So I am being forced to move out of the house I am renting due to it being sold and have a few questions.

I am planning to move states in about 10 months and me and my girlfriend are trying to find a place to rent until then. I live in a small town and places are hard to find, ****ty, and also expensive for the area. (500-800 / month).

I was wondering if it would be a good idea to buy a house like

http://www.realtor.com/realestateand...=24&source=web

or

http://www.realtor.com/realestateand...=19&source=web

or find a foreclosure

I also have a friend who would rent from me and basically pay the mortgage.

Problem is that I only plan to be here less than a year. Is it worth it to save me and my gf money on rent by buying a house and renting out an extra room or suck it up and pay 800 a month in rent?

I make $35k she makes $27k.

No.

The closing costs alone would cost a solid fraction of your total rent for 10 months.

And there are a ton of things that could go wrong and end costing you a lot if you bought. Eg. unfriendly split up between you and your gf, friend not able/willing to pay rent, difficulties selling the property when you move, potentially being pushed into long-distance landlording in an area you wouldn't choose to invest in RE to begin with, etc pp.

The rental market is really strong here.

There are some sub $50k homes that could use a little work. What about living and and flipping a home while the friend pays the mortgage.

Buy a house!! after a down payment your mortgage would be less than 500 a month (taxes not included). This could be income property down the line, i am drooling how cheap houses are outside of NYC

If you have to ask this question, then you seriously need to educate yourself on the most basic level regarding personal finance. I'm not trying to be an ass, but buying a house for 10 months is lolbad 99.999% of the time.

I understand that but projected payments are mid 300s. My friend will pay that and me and the gf will save 800 a month to put into to flip it

Suck it up and rent. Do a little math. You find a place that costs $75k. At closing, you are going to be paying about $19k out of pocket, assuming 20% down. That is $15k for the down payment plus $4k for closing costs and all of the other BS fees the lender will make you pay.

When you sell the house, you pay about 8% to agents, title, etc. Assuming you sell it again for $75k, that is $6k.

You are losing $10k before you even start. If any of the thing kazana mentioned goes wrong, then you are screwed even worse.

makes sense. I will rent.

why wouldn't you make this investment property? You already have someone who is willing to rent it when you go out of state. Also when you buy you get back a percent of interest you pay in your taxes.

I think people are seeing the short term but what about the long term? This will pay for itself once its rented And OP already has a friend lined up to rent it. Guess people don't like free money!!

Closing costs are normally 2-3% so I don't know where your getting 4k from. If OP has good credit he can put as little as 3% down for a down payment so it can cost OP under 5k to own a home in his area.

Mortgage would be about 400 a month and if he's renting he's paying 400 more per month. After the first year it will be about the same as renting costs wise. but hey just my .02

What if his friend doesn't pay his rent or backs out? What happens when the house sits idle for 3 months without a renter? It's not even close to free money.

its 10 months. just rent something and move on with your life. Pay the $5k or whatever in rent and move on.

$5000 in rent is a cheap price to pay to avoid becoming a long distance landlord for a mobile home in ass**** Indiana.

Being a long distance landlord is not something I would recommend. This makes it a bad idea.

You are talking about paying a pretty low amount for rent (even if expensive relative to value of property) for a a very short period of time. Why would you want to create a huge complication in your life to save negligible amounts of money.

what if his friend pays him the rent? What if scenarios are horrible!!!

Like Henry said, you're taking on a huge risk, financial, and life complication for a relatively small reward. It just doesn't seem anywhere near worth it to save a few grand. You're taking on a major commitment and financial obligation for a small reward.

Its not saving a few grand its an investment. Worse case scenario he dishes out 400-500 a month if no one rents it. My understanding rentals in that area go fast.

If he does this for 5-10 years and resells it he can make some nice profit more than just a couple of grand.

OP: as long as you disregard anything demboyz says, you'll be fine.

Let's just assume this is correct and put some more numbers around it.

Mortgage + Taxes + PMI = $480 /m
insurance = $50 /m
maintenance = $100 /m
Total expenses = $630 / m

If OP can rent it out at $800/m, the best case scenario for OP is that he nets $170/m for the trouble of being an absentee landlord. Of course, that doesn't happen. Add in 10% vacancy, and you're suddenly down to netting $90/m.

Apparently, you can't really count on appreciation in that market either. The first house OP linked us to has been on the market for a year with the price dropping, while real estate prices have been going up everywhere. Assuming that you are going to get $10k in appreciation over the next few years seems optimistic at best. So, you really need to accept that you may be selling the house a few years down the road for the same price you bought it at. Assuming $75k purchase price with 3% closing costs on purchase and 8% on sale, you have to make up:
out of pocket for purchase = (75 * 3%) = $2300
out of pcoket for sale = (75 * 8%) = $6000
Total = $8300

How many months of cashflowing $90 does it take to make up that $8300? And that's assuming that nothing goes wrong with the property.

SMH this is why your currently renting

FYI if the house been on the market for a year OP can get the house way below the asking price... I'd figure 65K if the owner wants out.

Its not absurd for renters to do the maintenance which would save OP 100 a month.

Also where in the equation is the increase in your tax refund? Down the line this will make OP money but hey this is my .02

If anyone needs a second reason to think you're an idiot then automatically assuming renting is inferior to owning is a good one.

Buying a home under OP's conditions is ******ed. Someone with no experience being a landlord of a single property at a distance with OP's level of income is just bad in every possible way. There is no sane way to defend the position OP should buy a house to save a negligible amount of money and then have a significant high maintenance investment.

How long have you rented for? keep throwing away money!!

Its not like you build equity in a home or anything... Please advise what you do for a living and how much rent you pay?

I pay $3500 a month and I do something that allows me to pay $3500 a month in rent.

He has to be trolling at this point.