Moving to Spokane - can't decide whether to rent or buy. May not be staying in Spokane > 2 yrs. 3br 2ba south hill or similar. Thoughts?

Asked by Movinginland, Spokane, WA Thu May 24, 2012

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Tom Price’s answer
Tom Price, Agent, Airway Heights, WA
Fri May 25, 2012
Buy vs. Rent

Advantages Considerations :
Buy Property builds equity Responsible for maintenance
Sense of community, stability, and security Responsible for property taxes
Free to change decor and landscaping Possibility of foreclosure and loss of equity
Not dependent on landlord to maintain property Less mobility than renting

Rent Little or no responsibility for maintenance No tax benefits
Easier to move No equity is built up
No control over rent increases
Possibility of eviction

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.
Plus you may see appreciation.

Buy vs. Rent Comparison (On Ginnie Mae Website)
The chart below shows a cost comparison for a renter and a homeowner over a seven year period.
The renter starts out paying $800 per month with annual increases of 5%
The homeowner purchases a home for $110,000 and pays a monthly mortgage of $1,000
After 6 years, the homeowner's payment is lower than the renter's monthly payment
With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years

Yrs Rent Pmt Mortgage Pmt Monthly Diff Atter Tax Savings Yearly Diff After Tax Savings
1 800 1000 -200 -50 -2400 -600
2 840 1000 -160 -10 -1920 -120
3 882 1000 -118 +32 -1416 +384
4 926 1000 -74 +76 -888 +912
5 972 1000 -28 +122 -336 +1464
6 1021 1000 +21 +171 +252 +2052
7 1072 1000 +72 +222 +864 +2664
8-30 Savings increase every year

Let me know if I can help in your search
Regards, TomPrice 509 990 2020
Prudential Spokane Real Estate
0 votes
Lori Thomas, Agent, Spokane, WA
Tue Oct 30, 2012
I have a 4br 3ba home for sell on the south hill which I also would consider leasing. I also have a 3br 1 ba home on the south hill that I'm in the process of remodeling and could also be an aption. Let me know if you have any questions. Lori (509)599-5813. MLS #201223664
0 votes
Tim Page, , 99037
Thu Jun 7, 2012
Clearly you will want to rent. You have a high probability of losing money if you buy and try to sell within two years.

If you rent first, you can decide the best areas to buy if you want to stay longer.
0 votes
Mack McCoy, Agent, Seattle, WA
Thu May 24, 2012
When in doubt, take the path of least commitment.
0 votes
David Kral, Agent, Spokane, WA
Thu May 24, 2012
Good question to ask.
We're telling clients;"Don't even think about buying if you don't plan on staying a minimum of 5 years:.
0 votes
Jeannette Ka…, Agent, Spokane Valley, WA
Thu May 24, 2012
Before the market change the rule of thumb was 3 years to be in a regular resale market buying a home that did not require any major work. The reason being that a sellers closing costs run around 4% + the realty fee so there would need to be at least a 3% increase in value per year for that seller to break even. However if you are interested in buying a fixer and can do the work yourself so can just pay the cost of materials you could even make money in 2 years. So depends if you are a DIY fanatic.
0 votes
Hi Jeannette, thanks for the response. I am not looking for a DIY fixer-upper. But I might be interested in buying a place with the thought that we could rent it out if we ended up leaving after a couple of years. Is it easy to find decent renters at a price that will cover the cost of the mortgage on a house around $200,000?
Flag Thu May 24, 2012
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