Likely to Move 1,000+ Miles Away. Rent Until Housing Market Cools Off?

Congrats! Provided it's an upward move, of course.

A friend offered this advice when we were buying last year: Consider price, location and amenities — and you'll almost always have to sacrifice one. Given the market I feel like we had to compromise on each one, but we still did OK despite the market insanity.

I'm envious of you. You'll have an empty nest in a year or two and I don't think you're much older than I am. I finally met someone who can tolerate me for more than 30 seconds and we're finally looking into the kids thing. I'm sure I'm going to be cursing out all the young parents in a couple years.

 

I've been thinking about similar situations and decisions a lot and trying to figure out what to do lately. And I still don't know. It really is big.

Maumann is right, I think, in that it's really all about location. If you're going to buy, you need to be really sure that's what you want to do if it involves a big move. Unless, of course, you've got so much money that you can buy something for yourself, and still get something else that would be strictly "an investment property." (Boy, wouldn't that be nice).

I just returned from a trip I took to Idaho, and I took the time to look around at housing and properties/prices, etc. I found a new-build housing option that is, frankly, just about my dream home. Modest, but for me, almost perfect and what I'd like if I could get exactly what I wanted. If I'd had my condo already sold and money freed up and immediately available, I might have put in a down-payment right then and there.

But, alas, I'm not quite in that position yet, and, upon thinking about it, I still may or may not put myself in that position, despite having found what I think would be a perfect house for my liking. That's because I'm just not entirely sure that Idaho is where I'd like to end up for any length of time. I liked it, and I actually have a few family members (a brother and a niece and her family) who live there. But I'm not totally sure that's where I want to be, and that fact holds me back, even though I'm giving serious thought to selling my current place, just to try to get the money out of it.

Generally speaking, I would say that if you're going to stay anywhere for at least three years, I would buy rather than rent. Any less time than that, I'd say you should probably rent, and look to do so cheaply, downsizing and shopping around to do so.

 

Assuming normal price appreciation- like about five per cent a year- it generally takes two years of so to recover transaction costs of buying. It does not make a lot of sense to buy a property for 18 months. Realtor fees about four percent and the the other costs of selling. Also, properties in good school districts sell at a premium. Another item to check is the difference in the rental prices versus your payment (remember to factor in maintenance). What is the difference for the two years you will be there?

My guess, assuming modest appreciation, is to rent. I would rent in a good school district, paying a premium if necessary, for the sake of your daughter while scoping out where you want to live sans children at home.

The risk in doing this is that prices continue to appreciate a lot more than five per cent. A lot of that would depend on the market and what population growth is.

 

Rent

Give the cash to a financial advisor. No idea how old you are, but that cash should be earning you tens of thousands a year if invested correctly and could open up financial doors you never knew existed.

 

This may sound dumb, but it is something I've wondered: How do you go about finding/getting a good financial advisor? What is one, and how do you judge one, if you've heretofore done nothing beyond build your usual traditional savings and/or tried to utilize your 401k as much as possible?

 

The big discount investment houses -- Schwab, Fidelity, Vanguard -- provide varying levels of investment counseling if you want it. Their services are cheap, and it's as good as any you'll find anywhere at the "individual investor" level. Frankly, many investment advisers make their job seem a lot more complicated than it actually is. Otherwise, how could they justify collecting $1000 of every $100,000 invested -- every year?

 

Fidelity is good at what it does.

 

Family friend, great lady, trust her totally manages our retirement from her Edward Jones office.

 

Yeah, we have been with multiple Edward Jones advisors over a span of 30 years. Very pleased with them, particularly compared to Schwab.

 

I gave one EJ adviser a few bucks to invest -- he put them into Puerto Rico bonds. Nice yield, but... Fortunately I dumped them before they crashed and burned.