My wife and I have been renting a sub 1000 sq ft apartment for $1500 a month. That’s a lot for so little but it was necessary. When we got married we worked 100 miles apart from each other and moved to the middle which just so happened to be smack dab in the heart of downtown Houston. You can’t rent cheaply there. Even moving a couple miles either direction would have added to an already horrible drive since traffic would have factored in much higher for one of us.

Fast forward to today. For some stupid reason we had $32K in cc debt that we shouldn’t have had. We paid it off in a year and the money started rolling in. I got a job much closer that will allow us to move out to the suburbs to keep each of our drives around 30 miles each. That’s not bad for Houston. Some people in other parts of the country don’t understand how this city and it’s jobs are spread out. We started saving money. Our credit scores are in the mid to high 700′s. We need to move but the question is whether or not renting for another year is going to do anything for us that buying now wouldn’t.

We are currently trying to buy a house. We qualified for a $700K loan and are trying to purchase a $232K home on a 15 year loan at a 3.5% interest rate. That’s near laughable! With such a short term loan and low interest rate we aren’t putting much money down. As little as possible which for us is a lowly 3.5%. We’ll still hit the equity mark of 20% in that house in only 4 years and we still aren’t going to pay the minimums. Our plan is to pay it off in around 10 years. Yes our out of pocket per month will rise over what we pay now for a number or reasons. We’ve got high property taxes, utilities will go up and maintenance is our responsibility. Those will never change regardless of when we buy a house but the odds of an interest rate staying going even lower or staying here forever is pretty slim. It may not move for a little while but why risk it? The house is also 3X the size of our rental. We plan to stay here until our kids graduate high school. We don’t have any kids right now. The house is 18 years old in an established neighborhood and prices in this part of the country are fairly stable. We aren’t California where houses even today cost 3X to 4X more than they would cost here which is ridiculous.

I don’t only look at time as the main criteria to decide if renting is a better option but also interest, condition of the property, how much you have in the bank for a rainy day, as well as your personal comfort level and space requirements. We could certainly buy a house the size of our rental and come out way ahead financially but we’d probably be mugged walking to the car. If we tried to rent a house the size that was are wanting to buy we’d pay far more. In the end though the math told us that for our personal use making the assumption that the house never increases in value that we’d need just over 4 years to “break even” on it so I’d say not too shabby in relation to this article.

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