Buy or Rent?... right out of college.?

I will be graduating next May with a B.S. in Electrical Engineering. The average entry level salary is $51,000. I am planning on living in one of four cities (Atlanta, Columbia SC, Greensboro NC, Knoxville TN).

Should I buy a condo/townhouse for around $120,000 as soon as possible with a small downpayment or wait a few years?

8 Answers

  • 1 decade ago
    Favorite Answer

    First, just because the national average is $51k, don't assume that's what you'll be making in those areas. You should check out what the local cost of living is compared to the national average, and take into consideration how that can affect your salary. When I graduated, the national average for a computer engineer, was about $40k, but in Michigan where the cost of living was lower, I only got a job offer for $35k. Meanwhile, in California, I was offered almost $50k - quite a large difference.

    Second, I would worry more about paying off any student loans you may have, first. This will really boost your credit rating which is very important when buying a house. You should also work on building up your savings to act as an emergency fund should something happen - such as losing your job unexpectedly.

    I can't speak for the real estate markets in those areas - I'm living near San Francisco, CA, where the normal rules don't apply... Even the copy of "Home buying for dummies" I read had a special footnote that basically said "if you live in California, disregard chapter 3..."

    Realize that owning a home is more than simply being able to pay the mortgage every month. There's property taxes, utilities, insurance (both house, medical and life - some places won't give you a mortgage without all 3), upkeep, and association fees (if you live in a condo/townhouse)

    I would recommend you read about the ins and outs of buying a house and dealing with a mortgage. Then wait until you get settled into your first job before deciding if you want to buy a house or not. Be sure to investigate the area's market.

    If you know you're going to be around in the area for a number of years, and if you can swing the payments comfortably, then it may make sense to buy - after all, you could always rent it out if you moved.

  • 1 decade ago

    It depends on how long you plan to stay at your job/city your living in and how much rent is in that particular city.

    If rent is $500 dollars and your mortgage plus house related expense is about $1500 (remember you have to pay taxes, insurance, and upkeep of the house). You have to ask yourself if it is a wise investment to pay $1000 more for a house.

    Furthermore, that could change depending on the city you're living in. Housing in Atlanta may be more desirable than Knoxville so pricing may go up in 3 years time so it may offset the $1000 you have to pay extra for that condo.

    I would suggest you do a little more research or at least for the time being rent until you secure a job in a company. Buying and selling properties because of relocation of job can be costly and bothersome.

  • 1 decade ago

    I would recommend renting for a while and saving up. Enjoy the no maintenance lifestyle for a while more. Spend some time getting your credit as high as possible.

    On a side note, you should look at the Triangle as an option. There is affordable housing in Raleigh, Durham, Cary and a number of other areas nearby. The Research Triangle Park is a good source of engineering jobs as well, with IBM's largest development location among other things.

    Whatever you decide, good luck!

  • 1 decade ago

    as long as you can afford it always try to buy a home. The things you must consider are:

    Can i afford it?

    Do I have the time to own a house(mowing, fixing things)?

    With owning you get tax money back and you get to start building equity right away which is always better than throwing mooney away renting. But if you cant manage the two instances above, you should rent 1st. Good Luck!

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  • Anonymous
    1 decade ago

    I'd say extablish your job first of course, and then invest in a home. Condos and Townhomes are more of a low maintenance and they're good beginner properties. Make sure you buy at least a 2 bedroom, the resale or rental value is higher on those.

    good luck

  • zocko
    Lv 5
    1 decade ago

    don't do anything till you've lived there about a year. You'll find new neighborhoods and see if you like where your at.

  • Anonymous
    1 decade ago

    If its in an area where you can rent it for income, then yes. Otherwise, rent and don't limit your options.

  • 1 decade ago

    Buy. Rent will not build your equity.

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