should i rent or buy in austin, tx?
Is it worth it to buy a home (condo) as a graduate student?
I’ve just been accepted into a PhD. program in Austin. The average time for completion is 5.5 years. Instead of moving from place to place I’m thinking of purchasing a condo there in the $75-85k range.
I’m 21 and graduating with my B.S. this May. I have no student loans. I own my car. I’ve paid the most of my tuition + rent + insurance + CC+ my car without parental help. I pay for my CC in full always. I also have $4k in Roth.
My acceptance into the program includes tuition waived, free health and dental insurance, one year of Roth IRA paid and a $2500 “signing bonus.” Most importantly, it guarantees an annual $24,500. There is no state income tax in Texas. But, I cannot work under the school’s contract.
Many grad students buy their own apartments. In the same building, rent for a 1BR/1BA is ~$500-700 and many of the grad students there I’ve spoken with have mortgages in the $700-800 range.
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Tags: apartments, austin, dental insurance, free health, grad students, graduate student, home condo, insurance, mortgages, phd program, rent, roth ira, should, signing bonus, state income tax, student loans
Normally, I’d say rent–but if you’re going to be there for 5-1/2 years, and the mortgage is not much more than the rent there, you might as well buy it.
Excellent luck to you.
buy if you can afford to and get qualified. $24,500 isn’t very much money. I don’t know if you can get qualified if that is all you will get.
Buy your property…for a loan that small you probably wouldn’t be spending more than 10k a year on a mortgage. Plus when you are finished with your program…you can sell your place and make money with appreciation. Also the interest you pay on your mortgage will be tax deductible. Excellent luck and it sounds like your doing fantastic!
Congrats on the Ph.D program that is awesome! When buying a home or thinking about buying a home you want to look at one thing, Rent vs Mortgage payment.
If you can get a mortgage payment for less or equal to what rent costs in the area then buying a home would be best. If renting an apartment is cheaper by a lot then you want to rent.
If you can afford to own a home then that would be fantastic for you and as an investment. For more information on buying a home here is some useful information this guy has a lot of excellent tips on his site hope it helps.. best of luck
http://www.bobrealestate.com/Nav.aspx/Page=/RealEstateTips/HomeBuying/Default.aspx
On the rent vs buy question: given the financial ability Buying is ALWAYS better. In your situation, you may want to consider buying a multi-family property and occupy one unit. Consider renting the other side to a Grad student to help you pay off your mortgage. Over time, you’ll build an equity position that you can use to buy a home or to use a 1031 exchange to trade your property for a better one. If you follow this advice, you’ll be in a position to make real wealth for yourself instead of giving that opportunity to a landlord.