If you plan on moving in the next six months or so there are a lot of thing you’ll need to consider. First you’ll have to decide where you’re moving. If you’ve already got a job lined up then you already know. If you’re still deciding where to move you have that to decide. Once you know where you’re moving the most important thing to do is find a place to live. The most important question is whether to rent or buy. Here are a few tips to help you decide which is best for you.
1. Figure out your timeframe.
How long will you be living in your new city? If it’s less than one year, you should probably rent. If it’s more than one year, consider buying a house. If you qualify for an FHA loan you’ll be able to make a downpayment of 3% and you can rent it out when you move to cover your mortgage. If you do get an FHA loan you must be the primary occupant for at least 12 months, only after that can you rent it out. If you plan on living in your new location for more than a year, buying a house can be a wise investment. If you move after 12 months you can rent it out for more than the mortgage and have a little extra income coming in or just pay off the mortgage early.
2. How much can you afford?
If you’re moving to an expensive area (anything in California) then you may not be able to afford a house even if you do plan on living there for more than a year. In this case, if a house is too far out of your price range, consider renting for less than you can reasonably afford and saving the extra for a downpayment on a house. When you take on a rent or a mortgage you need to be sure that your payment is no more than 25% of your income. Many people suggest that your payment be no more than 33% of your income but experience has shown that 33% can really put a strain on your finances.
3. How much privacy do you want?
Whether you rent or buy a house, taking on a roommate can really save you some money, not only with the rent or mortgage, but also with the bills. Of course, a roommate does come with some privacy sacrifices. If you’re living in a particularly small efficiency those sacrifices will be greater than if you’re living in a two bedroom, two bathroom house.
The most important thing to take into account is your personal situation. Where you are moving, when you are moving, the current market situation, how much you can afford, how much privacy you want, and any other personal preferences you have all need to be taken into account. Just careful to not let your personal preferences undermine your financial stability. When deciding whether to rent or buy, you must be pragmatic.