Comment Re:Buying is often cheaper (Score 2) 584
It is a poor investment if you need to sell in less than 5-6 years
Absolutely. And I'd second taking a hard look at the "math," as well as including a lot of unforeseen potential costs of home ownership if you're not planning on staying long-term.
Most people just do comparisons of rent vs. mortgage+taxes or whatever. There's often a lot more to home ownership. There are transaction fees both to buy and sell, agent fees if you use one, and then you have the real question of how much maintenance really can be.
If it's a newer home, and you're lucky, maintenance may not be a major cost. If you're looking at an older home and you're unlucky, you may find really expensive stuff once you start tearing open a wall or a floor just to solve what seems to be a "minor issue" in your inspection before buying.
I bought a home several years back in one of the best neighborhoods in a medium-size city. We specifically looked for a home in a neighborhood that would maintain value in case we needed to sell. Five years later, we needed to sell because of a move. And we did sell -- and relatively quickly, and we got nearly 15% above our buying cost, which sounds good, right?
Except over the five years there we had to put on a new roof (something we knew going into buying it), then we ended up doing a new HVAC system, complete remodel of a smaller bathroom, and a lot of other miscellaneous things just minimally needed to get the house ready for sale again. In the end, yes, we did end up losing less money over five years than we would have if we had been paying rent for a house of that size in that neighborhood... but not by a huge amount. If we had been renting an apartment or smaller house or something in a slightly less nice neighborhood, we undoubtedly would have saved money over owning for five years, taking into account maintenance, improvements, transaction fees, etc. And this was for an older home that overall was in decent condition and had already been updated significantly by previous owners.
Over decades of ownership, you will likely build equity and can amortize the costs of maintenance and upkeep over time. But if you're not reasonably certain you'll be living somewhere for at least a decade or so, I'd seriously crunch the numbers and take into account potential unexpected costs if you'd have to resell.