How long should you live in a property before selling?

magpie1127

We haven't bought a home yet, but we're young and realistically expect that well be buying a starter home (not a forever home). How long is a good amount of time to expect to live in a home before you sell it? Is 4-5 years worth the closing costs/taxes, or is it smarter to rent?

I don't necessarily need advice on my specific situation, I was just wondering what everyone's thoughts were.  

earlsgirl11

DH and I rented until we could afford a forever home. The market here is not very good. We were afraid to get stuck in a house too small for us when we start a family. It depends on your market though. Generally, 5 years would be cutting it close to be breaking even on your house. Hope this helps!

kelz21s1

My husband and I just bought our starter home and we have been told by numerous people to stay in our home for 3 to 5 years. Any thing less then 3 years is not worth it. We were renting and felt it was a waste of money at least with a house you can have an investment. We love our home good luck!

Santorini2011

That's a hard question b/c it depends so much on the house.  I have seen people get great deals that they sold in 2 years (& less) and made a nice profit.  For the average valued home, I think it is 5 years though. 

I would look at which houses you could get for around the same as your rental payment.  Do you like them? Are they realistic for you guys? Is the housing market heading upwards or has it leveled out?  If you can get a mortgage for $100-200 less than your rent (allowing for taxes, ins, utilities) and it is a decent enough value to at least break even in a couple years, I'd say go for it.

Summer2011Bride

It's so different depending on the house and your area. We are buying what we consider our starter home (hoping to be able to buy newer construction in the future!) and plan to stay here for at least 5-7 years. We definitely want to do some renovations/upgrades that will hopefully pay off when we sell it as well.

ungraceful13

We rented until we could afford our forever home. It was worth it for us. The houses we could afford just a year or 2 later were so much nicer than the first houses we looked at.

Summer2011Bride

I will say, too, that a big part of why we don't think of this as our "forever" home is that we don't think of this city as our "forever" city. For now, we both have good, steady jobs and a life here that we enjoy. However, we're both in agreement that we don't want to live in the same state forever, so down the line, we'd like to move to another city. Because we could afford a home and didn't want to keep wasting money renting, we went ahead and bought until that time comes.

Sisugal

In the housing market of today it is recommended to stay in your home at least 7 years, some say 7-10, in order to break even when selling (recouping buyiing and selling costs only.)  Do NOT look at your house as a means to make money.

If you plan to move prior to that, you are better off renting .

Nechie122

It depends on what you think the housing market is going to do. Someone who bought in 2001 would have been able to sell in 4-5 years and make a pretty penny, but that wouldn't be true for someone who bought at the height of the market in 2006 or 2007 -- that person would be lucky not to be underwater. Check out this calculator: http://www.nytimes.com/interactive/business/buy-rent-calculator.html

I would say the key to not getting screwed is to be conservative. Don't "stretch" for a starter home; a starter home should feel like a starter home when you look at your expenses.

magpie1127

Summer2011Bride:

I will say, too, that a big part of why we don't think of this as our "forever" home is that we don't think of this city as our "forever" city. For now, we both have good, steady jobs and a life here that we enjoy. However, we're both in agreement that we don't want to live in the same state forever, so down the line, we'd like to move to another city. Because we could afford a home and didn't want to keep wasting money renting, we went ahead and bought until that time comes.

This is same kind of the situation we're in. We can afford a nice home (from what I can gather, considering we haven't been pre-approved yet) but would probably end up moving down the line for jobs and things.

 

LoveKiss

In a strong market, 5 years. In this sluggish market, 7 years. The thing is that Fannie Mae and Freddie Mac are holding back a large number of foreclosures from the real estate market. According to our agent, about a year ago the lenders indicated that they planned to release these houses when the time is right. If I were a betting lady, I'd bet that the time will be right after the results of the November presidential election. So there may well be a whole new crop of homes still to hit the market and depress prices for another few years. If you are counting on price growth any time in the next few years, it may not be a smart idea.

So then you have to count on actually paying down the principal on your loan enough to fully recoup your buying and selling costs just to break even. Since the first 5 years of your mortgage payments go far more toward interest than principal, that really drags out your break even period. And do you really just want to break even with no money left over to put into the purchase of another home? Probably not. So then you need to add a few more years in order to make it into a profit zone, and hope that you don't have to replace a roof, hvac system, etc that would eat into your profit.

raw1299

the average time is around 7-8 years.