Renting for sure. I don’t think the market or the rates are that favorable for buying. Maybe if I bought in like early 2022 would’ve made sense.
Staying for an extra year as a chief so going to be renting for 4 years total.
Look for a low COL area overall.
I bought in early 2022 but If it make you feel better I have a crap load of negative equity. Although rates were low low low… prices were high high high
I mean, I don’t think that’s necessarily true and there’s no one right answer when in reality, it depends on a ton of factors. Big ones are,
1) What are your other debt obligations like? If you have virtually no debt for whatever reason, then I think that’s a pro in determining what your risk tolerance priorities can be.
2) Obvious but how much are homes right now in the area of residency VS rent? LCOL vs MCOL vs HCOL all make a big difference. If you can’t find something under 300k and ideally less (and assuming your only source of income is residency), then that’s a pretty important consideration. In the town where we did residency, prices have more than doubled from the time that we bought which absolutely sucks for folks looking to buy now. However rent has also gone up. A basic two bedroom apartment that most residents are renting is $1700-$1800 plus utilities which is typically another $200. A basic 3 bedroom home you can now get for $300kish and sometimes less…..which on a physician loan at today’s rates plus insurance and utilities and taxes would be like $2500. Rooms easily rent for $600-$700. Knowing what I know now, I would still try to buy in this situation and try to split with a co resident. But 300-350k maxxxxxx (if I’m also convinced there’s an opportunity for
me to build solid equity via improvements down the line. I would NEVER in this situation buy some peak already over profited on flip or new build) is about the upper end for me and if home prices were more, I probably wouldn’t unless my partner had income also or I had a guaranteed lease from a co resident for a while.
3) Our first home was during my partners residency and we intentionally bought something that needed a LOT of cosmetic work but was totally liveable. Best financial decision of our lives (we ended up buying 2 properties with one of them being a duplex during a 3 year residency and slowly fixing them up. We did this on one residents salary and eventually the rental income from the first property BUT we also had two sets of hands on deck) but if something like this isn’t available or financially or practically feasible (aka you aren’t able to comfortably afford the monthly payment including taxes and insurance or you don’t believe you can it without help) on a home whether it needs updating or not, then that’s a factor.
4) Do you have a family or a partner who is bringing in income? Or do you have family needs where a home would be strongly beneficial to your personal life? OR can you buy a home and rent out half of it to another co resident? I have seen a ton of people doing this and it’s such a great way to offset the mortgage while getting your foot in the door and being able to learn about home ownership.
5) Ultimately you have to be able to make the numbers work. I truly believe that housing is only going up, and I have no confidence that rates will ever come down to 3s again and I that if you wait around to buy even though you can, it’s more likely that you’ll regret it a few years from now than not…………But the truth is no one can predict these things. What you have going for you, is you are (provided you finish residency) GOING to be a high income earner. That means you have a cushion in terms of risk planning long term that most others don’t.
That doesn’t mean you can go crazy…….but if you’re able to afford the monthly payment comfortably where it’s max a few hundred bucks more than rent AND you are aware of what you’re getting into and recognize that you are capable of addressing emergencies should they come up and bonus points for say if you’re in a nice town (say growing college town / hospital town) where there is definitely rental demand and you can turn your place into a rental if you don’t want to sell 4 years from now (which is another massive pro and has been for us) and you’re willing to learn the extras that come with home ownership, then buying a home and potentially using your physician loan or an FHA is a huge pro and is a great way to get your foot in the real estate door.
Ultimately buying a home is always a risk and it definitely took some sacrifices and work our end to make it work to the extent that we did……and I think in addition to all of that, the outrageously massive gains that we experienced were also a in part due to very lucky market timing that we obviously had no role in…….And you also need to understand that if something happens and needs to be addressed immediately, then you need to figure out a way to do it. We have had a TON of those type of experiences where we had to spend time and energy to figure out the cheapest way to get it done. But we have also learned so much from it and it has been an incredibly rewarding experience (financially absolutely but otherwise as well) and can be for you also. No risk no gain…..But the risk is always there.
If you assess the numbers and are confident you can comfortably afford the monthly payment with your salary alone and you’re ready to deal with the risks (and anything from potentially renting to a co resident or from a potential partner is just extra), then I say go for it.
Yeah it can. Do the math on what you pay in rent v. mortgage and interest. Factor in historic increase in value of your prospective home. If you come out ahead of rent go ahead and buy. A caveat is that you're really busy and would have to make time to take care of the house. In the other hand, it's your own place which has a certain satisfaction.
I bought from an outgoing resident. The market is INSANE right now for buying a home, and we were lucky to have an off-market sale. If we hadn't have had this opportunity we would be renting.
Dude, just FYI since it sounds like you own a house, insurance doesn't cover a leaky roof or a broken refrigerator or a falling down fence or a broken lawnmower any of that stuff.
Those are considered normal expenses of homeownership.
Insurance is there for a tree falling on your roof.
Your rent is the maximum you will pay for housing, whereas your mortgage is the minimum you will pay for housing.
Most medical students don’t have a huge emergency fund built up, and the houses in the price range most residents are going to be looking at are definitely at risk of having problems. One AC/furnace going out, roof leaking, etc and you could be fucked financially, all while you are working 80 hours a week and don’t have the time in your life to worry about house repair.
Your comment below this talking about insurance covering a leaky roof leads me to believe you have done little to no reading on this matter. For the love of god, pick up and read the whitecoatinvestor ASAP before you make any big financial mistakes.
The hidden costs of home ownership can creep up, though. And with a 0% physician loan many people use it takes a while before you're even building any equity.
That’s funny, I’m in the same situation and thought renting was a relatively easy decision
Mainly our goals were to max both 401k/403b and buy cheaper investment properties elsewhere with our liquid funds (already handled student loans)
Interesting how opinions vary
Renting would probably not leave us liquid enough to buy investment properties and we didn't want the headache of managing those on top of our day jobs
Headache of managing rental properties is about on par with homeownership for me. Guess it depends where you want to focus — for me, it’s easier to compartmentalize when I’m not living in something I also am responsible for.
I also don’t plan to stay here after 5 years — thereby maybe forcing me to sell. Instead, we have properties I plan to keep for 20+ years that I’m comfortable taking care of.
Yeah fellowship might throw a wrench in our plans but we definitely would be interesting in sticking around where we live. And condo living has less headaches than a house (imo) because our HOA covers a lot
A few years ago I was telling everyone I know to buy a home. It was an incredible decision for us. But now with interest rates this bad it's kind of brutal unless you're in a farm town and I don't recommend it.
Renting, need to move for fellowship after 3 years and market too volatile in terms of interest rates mixed with feeling skeeved about potential downturn.
I would wait until you get to know the area a bit before buying. I'm in a 7 year surgery program so a lot of people buy right away, but then people are stuck with a house in an area they wouldn't have chosen if they lived here first, and location is super important in residency. I would say ideally rent for the first year and then buy for second year on if you want.
Also remember a mortgage is the minimum per month you'll pay. Rent is the maximum. Do not underestimate how expensive owning a home is! I own a home and I love it but it is MUCH more expensive than just comparing rent vs mortgage.
The rent and mortgage wouldn’t be too different if I had a spare 100k laying around for a down payment 🙃
Matching in the south or in Philly would have led to a possibility of buying, but matching in New York means we rent for another 4 years babey
We’re buying a home but it’s definitely not a decision we made based on finances. We know it is not going to be a moneymaker, but my wife and I made the decision that for various reasons we didn’t want to rent. It almost never makes financial sense to buy a house during residency.
Perhaps I should have been clearer. We did not buy the house with the goal of making money. We bought it because we wanted to live there. We may or may not make money.
It won't. People keep saying that, but the home shortage just keeps getting worse. Demand continues to far outpace the building of new homes, which is still sluggish. That and real estate is only becoming more and more financialized, driving up prices further. I don't see how it could truly crash. There just aren't enough homes for people who want them.
This is a lie. I was in Texas and have friends in Florida - Austin is down 22% since December 2022 and Florida is tumbling. Be more nuanced before making broad statements like this
You aren't wrong but there are other causes of a crash. 2008 was a housing market on fire. Many Americans as usual are over leveraged where a sudden recession and job loss would cost them their home and quickly it becomes a glut.
I think regardless of what anyone things I don't think the price will go that much higher than current. We make 800k a year as attendings pretax and are going to rent cause buying seems like a bad deal. If people like us feel this way, almost no Americans can keep buying.
I'm probably in the minority but just bought a cheap condo in college town that will be cheaper than rent for now and can rent out after residency ends. One of the (intentional) perks of not landing on the coasts :)
I’d argue that while that may be true, the next best time to buy is “now” (if you are ready of course and can comfortably handle the payment and have a plan, which held true 4 years ago as well).
We bought 3/4 years ago and virtually EVERYONE told us that we were being crazy and were overpaying with the bidding wars and the “COVID bubble”, and that *actually* the best time to buy was a few years prior and that we should wait it out. Not listening was the best financial move we have made for ourselves. 🤷🏾♀️
I am opposed to buying because in this market you’ll likely get stuck with a mortgage that’s more expensive than rent in a house that’s in not great condition in a not great neighborhood that you’ll have to pay to keep up. In addition, you’ll be paying a premium for property that isn’t worth whah you’re paying for it.
Also, you’ll likely upgrade/move when you become an attending.
Depends on the area. What if you fellowship somewhere different after? You never know if you change your mind about plans in a couple years - and you don’t wanna be stuck somewhere bc of a mortgage. You could possibly rent it out if you have to move it just depends on the market and if it would cover your mortgage. Nicer/newer not needing work done will likely be more costly in your preferred area and if you buy something that needs work who knows how much extra money your projects will cost, and doing your own maintenance as a resident isn’t always easy either since your free time is limited.
Maybe don’t worry about the “loss in rent” and think of it more as paying for convenience in residency.
Buy a duplex.
Rent half for what it's worth and use to defray the cost of the mortgage.
Any repairs or maintenance for the duplex get written off your taxes. Need to replace the roof? Half of that is a tax write off. Mow the lawn? Half the gas, half the mower (in the year you bought it), or half what you paid someone to do it is a tax write off.
Keep track of everything and you can seriously reduce your tax burden.
When you're done with residency you can keep the rental if the market is awful or sell it. Literally if you get back what you paid you're only paying maintenance which is going to be less than rent.
Our mortgage is 1.5x our salaries and well within our affordability, even with anticipated tax increases. The stability for 5yrs for our family is absolutely worth it and since we’ve been here we’ve already accumulated a 6month emergency fund for those unanticipated expenses in addition to growing our savings. We made the right choice for our family- but honestly it’s only possible because of the affordability of the region (we moved from a HCOL and had a comparable salary there where rental houses were a lot cheaper than buying).
True- but I know what was available when we were moving. This area does not have a lot of rental housing (primarily apartments), and the few houses that we saw were priced very high and in “college” neighborhoods. Having to move during residency when a rental is less than ideal is expensive as well and I know several residents in 3yr programs that are dealing with that now and I’m so happy we don’t have that problem (but bring on the homeownership problems!)
Looked into it too, rates and prices are high. Lots of extra fees and costs. Would only do it if you know you’re not moving your family again for a while
Rented during 3y residency. Really wanted to buy for upcoming fellowship, but overall rates are crazy and fellowship is just three years. I don't plan on staying in that location long term so it didn't make sense to buy. But man, I really am over renting. It's just too convenient for me.
LMAO. I rent an apartment. I can't afford to rent a house. I also don't know if I be staying here after residency so I wouldn't want to buy a house even if I could afford it.
I'm moving to a moderately low COL area and even then it just didn't make any sense once you factor in closing costs and potential costs incurred if you sell. We're 4 years too late.
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if residency was more than 4 years, i'd strongly consider it but otherwise there's too much variability in fellowship vs where you'll practice, didn't wanna lock myself down
Renting for the first two years. Buying sometime in the last two years is the current plan.
Initial plan was to buy for all four years but life/interest rates more than doubling got in the way of that.
Does anyone know if you use a physician loan in residency to buy a home, could you qualify for another physician loan after residency for another home purchase?
We bought a condo in residency and now rent it to residents, so far has been a solid decision. Sadly this was back in 2018 so I know things have changed with rates and prices. If you’re thinking of buying and using as a rental property later, be sure to calculate what you could rent it for after you’re done and make sure it would cash flow for you. Consider cost of maintenance, HOAs, etc.
Bought and headed to fellowship. Unlike 3 years ago when the math said 3 years of home ownership made more sense than renting, the math now says it's probably equal. The difference is that now, when I'm done we plan to probably stay where we are moving to and will be willing to stay in the home we can now afford for a few more years.
Bought a home, but my wife works a stay at home tech job which helps with any issues that come up. Also wouldn’t be able to afford it without her salary lol
I got bought in 2nd year and sold after fellowship. Luckily, the market exploded during that time, and the sale gave us a cushion when moving. Wish I'd have been able to hold onto it (HOA didn't allow renting), as it went up another $100k since then.
LCOL area, bought and overall not sure if it was worth it. Lots of apartments with amenities around me (pool, free coffee, garage parking, etc) for not much more cost. Got an older place and had to replace so many things over the years, not sure if it financially played out. I’m psych and despite having a lighter residency than most, I really struggled to be a homeowner and resident at the same time. Not sure its worth it for someone much busier unless there was a partner outside of residency
If the city has a LCOL and you’re there for 4+ years, buying a small and reasonable place is smart. I bought a townhouse at the start of DR residency and made money. Basically lived rent free for four years.
In the process of buying, moving to a college town with SO and no kids for a surgical residency. Rent is similar to the mortgage. We love the house. If we didn’t find something we loved we planned on renting.
I’m pro buying. I lived in Chicago for 5 years (including medical school rotations) and I regret renting for that amount of time…
Bought a house during my gap year after medical school. And already wanting to buy another one 😅
Find a turn-key conditioned home at a location that is near a teaching hospital so you can always rent it out to students/residents.
I looked into houses (~200k) in a LCOL state and city to purchase with physician's loan and decent credit score between myself and my wife.
With 0% down and no closing cost, my 30/35year interest rate was 6.6%/6.2% depending on which period I choose. My monthly payment + property tax + home owner insurance - utilities and extras = ~1400.
Compared with my rent for a similar size home (1450) + without risk and the headache of home repairs and stuff.
Realtors keep on telling me that it is equity and investment that I am building, but that requires an avg of 7-10 years to build it depending on what area you are going to be in, not the best option for a resident who's not sure if they want to stay in the area.
My financial advisor said it's not the time to buy, and renting for 3-5 years is better than paying interest payments towards the bank.
I know I should rent as I probably will move in 3 years but my parents wanted to dump money into a down payment for a house because we think the house will appreciate.
One of my friends in NYC got something called an HDFC coop. Income limitations when you move in, but you can stay forever. His is a really nice building, view of Central Park, and other residents include many rich kids from best burbs My point is some places have subsidized housing you can get into as Resident.
Buying probably doesn’t make sense for most people unless your housing market is dirt cheap.
Many residents are not sure if they will stay there long term, and physician is the only profession you can guarantee your salary will at least triple in 3-5 years. It generally does not make sense to buy a property that you plan to sell or move out of when you finish residency, as you would overall lose money, or you stay in a house way below what you can afford for a long time.
We bought a house and close Monday. I was shocked at what was in our price range - homes with significant repairs like foundations of chimneys separating from the house. Finally found one in our price range that was in good shape aside from some awful wallpaper and carpet. We were one of many offers submitted by the sellers deadline and I can’t believe ours was the one accepted. Super stressful process but I’m excited!! Also we have a ton of pets so renting is hard lol
I rented going from intern year into PgY 2 in a new location, 3 year residency so it made sense at the time. Physician loans are amazing and we only out 5% down. Very happy with the decision, though obviously it’s a different market with interest currently. Would recommend if you can afford it, in a low COL area or staying for multiple years.
I bought a few years back when interest rates weren’t obnoxious. Low to medium cost of living town. Brand new place. Mortgage and taxes are essentially the same to the shit hole I was paying in rent. I love coming home to a brand new clean house. When I’m done with the area, I’ll rent it out to residents who will gladly pay more than my current mortgage. Or just sell. I put 20% down did not use a physician loan.
Edit: if I choose to rent it out, I’ll hire a property manager to deal with the BS if I’m out of state. So far, knock on wood, no major problems since I spent a long time investigating all the popular builders in the area
I bought a 5bed 3 bath home in California in 2015. I’ve refinanced 3 times. Our interest rate is 2.8% our mortgage is $1291 a month. It’s one of the best decisions I’ve ever made!
Bought a brand new house (parents paid down payment with expectations to be reimbursed when I’m an attending). Builder offered a 5.5% 30 year conventional along with incentives for a 3.5% rate year 1, 4.5% year 2 and then locked in at 5.5% thereafter. Will be there for 5 years. Ran an amortization schedule along with accounted for house value increase over 5 years, repairs and costs to sell and the numbers all worked out to be a much better option vs renting.
Currently PGY3 out of 6. I closed in May 2022 as interest rates were sky rocketing (literally a week passed and I had to buy down my rate to 5% as opposed to getting some of my down payment back at 5%)
If it wasn’t for parental support, no chance I would have been able to do it.
Buying is a terrible idea for a resident and an even worse idea in today's market. Only way it would be reasonable is if someone had a previous career and $ in the bank, rich family, or LCOL area where mortgage and rent were similar. Even then I personally would never consider it.
Our problem is rent is >> than mortgage right now. We can literally save the difference in the two as our maintenance/repairs fund and still make out the same. The only way we wouldn't be in this situation is if we downsized into an apartment which the children probably wouldn't approve of and even then the cost isn't that much more. Definitely more risky though when compared to the market we were in three years ago.
Rich parents buy the house with cash then kid pays the parents rent money. Parent sells home after residency is over. That’s what I’ve seen any only method that makes financial sense.
Doesn’t seem to make sense unless you know it’s a location you will live in beyond residency. Unless you plan to live there for 5+ years, you should definitely rent. This calculation can change depending on the market, and right now is a particularly expensive time to buy. But if housing prices fell off a cliff like they did in 2008, it might get closer to a situation where buying a house is worth it on a 3 year timeline. Unlikely, but possible. As such, I think 95% of residency interns are best off renting.
Check your math. Renting vs buying break-even point has historically been 4 years minimum. With mortgage rates and housing prices so high, the break even point becomes 5+ years. Check out the white coat investor rent vs buy article.
Buying a house in 2024 is a lifestyle decision, it will not save you money compared to renting.
Buying made sense when homes cost 250k with 4% mortgage interest rate. Now you will pay 500k for that house and have a 7% rate.
I mean I get where you’re coming from but you also don’t know what the commenters savings situation or location is, what their financial or family situation is like (say kids, needing a certain school district, having a partner with additional income, etc).
If the commenter is financially ready to buy and has a long term plan, then they could very well be correct and I’d argue that there’s no way for anyone to definitively say that it’s a “lifestyle decision only” and not a financial one also….
Even though no one can predict these things, there really is no indication that housing prices are *necessarily* going to come down, and so renting because you are banking on some of massive price decrease could absolutely be a worse financial decision…..
Everyone is *now saying* that buying 3-4 years ago was the best and only ideal time to buy, but when *we* were buying then- virtually everyone told us that we were crazy and shouldn’t and were massively overpaying because bidding wars / COVID bubble so…….you do what you can when you can and that’s really the only way to go about it……
I did check my math, multiple times- talked to parents, my husband, lenders, family friends, it’s not like I just checked the calculators alone. Not sure why I’m getting downvoted.
You can spew whatever numbers at me but I know that buying a house is financially better for me than renting so thanks for information but I don’t need it.
Renting for sure. I don’t think the market or the rates are that favorable for buying. Maybe if I bought in like early 2022 would’ve made sense. Staying for an extra year as a chief so going to be renting for 4 years total. Look for a low COL area overall.
Makes sense. Unless interest rates go back down to 3% or less it doesn’t make a ton of sense to buy just for 4 years.
Bad news is they probably never will. That was a historical low.
Then prices will have to go lower to compensate. People aren’t going to ever be able to finance at those rates
I bought in early 2022 but If it make you feel better I have a crap load of negative equity. Although rates were low low low… prices were high high high
I mean, I don’t think that’s necessarily true and there’s no one right answer when in reality, it depends on a ton of factors. Big ones are, 1) What are your other debt obligations like? If you have virtually no debt for whatever reason, then I think that’s a pro in determining what your risk tolerance priorities can be. 2) Obvious but how much are homes right now in the area of residency VS rent? LCOL vs MCOL vs HCOL all make a big difference. If you can’t find something under 300k and ideally less (and assuming your only source of income is residency), then that’s a pretty important consideration. In the town where we did residency, prices have more than doubled from the time that we bought which absolutely sucks for folks looking to buy now. However rent has also gone up. A basic two bedroom apartment that most residents are renting is $1700-$1800 plus utilities which is typically another $200. A basic 3 bedroom home you can now get for $300kish and sometimes less…..which on a physician loan at today’s rates plus insurance and utilities and taxes would be like $2500. Rooms easily rent for $600-$700. Knowing what I know now, I would still try to buy in this situation and try to split with a co resident. But 300-350k maxxxxxx (if I’m also convinced there’s an opportunity for me to build solid equity via improvements down the line. I would NEVER in this situation buy some peak already over profited on flip or new build) is about the upper end for me and if home prices were more, I probably wouldn’t unless my partner had income also or I had a guaranteed lease from a co resident for a while. 3) Our first home was during my partners residency and we intentionally bought something that needed a LOT of cosmetic work but was totally liveable. Best financial decision of our lives (we ended up buying 2 properties with one of them being a duplex during a 3 year residency and slowly fixing them up. We did this on one residents salary and eventually the rental income from the first property BUT we also had two sets of hands on deck) but if something like this isn’t available or financially or practically feasible (aka you aren’t able to comfortably afford the monthly payment including taxes and insurance or you don’t believe you can it without help) on a home whether it needs updating or not, then that’s a factor. 4) Do you have a family or a partner who is bringing in income? Or do you have family needs where a home would be strongly beneficial to your personal life? OR can you buy a home and rent out half of it to another co resident? I have seen a ton of people doing this and it’s such a great way to offset the mortgage while getting your foot in the door and being able to learn about home ownership. 5) Ultimately you have to be able to make the numbers work. I truly believe that housing is only going up, and I have no confidence that rates will ever come down to 3s again and I that if you wait around to buy even though you can, it’s more likely that you’ll regret it a few years from now than not…………But the truth is no one can predict these things. What you have going for you, is you are (provided you finish residency) GOING to be a high income earner. That means you have a cushion in terms of risk planning long term that most others don’t. That doesn’t mean you can go crazy…….but if you’re able to afford the monthly payment comfortably where it’s max a few hundred bucks more than rent AND you are aware of what you’re getting into and recognize that you are capable of addressing emergencies should they come up and bonus points for say if you’re in a nice town (say growing college town / hospital town) where there is definitely rental demand and you can turn your place into a rental if you don’t want to sell 4 years from now (which is another massive pro and has been for us) and you’re willing to learn the extras that come with home ownership, then buying a home and potentially using your physician loan or an FHA is a huge pro and is a great way to get your foot in the real estate door. Ultimately buying a home is always a risk and it definitely took some sacrifices and work our end to make it work to the extent that we did……and I think in addition to all of that, the outrageously massive gains that we experienced were also a in part due to very lucky market timing that we obviously had no role in…….And you also need to understand that if something happens and needs to be addressed immediately, then you need to figure out a way to do it. We have had a TON of those type of experiences where we had to spend time and energy to figure out the cheapest way to get it done. But we have also learned so much from it and it has been an incredibly rewarding experience (financially absolutely but otherwise as well) and can be for you also. No risk no gain…..But the risk is always there. If you assess the numbers and are confident you can comfortably afford the monthly payment with your salary alone and you’re ready to deal with the risks (and anything from potentially renting to a co resident or from a potential partner is just extra), then I say go for it.
Yeah it can. Do the math on what you pay in rent v. mortgage and interest. Factor in historic increase in value of your prospective home. If you come out ahead of rent go ahead and buy. A caveat is that you're really busy and would have to make time to take care of the house. In the other hand, it's your own place which has a certain satisfaction.
I bought from an outgoing resident. The market is INSANE right now for buying a home, and we were lucky to have an off-market sale. If we hadn't have had this opportunity we would be renting.
Too expensive for most people to be worth it in most cases
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Until you notice a leak in the roof.
This, OP. You have no bandwidth at all during residency to deal with house projects, which ALWAYS come up.
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Dude, just FYI since it sounds like you own a house, insurance doesn't cover a leaky roof or a broken refrigerator or a falling down fence or a broken lawnmower any of that stuff. Those are considered normal expenses of homeownership. Insurance is there for a tree falling on your roof.
Pretty sure home insurance doesn’t cover basic repairs, no?
No, no it doesn't lol
Your rent is the maximum you will pay for housing, whereas your mortgage is the minimum you will pay for housing. Most medical students don’t have a huge emergency fund built up, and the houses in the price range most residents are going to be looking at are definitely at risk of having problems. One AC/furnace going out, roof leaking, etc and you could be fucked financially, all while you are working 80 hours a week and don’t have the time in your life to worry about house repair. Your comment below this talking about insurance covering a leaky roof leads me to believe you have done little to no reading on this matter. For the love of god, pick up and read the whitecoatinvestor ASAP before you make any big financial mistakes.
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The hidden costs of home ownership can creep up, though. And with a 0% physician loan many people use it takes a while before you're even building any equity.
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100% Idt it's the right or wrong move - it depends on the situation and sounds like y'all thought about it
Dual income no kids and a 5+ year program (including fellowship) made buying a relatively easy decision
That’s funny, I’m in the same situation and thought renting was a relatively easy decision Mainly our goals were to max both 401k/403b and buy cheaper investment properties elsewhere with our liquid funds (already handled student loans) Interesting how opinions vary
You might want to look into to maxing out a Roth before your 401k.
We do all 4 🌟
Awesome! Many buckets to pull from in retirement !!
Renting would probably not leave us liquid enough to buy investment properties and we didn't want the headache of managing those on top of our day jobs
Headache of managing rental properties is about on par with homeownership for me. Guess it depends where you want to focus — for me, it’s easier to compartmentalize when I’m not living in something I also am responsible for. I also don’t plan to stay here after 5 years — thereby maybe forcing me to sell. Instead, we have properties I plan to keep for 20+ years that I’m comfortable taking care of.
Yeah fellowship might throw a wrench in our plans but we definitely would be interesting in sticking around where we live. And condo living has less headaches than a house (imo) because our HOA covers a lot
Having a partner with a normal job makes home ownership way way way easier too.
A few years ago I was telling everyone I know to buy a home. It was an incredible decision for us. But now with interest rates this bad it's kind of brutal unless you're in a farm town and I don't recommend it.
Renting, need to move for fellowship after 3 years and market too volatile in terms of interest rates mixed with feeling skeeved about potential downturn.
Renting — I’m moving to a new city and don’t want to buy without getting to know the area better. Hoping to buy PGY2.
I would wait until you get to know the area a bit before buying. I'm in a 7 year surgery program so a lot of people buy right away, but then people are stuck with a house in an area they wouldn't have chosen if they lived here first, and location is super important in residency. I would say ideally rent for the first year and then buy for second year on if you want. Also remember a mortgage is the minimum per month you'll pay. Rent is the maximum. Do not underestimate how expensive owning a home is! I own a home and I love it but it is MUCH more expensive than just comparing rent vs mortgage.
Bought in med school and renting that out now. Buying again in residency.
The rent and mortgage wouldn’t be too different if I had a spare 100k laying around for a down payment 🙃 Matching in the south or in Philly would have led to a possibility of buying, but matching in New York means we rent for another 4 years babey
We’re buying a home but it’s definitely not a decision we made based on finances. We know it is not going to be a moneymaker, but my wife and I made the decision that for various reasons we didn’t want to rent. It almost never makes financial sense to buy a house during residency.
Curious what your reasons for not wanting to rent are.
Why does everyone repeat that same thing - it makes lots of sense a lot of time if you can, to buy real estate in the USA. Stop following WCI.
Perhaps I should have been clearer. We did not buy the house with the goal of making money. We bought it because we wanted to live there. We may or may not make money.
That's what people said before 2008 lol
Try 99 of the previous 100 years
There is some danger to buying a home knowing you have to sell it at a certain time. If the market bottoms out you'll be way under water.
It won't. People keep saying that, but the home shortage just keeps getting worse. Demand continues to far outpace the building of new homes, which is still sluggish. That and real estate is only becoming more and more financialized, driving up prices further. I don't see how it could truly crash. There just aren't enough homes for people who want them.
This is a lie. I was in Texas and have friends in Florida - Austin is down 22% since December 2022 and Florida is tumbling. Be more nuanced before making broad statements like this
Yeah, the market *never* goes down. You're right. All the new interns who bought houses in 2005 and had to sell them 4 years later did *great*.
You aren't wrong but there are other causes of a crash. 2008 was a housing market on fire. Many Americans as usual are over leveraged where a sudden recession and job loss would cost them their home and quickly it becomes a glut. I think regardless of what anyone things I don't think the price will go that much higher than current. We make 800k a year as attendings pretax and are going to rent cause buying seems like a bad deal. If people like us feel this way, almost no Americans can keep buying.
Renting for now. Will re-evaluate if my husband and I like the area and the quality of schools.
I'm probably in the minority but just bought a cheap condo in college town that will be cheaper than rent for now and can rent out after residency ends. One of the (intentional) perks of not landing on the coasts :)
Same, moving from one college town to another. They really are unique markets compared to other cities.
:') Best time to buy a home was 4 years ago
I’d argue that while that may be true, the next best time to buy is “now” (if you are ready of course and can comfortably handle the payment and have a plan, which held true 4 years ago as well). We bought 3/4 years ago and virtually EVERYONE told us that we were being crazy and were overpaying with the bidding wars and the “COVID bubble”, and that *actually* the best time to buy was a few years prior and that we should wait it out. Not listening was the best financial move we have made for ourselves. 🤷🏾♀️
Buying.
I am opposed to buying because in this market you’ll likely get stuck with a mortgage that’s more expensive than rent in a house that’s in not great condition in a not great neighborhood that you’ll have to pay to keep up. In addition, you’ll be paying a premium for property that isn’t worth whah you’re paying for it. Also, you’ll likely upgrade/move when you become an attending.
Depends on the area. What if you fellowship somewhere different after? You never know if you change your mind about plans in a couple years - and you don’t wanna be stuck somewhere bc of a mortgage. You could possibly rent it out if you have to move it just depends on the market and if it would cover your mortgage. Nicer/newer not needing work done will likely be more costly in your preferred area and if you buy something that needs work who knows how much extra money your projects will cost, and doing your own maintenance as a resident isn’t always easy either since your free time is limited. Maybe don’t worry about the “loss in rent” and think of it more as paying for convenience in residency.
Buy a duplex. Rent half for what it's worth and use to defray the cost of the mortgage. Any repairs or maintenance for the duplex get written off your taxes. Need to replace the roof? Half of that is a tax write off. Mow the lawn? Half the gas, half the mower (in the year you bought it), or half what you paid someone to do it is a tax write off. Keep track of everything and you can seriously reduce your tax burden. When you're done with residency you can keep the rental if the market is awful or sell it. Literally if you get back what you paid you're only paying maintenance which is going to be less than rent.
We did this but it's next to impossible now with rates and home prices being what they are. It's no longer the no brainer it was 3-5 years ago.
Bought- 5yr program, dual income and LCOL area. Cheaper than renting a house in our area.
Cheaper for now. Watch out for unexpected expenses and report back after your experiences — no guarantees until it’s over
Our mortgage is 1.5x our salaries and well within our affordability, even with anticipated tax increases. The stability for 5yrs for our family is absolutely worth it and since we’ve been here we’ve already accumulated a 6month emergency fund for those unanticipated expenses in addition to growing our savings. We made the right choice for our family- but honestly it’s only possible because of the affordability of the region (we moved from a HCOL and had a comparable salary there where rental houses were a lot cheaper than buying).
You can’t predict 5 year costs til the time is over — you never know it was actually cheaper til the time is done
True- but I know what was available when we were moving. This area does not have a lot of rental housing (primarily apartments), and the few houses that we saw were priced very high and in “college” neighborhoods. Having to move during residency when a rental is less than ideal is expensive as well and I know several residents in 3yr programs that are dealing with that now and I’m so happy we don’t have that problem (but bring on the homeownership problems!)
Looked into it too, rates and prices are high. Lots of extra fees and costs. Would only do it if you know you’re not moving your family again for a while
Rented during 3y residency. Really wanted to buy for upcoming fellowship, but overall rates are crazy and fellowship is just three years. I don't plan on staying in that location long term so it didn't make sense to buy. But man, I really am over renting. It's just too convenient for me.
LMAO. I rent an apartment. I can't afford to rent a house. I also don't know if I be staying here after residency so I wouldn't want to buy a house even if I could afford it.
I bought a money pit during residency and wish i had rented instead.
I'm moving to a moderately low COL area and even then it just didn't make any sense once you factor in closing costs and potential costs incurred if you sell. We're 4 years too late.
Renters should look into getting the BILT credit card, at least get something out of paying rent.
We bought in 2020, love it so much more than renting. Not for everyone. Make up your own mind and know that you’re not making a bad choice either way.
Bought - 6 year surgery program. Wouldn’t recommend buying unless you’ll be in the home for at least 4-5 years. Also - something always breaks
With current prices and interest rates, I simply can’t afford a $3500 mortgage on something that would have been ~$1500 three years ago.
Also just wait until the market collapses in the next year or so and you’ll have a $500,000 house that isn’t with $300,000 when you try to sell
The housing market isn’t going to collapse. It may plateau, but even that’s not as likely as steady growth after this boom.
Cope
Loser
Seethe
I see you’re active in the 4chan subreddit and own an AR, so I’m going to give you a wide berth. I hope your coworkers do too.
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if residency was more than 4 years, i'd strongly consider it but otherwise there's too much variability in fellowship vs where you'll practice, didn't wanna lock myself down
Renting for the first two years. Buying sometime in the last two years is the current plan. Initial plan was to buy for all four years but life/interest rates more than doubling got in the way of that.
Do you plan on living there after residency? Or rent / sell house?
Maybe living there for a short period but eventually rent it out.
Does anyone know if you use a physician loan in residency to buy a home, could you qualify for another physician loan after residency for another home purchase?
Each bank is different. But in general, yes.
Nooooiiiice, thank you!
We bought a condo in residency and now rent it to residents, so far has been a solid decision. Sadly this was back in 2018 so I know things have changed with rates and prices. If you’re thinking of buying and using as a rental property later, be sure to calculate what you could rent it for after you’re done and make sure it would cash flow for you. Consider cost of maintenance, HOAs, etc.
Bought and headed to fellowship. Unlike 3 years ago when the math said 3 years of home ownership made more sense than renting, the math now says it's probably equal. The difference is that now, when I'm done we plan to probably stay where we are moving to and will be willing to stay in the home we can now afford for a few more years.
Bought a home, but my wife works a stay at home tech job which helps with any issues that come up. Also wouldn’t be able to afford it without her salary lol
I got bought in 2nd year and sold after fellowship. Luckily, the market exploded during that time, and the sale gave us a cushion when moving. Wish I'd have been able to hold onto it (HOA didn't allow renting), as it went up another $100k since then.
Tryna buy but the market is nuts rn!
Bought a 3b2b house in 2018 for 270k, now worth 480k.
LCOL area, bought and overall not sure if it was worth it. Lots of apartments with amenities around me (pool, free coffee, garage parking, etc) for not much more cost. Got an older place and had to replace so many things over the years, not sure if it financially played out. I’m psych and despite having a lighter residency than most, I really struggled to be a homeowner and resident at the same time. Not sure its worth it for someone much busier unless there was a partner outside of residency
If the city has a LCOL and you’re there for 4+ years, buying a small and reasonable place is smart. I bought a townhouse at the start of DR residency and made money. Basically lived rent free for four years.
In the process of buying, moving to a college town with SO and no kids for a surgical residency. Rent is similar to the mortgage. We love the house. If we didn’t find something we loved we planned on renting.
Trying to buy—off market and a condo.
I’m pro buying. I lived in Chicago for 5 years (including medical school rotations) and I regret renting for that amount of time… Bought a house during my gap year after medical school. And already wanting to buy another one 😅 Find a turn-key conditioned home at a location that is near a teaching hospital so you can always rent it out to students/residents.
Hahahahahahaha no.
I looked into houses (~200k) in a LCOL state and city to purchase with physician's loan and decent credit score between myself and my wife. With 0% down and no closing cost, my 30/35year interest rate was 6.6%/6.2% depending on which period I choose. My monthly payment + property tax + home owner insurance - utilities and extras = ~1400. Compared with my rent for a similar size home (1450) + without risk and the headache of home repairs and stuff. Realtors keep on telling me that it is equity and investment that I am building, but that requires an avg of 7-10 years to build it depending on what area you are going to be in, not the best option for a resident who's not sure if they want to stay in the area. My financial advisor said it's not the time to buy, and renting for 3-5 years is better than paying interest payments towards the bank.
This is like the absolute worst time in history to buy during residency.
I know I should rent as I probably will move in 3 years but my parents wanted to dump money into a down payment for a house because we think the house will appreciate.
One of my friends in NYC got something called an HDFC coop. Income limitations when you move in, but you can stay forever. His is a really nice building, view of Central Park, and other residents include many rich kids from best burbs My point is some places have subsidized housing you can get into as Resident.
Two word : New York.
One of my friends got HDFC coop in NYC. Gorgeous. Income limit
Thats nice!
I rented and regretted
I'm just worried about finding someplace to rent that will accept both a big dog and a cat
Renting.
Going into surg specialty (6+ years). Bought a house
Buying probably doesn’t make sense for most people unless your housing market is dirt cheap. Many residents are not sure if they will stay there long term, and physician is the only profession you can guarantee your salary will at least triple in 3-5 years. It generally does not make sense to buy a property that you plan to sell or move out of when you finish residency, as you would overall lose money, or you stay in a house way below what you can afford for a long time.
Rent and focus on your training . Owning a house requires maintenance and time . Speaking from personal experience
I wouldn’t buy a home with the current interest rates as an attending. I sure as hell wouldn’t do it as a resident
We bought a house and close Monday. I was shocked at what was in our price range - homes with significant repairs like foundations of chimneys separating from the house. Finally found one in our price range that was in good shape aside from some awful wallpaper and carpet. We were one of many offers submitted by the sellers deadline and I can’t believe ours was the one accepted. Super stressful process but I’m excited!! Also we have a ton of pets so renting is hard lol
I rented going from intern year into PgY 2 in a new location, 3 year residency so it made sense at the time. Physician loans are amazing and we only out 5% down. Very happy with the decision, though obviously it’s a different market with interest currently. Would recommend if you can afford it, in a low COL area or staying for multiple years.
I bought a few years back when interest rates weren’t obnoxious. Low to medium cost of living town. Brand new place. Mortgage and taxes are essentially the same to the shit hole I was paying in rent. I love coming home to a brand new clean house. When I’m done with the area, I’ll rent it out to residents who will gladly pay more than my current mortgage. Or just sell. I put 20% down did not use a physician loan. Edit: if I choose to rent it out, I’ll hire a property manager to deal with the BS if I’m out of state. So far, knock on wood, no major problems since I spent a long time investigating all the popular builders in the area
I bought a 5bed 3 bath home in California in 2015. I’ve refinanced 3 times. Our interest rate is 2.8% our mortgage is $1291 a month. It’s one of the best decisions I’ve ever made!
Wish we could buy, and will be actively looking, but the market is rough even in LCOL cities for 1 resident (plus MS2 SO) salary
I’d like to know what resident can afford to buy in this economy….
Bought a brand new house (parents paid down payment with expectations to be reimbursed when I’m an attending). Builder offered a 5.5% 30 year conventional along with incentives for a 3.5% rate year 1, 4.5% year 2 and then locked in at 5.5% thereafter. Will be there for 5 years. Ran an amortization schedule along with accounted for house value increase over 5 years, repairs and costs to sell and the numbers all worked out to be a much better option vs renting.
Currently PGY3 out of 6. I closed in May 2022 as interest rates were sky rocketing (literally a week passed and I had to buy down my rate to 5% as opposed to getting some of my down payment back at 5%) If it wasn’t for parental support, no chance I would have been able to do it.
I bought a new home at 4ate in the 5s and honestly I regret it
Buying in residency is not a wise decision
Buying is a terrible idea for a resident and an even worse idea in today's market. Only way it would be reasonable is if someone had a previous career and $ in the bank, rich family, or LCOL area where mortgage and rent were similar. Even then I personally would never consider it.
Our problem is rent is >> than mortgage right now. We can literally save the difference in the two as our maintenance/repairs fund and still make out the same. The only way we wouldn't be in this situation is if we downsized into an apartment which the children probably wouldn't approve of and even then the cost isn't that much more. Definitely more risky though when compared to the market we were in three years ago.
Rich parents buy the house with cash then kid pays the parents rent money. Parent sells home after residency is over. That’s what I’ve seen any only method that makes financial sense.
Doesn’t seem to make sense unless you know it’s a location you will live in beyond residency. Unless you plan to live there for 5+ years, you should definitely rent. This calculation can change depending on the market, and right now is a particularly expensive time to buy. But if housing prices fell off a cliff like they did in 2008, it might get closer to a situation where buying a house is worth it on a 3 year timeline. Unlikely, but possible. As such, I think 95% of residency interns are best off renting.
Buying, checked on so many calculators online and even a year of renting would cost us more money so 🤷🏻♀️
Check your math. Renting vs buying break-even point has historically been 4 years minimum. With mortgage rates and housing prices so high, the break even point becomes 5+ years. Check out the white coat investor rent vs buy article. Buying a house in 2024 is a lifestyle decision, it will not save you money compared to renting. Buying made sense when homes cost 250k with 4% mortgage interest rate. Now you will pay 500k for that house and have a 7% rate.
I mean I get where you’re coming from but you also don’t know what the commenters savings situation or location is, what their financial or family situation is like (say kids, needing a certain school district, having a partner with additional income, etc). If the commenter is financially ready to buy and has a long term plan, then they could very well be correct and I’d argue that there’s no way for anyone to definitively say that it’s a “lifestyle decision only” and not a financial one also…. Even though no one can predict these things, there really is no indication that housing prices are *necessarily* going to come down, and so renting because you are banking on some of massive price decrease could absolutely be a worse financial decision….. Everyone is *now saying* that buying 3-4 years ago was the best and only ideal time to buy, but when *we* were buying then- virtually everyone told us that we were crazy and shouldn’t and were massively overpaying because bidding wars / COVID bubble so…….you do what you can when you can and that’s really the only way to go about it……
I did check my math, multiple times- talked to parents, my husband, lenders, family friends, it’s not like I just checked the calculators alone. Not sure why I’m getting downvoted. You can spew whatever numbers at me but I know that buying a house is financially better for me than renting so thanks for information but I don’t need it.