I've been looking at this situation for a while, and I think it might be marginally better to buy a house, but let me spell out the details.
Current Income + Wife = 68k a year
My wife will be starting Grad school, and entering a 5 year program.
This means that we will definitely be in the area for 5 years. It also means that our income will drop from 68k to 42k+___ whatever she makes part time in grad school. All houses in this area cost 130+. A 2-3 Bedroom ranch with garage, in good shape, Runs around 180k. This would put mortgage payments around 1k-1200 a month, but the property tax is outrageous. The prop tax adds another 400-500 a month., and without 40k to put down on the house, that means I will probably be stuck with either PMI, or higher payments on a secondary piggyback loan. (80/20 or 80/10)
Renting a 2 bedroom apartment in the same area costs about 700-900 a month. The amount lost each month renting is about the same amount thrown away in non recoverable Property tax, and PMI. If you count interest into the equation (minus the amount saved on taxes) It starts swinging a lot towards renting instead.
Of course we can do improvements, finish the basement, etc, and that will raise the value some, and it swings it slightly in the favor of buying a house instead of renting for the next 5 years. Plus there is the added benefit of having a house to live in vs an apartment.
Current Income + Wife = 68k a year
My wife will be starting Grad school, and entering a 5 year program.
This means that we will definitely be in the area for 5 years. It also means that our income will drop from 68k to 42k+___ whatever she makes part time in grad school. All houses in this area cost 130+. A 2-3 Bedroom ranch with garage, in good shape, Runs around 180k. This would put mortgage payments around 1k-1200 a month, but the property tax is outrageous. The prop tax adds another 400-500 a month., and without 40k to put down on the house, that means I will probably be stuck with either PMI, or higher payments on a secondary piggyback loan. (80/20 or 80/10)
Renting a 2 bedroom apartment in the same area costs about 700-900 a month. The amount lost each month renting is about the same amount thrown away in non recoverable Property tax, and PMI. If you count interest into the equation (minus the amount saved on taxes) It starts swinging a lot towards renting instead.
Of course we can do improvements, finish the basement, etc, and that will raise the value some, and it swings it slightly in the favor of buying a house instead of renting for the next 5 years. Plus there is the added benefit of having a house to live in vs an apartment.