My (28M) wife (31F) and I are expecting our first child in October. We live in the DMV, and need to figure out our housing situation. We have two large dogs as well.
Our financial situation is 210k income, have 75k saved for a down payment, 6 months emergency fund, 750 credit score, 130k in retirement across 401k and IRA, and are expecting 200k in May from my father as part of an inheritance.
We have been budgeting and our take home is ~12k a month. With daycare going to cost at least $2k a month in the area, rising costs, and uncertainty, I'm stun locked by what our best move is. We currently rent a $1800 condo on a monthly agreement. We would stay here, but not only is it only 640sqft, it's on the third floor with no elevator. After petcare, retirement, utilities, transportation, health, food, childcare, vacation, we will have about $5k to spend on rent or a mortgage.
I'm looking for some ideas of what to do. Housing market is rough right now in this area; move-in ready houses are selling in 48 hours with multiple offers and contingencies waived.
We can afford to buy a house using the inheritance, but with the prices in the area we would still end up spending $4k+ a month on a mortgage. Additionally my wife is homesick and has wishes to move Rochester NY. Having more land and more house sounds great, but I don't think it's worth walking away from our support system with a child on the way. My job is remote but moving away from DMV would limit my future positions. She is a RN. Does it make sense to buy if there's a possibility we may only stay 3-5 years?
Is there a better way to use the inheritance? I would love to buy a house, but the peace of mind of putting that money away and touching in 30 years feels so good. What would be the best way to invest the money in that case?
Is our best option to just rent right now? I assume we would end up paying $3000+/mo in rent, so is renting + investing a safer financial move in the interim?
Buy a house or rent and invest?
byu/CryptographerWest668 inpersonalfinance
Posted by CryptographerWest668
4 Comments
what’s your goal? make money grow or buy a house? you are conflating the two things.
Forgive me, what does DMV stand for?
Where I’m from, your post would suggest you live in the department of motor vehicles. XD
If you’re not sure how long you’re going to be in the area I’d rent, especially with how much cheaper renting is vs buying.
To buy and sell a house it’s about 10% of expenses down the drain. Then add in interest, insurance, maintenance, and property taxes.
Probably shouldn’t buy a home if you are both split on where you desire to be. You don’t want to buy a house and then plans change in the next 5 years.
Also , do you want your own home because you really wish to be a homeowner and or because you feel like you should?