taxes. Your challenge is to determine if you can buy smart, live for 3 years at low mortgage cost and sell at a price that will cost you less than what it would cost you to rent for 3 years. Depending on the house you may of course have maintenance cost that you would not have in renting. I would believe that buying may be a better option but probably not in your perferred area considering the 3 year time you have established.

Call if I can clarify further in some way.

Good Luck.
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