Im 20 years old, should I buy a house or rent?

27 posts by 17 users

Brett O

Jul 22 '08, 06:17 AM

Hello, I've been lurking these forums for awhile now. I thiink this my first post... this is a great forum with a lot of information, I could read all day if I had time!!

I'm 20 years old and living at home, I want to move out soon though. I am debating on weather I should rent a place or weather I should have the mindset of "I will never pay rent" and buy a small house. I'm not rich so the house would be a small starter house. I do have some money saved up though puting 10 or 20% down wouldnt be too much of a problem.

I guess life would be simpler if I rented, and it would be easier. But it would probably be better in the long run to buy a house, don't you think?

I have wanted to invest in real estate since I was in high school. I'm wanting to move out pretty quick though... so what should I do? Rent or buy a house?

I live in Ohio by the way, In the dayton area. Anyone on these forums live close to where I do? MikeOH?

Thanks guys!!

Edited Jun 26 2010, 05:33

Jon Holdman Moderator

Investor from Wheat Ridge, Colorado

Jul 22 '08, 06:29 AM
1 vote

You have more options if you rent. If you end up wanting to be somewhere else, its pretty easy if you're renting. Owning ties you down more.

Don't think you're going to see any big appreciation in that area. Good news is that prices are rents are pretty well in line (vs. FL, LV, or CA) and you could find something relatively cheap.

Edited Jun 26 2010, 05:33

Jon Holdman, Flying Phoenix LLC

Account Closed

Jul 22 '08, 07:22 PM

Hello Neo and welcome to BiggerPockets! Although the appreciation might not be there, it sounds like you have a desire to be a homeowner, which is a great thing to be! Tax deductions, pride of ownership, no Landlord telling you what you can and cannot do. You haven't said what you plan to do in your life - Are you going to school or plan to? If you need to be flexible and able to move at a moment's notice then maybe you rent for a while until you are stable. However, if you feel like you will be where you are for some time, then buying is better I think. But, use the knowledge you are getting from reading the posts here, and buy at a discount, so you are going in with some good equity, not just from your down payment. Now is a good time to buy, but make sure you buy well! let us know if you have specific questions! Good luck, Mike

Edited Jun 26 2010, 05:33

Jason Hanson

Real Estate Coach from Oakton, Virginia

Jul 22 '08, 07:26 PM

I would go to the creative financing section forums and learn how to buy houses that way.

You need to learn how to buy houses subject-to and on lease options.

I would not put 20% down on a property, because if you are doing a high volume of properties every year you will quickly run out of cash.

So I would certainly buy a house instead of rent, but make sure you are buying it with your investor's "hat" on.

Edited Jun 26 2010, 05:33

Brons Brons

Jul 22 '08, 07:30 PM

I would only buy a private house if you plan on staying there. If you plan on moving around every few years the closing costs are killing you and you'll be better of paying rent.

Edited Jun 26 2010, 05:33

Ryan Webber

Wholesaler from Amarillo, Texas

Jul 22 '08, 11:08 PM

If you are open to doing some work on a house then buying a house at a discount, fixing it up over the next couple years, and then reselling is an excellent way to get started in the investing arena.

The sale of your homestead is tax exempt, with some stipulations, so you get to keep ALL the profits. Its a great to build up a nest egg over the next several years. I know several investors who move every couple years to capitalize on this tax exemption.

Edited Jun 26 2010, 05:33

Jason Cummins

Real Estate Investor from Katy, Texas

Jul 26 '08, 09:47 AM

Also remember, rent is not throwing money away. It is paying for a place to live.

Edited Jun 26 2010, 05:34

Shari Posey

Residential Real Estate Agent from Long Beach, California

Jul 30 '08, 12:49 AM

If you plan to stay in one place at least 5 years, then I think you are foolish to rent and not buy. Depending on where you live, some cities/states have first-time buyer owner-occupied deals for downpayment money, lower interest rate, etc. Even here in SoCal you can get into a place for 20% down and it would end up being pretty close to the cost of rent. Buy a fixer and do the work yourself--most people are too lazy or scared to do that so you can get a good price on a place.

After 5 years, keep the house and rent it out so your tenant pays down the mortgage. Then buy another fixer to live in while you do the work.

I'm very conservative but this has worked for us. There are others on this board that have more aggressive strategies to accumulate properties faster with more debt.

Edited Jun 26 2010, 05:35

Heather Pelletier

from Massachusetts

Jul 30 '08, 01:26 AM

Have you considered buying a multi family? If you buy at a discount you should be able to get most of the mortgage paid by your tenants. This way you will be building equity, have place to live and gain landlording experience all in one.

Edited Jun 26 2010, 05:35

Dave P.

Real Estate Consultant

Jul 30 '08, 05:44 AM
1 vote


Regardless of which way you go, good for you. Good for you having money saved up. Good for you to be thinking about your future at an early age. Good for you for doing research before acting.

On thing not mentioned though is income. Make sure you have sufficient income (obviously) before purchasing. It is one thing to get into a deal. It is another to get into a deal that you can afford.

good luck.

Edited Jun 26 2010, 05:36

Jason Wheeler

Involved In Real Estate from Pleasant Hill, California

Oct 21 '08, 07:38 AM

Good for you being so young and realizing your potential. I agree with others in this thread that you should only buy if you can afford it and you are committed for at least 5 to 7 years.

NEVER bend over backward or spend all your monthly income on a home. If you would like to explore what you can afford I am open to a conversation with you.

Edited Jun 26 2010, 06:11

Mike K

from Florida

Oct 26 '08, 06:43 AM

im 22 and chose to buy 2 houses and rent the one i live in, Id rather put my money towards investments.

Edited Jun 26 2010, 06:13

Tim W. Donor

Inspector from Tampa, FL

Oct 26 '08, 08:54 AM

I'd be searching every post that MikeOH has made and would take his advice. He's been in the business in your state for many years and every post he has made makes solid financial sense. It is a gift to you.

Edited Jun 26 2010, 06:13 by Tim W.

Robert Mack

Real Estate Investor from Bergen County, New Jersey

Oct 27 '08, 08:50 AM

I am in a similar situation. I currently live at home, don't pay any rent or anything so I've been able to save money this past year. I would like to move out also, living away from my parents house for 4 years at college and then coming home has its pros and definitely its cons.

I'm in NJ, so finding a property which I can afford is harder than finding a nice place to rent in a good location. Also I am not totally sure where I'll be in 2,3,4,5 years, so any house I'd buy I'd have to make sure I can cash flow if I decide to move in let's say 2 years...

So kind of going with the first question, if you're not forced to move out of your current home where you don't pay any rent etc.. is it dumb to go out and rent a place...? I'm thinking it might be....
(I actually just found a great place that I can rent with 2 friends if I'd choose to; would let me sleep an extra hour in the mornings)

Edited Jun 26 2010, 06:13

Jimmy Rodriguez

Real Estate Investor from San Francisco Bay Area, California

Oct 27 '08, 12:32 PM

IMO If you can find a good deal (I mean from an investors point of view) and you plan on staying for a minimum of 3 years then you should definitely purchase. Heres an example of how to make something like this work for you. My best friend purchased his first home when he was 18 when he went away to college. Hes 21 now and since turned the place into a frat house and is now actually profiting over $1200 per month on top of his mortgage. Suprisngly, the house isn't a mess at all. In Lieu of rent, he actually has one guy who's job is to keep the house in tip top condition. It's super funny to watch cos he's running this frat house like a business. It's worth mentioning that he is also one of the most brilliant men I've ever come across.. and hes only 21. But yeah, with some creativity, you can definitely make buying a house a very profitable investment

Edited Jun 26 2010, 06:13

Karim El Sheikh

from Boca Raton, Florida

Oct 27 '08, 08:16 PM

Buying is always better. The only thing you have to remember is the costs associated with it. If your renting and something breaks you don't have to break the bank to fix cause its your landlords responsiblity. If something breaks in your house, you gonna have to come up with the cost. I would say budget yourself and see what you can and cant afford and then maybe you'll have your answer.

Edited Jun 26 2010, 06:14

Enzennio Mallozzi

Real Estate Investor from stamford, Connecticut

Oct 24 '09, 07:46 AM
1 vote

Hey, I'm 24....but 3 years ago I was in the same place. I would suggest purchasing a multi family that cash flows, the house will build equity and you can use the cash flow to build reserves.

If you want to move away from home, RENT - you can afford the lifestyle you want without the physical commitment.

Best part is... you can do both!

Edited Jun 26 2010, 10:13

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