recommending buying property to a 22 year old moving out for the first time in an area with a huge housing surplus is one of the stupidest things i've seen on this forum.

What is recommended for the max. you should be paying in rent? Isn't it like 1/3 of your monthly paycheck for rent+utilities?

Tony,

22 is a mature age. Are you saying he is incapable of discipline? Sometimes you gotta take risks in life to be successful and this isn't even considered that much of a risk. With his salary it's clearly a profit to buy than to rent a whole unit which he would be able to pay off in a few years time. Regardless of the housing surplus, if he buys he would be able to own the property at the end compared to renting. Market is cyclical so there's always a prospect for gain. Many young people became successful because they took reasonable small risks. So what if he can't sell/make a lesser profit from selling(and you can't say that for definite as well)? he atleast owns it whether than paying all those rents for nothing.

You may have been mature at 22, not everyone is. OP may be responsible but still, he may not actually want to settle down for 5+ years, and even if he thinks he does he's young enough that something could come up in 2 years and terminating a lease is much easier than putting your house up for sale.

I completely understand where you are coming from LetsChopit, building equity in a house is obviously preferable to giving money away to a landlord or management company but that doesn't mean it's the best decision for his needs.

It depends on what you make. 1/3 out of a 5k paycheck is very small, 1/3 out of a 1k paycheck is very big.

My rent/utilities are 1/2.

thrasher,

He might not be certain about what his needs/wants are, so purchasing a home is a good suggestion if that could be what he desires. If he's really got a decent and stable job/income like he said, paying that off over a couple of years will probably not be a problem unless he doesn't have a good & stable job/income then renting the whole unit to himself is not recommended. But choosing a good location is obviously important so that if he does decides to move for whatever reason he could rent it out.

No one at the age of 22 should commit himself to living in one area for several years.

That's a matter of his personal preference. There's definitely no one approach here.

Yup. Buying when there is a housing shortage would make a lot more sense.

Also, since rental prices have obvously dropped even more than property values, the relative advantage of renting is gereater than ever.

Chaining yourself to a city when you're 22 and presumably early into your first job is retarded.

That depends upon the city, the job and the individual.

For most 22-year-olds, I'd agree. Given we're talking about Florida, even moreso.

I've been near the same city since I was 18, through 8 job changes and three career changes. Never rented since I got my own place. For me it has worked out great - my property values have gone up more than the stock market (of course it doesn't hurt to live in a country that has appropriate financial regulation).



Normally, I'd say it makes sense not to buy until

• you can afford to buy enough house that you won't need to trade up too often,
• you have a larger than minimum down payment
• you know enough about your career path and the local economy to have confidence you won't need to move for at least a decade

There's not too many 22-year-olds who find themselves meeting these criteria, but there are some.

In the current market situation, it might make more sense to buy than it usually does. Purchase prices are way down, but seem to have hit a floor. Interest rates are low. The US economy looks like it might finally outperform Canada and Germany - it already is in job creation.

In the long term, US real estate will have to wait at least a generation before it again sees the gains it did from 1946 to 2006. It's simple demographics. Real estate investing may be moving from buy and hold to cyclical. There's still lot of opportunity in cyclical markets. What sort of market conditions do you realistically think we are going to see in the next 15 years that are better than those in Florida right now?

Surprisingly I found an amazing deal and am paying only $650/mo, which includes utilities and tv/internet. Its a fantastic location, walking distance from supermarket, bars, shopping, ocean, safe neighborhood and great relationship with the landlords... that's a tough find for Florida.

Shortage = higher price

Price drop is temporary. Price will only rise due to inflation.

Let's consider this scenario:

Suppose the OP purchased a home worth $120,000 instead of renting an apt for $900/month. If he purchased the home with $0 down payment, 4% mortgage rate and 1.35% annual property tax. With just after 2 years, he will be making an annual average savings of $864. In his third year, that number rises to $1,330 and we're talking about annually, not what he saves in total. Buying is always better than renting over a period of time.

Again, that's his personal preference. I'm sure he has his own goals and plans in life. If he's planning to go into a field that involves a lot of travelling in the near future such as travel agent, cruise, tour operator jobs etc. I can see why this is a bad option, but he's got a stable decent salary and job he loves I don't see why normal people would wanna relocate their city of residence for no particular reason. Poor employment situation in the city is I think the major factor in people's need to relocate. Normally, people don't just move to other city just because they think the grass might be greener there.

Is this before or after OP has to pay for a washing machine, dryer, fridge, pest control, insurance, etc...

just playing... I think the buy vs. rent part has been exhausted, both points are made and have validity.

Your sarcasm detector needs fresh batteries.