Graduating Medical Student- Rent vs. Buy in Residency

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MathKid
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Graduating Medical Student- Rent vs. Buy in Residency

Post by MathKid »

Emergency funds: Yes, 6 months
Debt: ~30k in student loans at ~6.4% (fortunate beneficiary of great financial aid)
Tax Filing Status: MFJ
Total Income ~50k (spouse is currently working, and when obtains a job at the new location our total income will likely be around 90-100k)
Tax Rate: 15% fed;
State of Residence: SC (moving here)
Age: mid 20's

Retirement:
-Spouse and I have roth IRA's at vanguard in the low five figures. We plan to max these out yearly.

I'm a graduating 4th year medical student who will be relocating to SC to start a surgical residency (5 years). Currently, my spouse and I are trying to decide on whether to rent vs buy a home. We will likely be moving after residency completion for fellowship or a job.

Rent:
-2 bedroom apartments in the area rent for ~1200-1400 per month. Renting a townhome or a free-standing home would be more like 1500-2000 per month

Buy:
-There are suitable homes in the area selling for 150-200k. At current quoted interest rates on a physician loan (3.25% on a 7/1 ARM), this would result in mortgage/tax/property insurance payments of ~900-1100 per month.


Questions:
I was initially planning to rent. I like WCI's blog, and agree with him that buying in general is not a good choice for residents. However, nearly every resident in my program has bought a home, which makes me wonder if I'm missing something. How big of a rent to mortgage/tax/prop insurance gap would there have to be for your to argue that buying is superior? 400 a month? 500 a month? We plan to start a family during residency and at some point will need more than 2 bedrooms, and would have to rent a larger place if we go that route. I don't view buying as a great investment as much as a more affordable way to acquire the living space we need. I figure if a home mortgage is $400-500 per month less than renting, I can use that extra money to pay for upkeep and maintenance of the house and hopefully come out even.

What are your thoughts on renting vs buying in this situation?
Last edited by MathKid on Thu Mar 26, 2015 2:25 pm, edited 1 time in total.
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Taylor Larimore
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Taylor Larimore »

Mathkid:

In my opinion you should probably rent for these reasons:

You intend to have a larger family within a few years requiring more space than needed now.

You intend to move in 5 years.

Renting gives flexibility if you don't like the neighbors, etc.

If you buy the cost of selling and buying again is expensive.

The landlord does the maintenance.

The White Coat Investor recommends: "Rent, don't buy, during residency."

Best wishes.
Taylor
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PoeticalDeportment
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by PoeticalDeportment »

I rented in a building close to my residency hospital. Several other residents bought in the exact same building. If you bought anytime between 2006-2007 and sold 2010-2011 do you know how that worked out? Saving $500 per month would still leave you in the red. I always described myself as a "happy renter." I never had any intention of settling down permanently where I was a resident.

A big thing that makes buying especially risky for medical residents is your complete lack of flexibility with when you buy and sell (you only have a short window for both of these transactions).

Why would you want the headache of buying - enjoy this time renting.
Andyrunner
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Andyrunner »

Your going to be working tons of hours and have little to no time to take care of a house. If you start a family, you will have even less time to take care of a house. I highly suggest look at renting a townhome close to a park (for the future kids). I see a lot of residents in my city buy houses, and I really have no idea why, the only reason I can think of is because the cost of rent is about the same as a mortgage. The residents generally sell it at the same price they bought it for, but they defiantly keep the real estate agents in town happy.
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William4u
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by William4u »

For all the reasons above, rent!
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by deanbrew »

I'm not a doctor, and I don't even play one on TV. But I've worked in the real estate industry for a long time. I would advise to not buy a home that you intend to live in less than seven years, unless there are extenuating circumstances, such as you need a large detached home with a yard and there are no suitable ones to rent. The costs to buy and then sell a home are substantial on both ends. Your income will be sufficient you should be OK either way, but I see no sense in rushing into home ownership before you have a family and are settled in one location.
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JDCarpenter
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by JDCarpenter »

Agree with all of above; avoid putting more responsibilities (and risk) on your plate.

Anecdote: DW and I bought at the start of her OBG residency back in the day, as we expected to stay in the area and keep the house until we had 3 kids. Oops. She got job on the other side of the metro area and we had to sell at end of the four year residency. Loss, all told, was greater than 10% after money we put into fixing house up and the commissions.

In the course of the time there, I took 4 months to redo a bathroom, as I went out of town for work.... You'll essentially always be "out of town" in your residency....
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smackboy1
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by smackboy1 »

MathKid wrote:What are your thoughts on renting vs buying in this situation?
Rent. My wife is a doctor and we know many physicians. It's not typical, but people do change residency programs for many reasons.
Disclaimer: nothing written here should be taken as legal advice, but I did stay at a Holiday Inn Express last night.
TDAlmighty
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by TDAlmighty »

I have observed this play out badly so many times...RENT!
Afty
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Afty »

A few other things you should work into your cost/benefit analysis:
  • Property taxes
  • HOA/condo fees
  • Home insurance
  • Maintenance costs
  • Transaction costs of buying and selling real estate
You will probably find that owning a home is significantly more expensive than renting, after you include all of those things. Note also that if you rent, you can put off moving to a large enough house for kids until you actually have said kids, saving money in the meantime.

That said, my wife and I did buy a condo for her residency in 2007 and sell it when she finished in 2011, and it worked out OK for us. I'm not sure we would make the same decision again, though.
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bertie wooster
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by bertie wooster »

Rent.
cutterinnj
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by cutterinnj »

Rent.

I Bought, because I had a 6 year residency.
I had no issues living like a college student, and had a bunch of roommates to pay my mortgage. I was a slum lord.

If you don't want to be a slum lord, don't buy.

you have no idea where you'll be in 3-4 years (6 years was borderline for making a profit.)
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dm200
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by dm200 »

I find it interesting that the costs you cite for purchasing seem so favorable vs. renting. With a 5 year horizon, buying may not be that bad a choice.

Would your "quality of life" be better with buying?

Buying is likely to result in more stable costs over time - mortgage will not go up, but rent may.

Perhaps THE most important and deciding gactor (IMO) is what your spouse thinks and wants to do. If your spouse is willing and able to assist in dealing with the tasks of home ownership, that might push the decision towards buying.
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MathKid
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by MathKid »

Wow. Thank you everyone for the replies and helpful advice. It seems like the general consensus is to rent, which is what I was leaning towards initially.

dm200: I was also surprised how much costs seemed to favor buying over renting. That was what initially led me to consider buying a place. I think QOL would be better for my spouse with buying, as we could have a nicer place than if we rented. However, buying obviously has a lot of additional costs besides the monthly mortgage payment. My spouse is definitely is more interested in buying than I am. If it was just me I would rent a place.
TravelerMSY
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by TravelerMSY »

There is also a thread on this exact topic on Fatwallet Finance if yiu want to review it. Buy vs. Rent for a surgical resident in Nashville.
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Zapped
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Zapped »

MathKid wrote: I like WCI's blog, and agree with him that renting in general is not a good choice for residents. However, nearly every resident in my program has bought a home, which makes me wonder if I'm missing something.
@MathKid - not to nitpick, but is the quote where I added boldface a typo? WCI clearly writes that renting is a good choice for residents, but you claim he says the opposite.

Regardless of that, I'm so glad most replies have urged you to rent rather than buy during your residency. Growing up in rented apartments, I personally knew when I graduated with my BSEE in the 80s that I was going to buy a house regardless of whether a detailed financial calculation of the rewards said it made sense or not. But if I had been in grad school, residency, or any job where I thought I might have to relocate in a few years I would have waited.
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MathKid
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by MathKid »

@Zapped - typo on my part. WCI has blogged in multiple places on how buying is generally not a good choice for residents. Nice catch.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by thatme »

MathKid wrote:Wow. Thank you everyone for the replies and helpful advice. It seems like the general consensus is to rent, which is what I was leaning towards initially.

dm200: I was also surprised how much costs seemed to favor buying over renting. That was what initially led me to consider buying a place. I think QOL would be better for my spouse with buying, as we could have a nicer place than if we rented. However, buying obviously has a lot of additional costs besides the monthly mortgage payment. My spouse is definitely is more interested in buying than I am. If it was just me I would rent a place.
I think the QOL piece is something to not be overlooked though. People talk as if 5 years is a really short time -- even if you just break even after 5 years, I think you've come out way ahead in terms of QOL, particularly for a spouse who is going to be holding down the homefront while you're working a lot. I can agree with everyone else on a purely financial basis, but having moved from an apartment to owning my own place in the last two years, I will say without hesitation that the benefits are well worth any extra expense/upkeep work.

Just something to consider -- it doesn't sound like buying a reasonable place has a high likelihood of turning into a financially ruinous situation for you regardless of what you decide to do.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by deanbrew »

MathKid wrote:I think QOL would be better for my spouse with buying, as we could have a nicer place than if we rented. However, buying obviously has a lot of additional costs besides the monthly mortgage payment. My spouse is definitely is more interested in buying than I am. If it was just me I would rent a place.
You probably shouldn't rule out buying, then. I stand by my earlier advice that renting is probably preferable, but you should probably keep an open mind. Have a realtor show you houses for sale and for rent and see what happens. Five years is long enough that it wouldn't necessarily be foolish to buy, unlike, say, a three-year assignment or residency. From a flexibility and financial standpoint, renting is probably a better choice. But you may not want to be a hardass about it, if your spouse strongly prefers buying, or if you find a for-sale home you both really like. The problem for you, of course, is that you will be working long hours and really won't want to do homeowner chores or maintenance/repairs/improvements.
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TDAlmighty
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by TDAlmighty »

I'm not sure I follow the quality of life reasoning. Could you not just be really picky about the house that you rent? Besides initial availability, I'm not sure how someone that owns a house vs rent has a higher quality of life. By the way, we've owned homes and condos.
bpman14
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by bpman14 »

Fellow resident here. My wife and I purchased at the start of residency and couldn't be happier with the decision. We did this for several reasons (that have definitely played out over the past 2 years)
1.) Cost: Even factoring in maintenance, taxes, HOA, and insurance, the total cost on our home per month is 400-500 less per month than even remotely comparable homes for rent in our area. Moreover, we bought in 2013 when the market was really just beginning to recover. Bought the house for 30k less than what it had sold for in 2006 and buyer paid all closing costs (so the feared purchasing costs were not an issue). Currently, identical model homes in my neighborhood are selling for 12-15k more than what we paid 2 years ago. Even factoring in no further rise in prices and a 6% commission at time of sale, we will still come out significantly ahead vs had we rented. Again, things could always have gone worse and the market could have crashed again. Perhaps I would be singing a different tune if that was the case.... As others have mentioned, you also have to factor in that a rental can also go up in cost annually. Several of my colleagues have seen there rent go up by 3-5% annually which is not insignificant on a 1000-1200 rent.
2.) QOL: Owning after having rented throughout college and medical school is great. We can paint rooms the color we want, do what we want to the yard, have a dog, and never have to worry about somebody telling us what we can or can't do to the house. I also enjoy doing things around the house on my time off. I find manual labor relaxing so as opposed to it being a stressor to fix a toilet etc I actually enjoy it.
3.) Speaking of pets: It was next to impossible to find a rental that would allow us to have our dog (a lab) which was not acceptable to us.
4.) Taxes: With property taxes and interest on the home, we are able to itemize $3500 over our standard deduction which also saves us money on that end.

I am a huge WCI fan and have read through all of his recommendations for residents. He agrees that in some circumstances, buying can be appropriate in residency. Especially if you are going to be there for 5 years and your SO wants to own, it is something you should consider. At the end of the day, it is an individual decision.

Best of luck and enjoy your time off before residency. Once it starts, you will wonder what you did with all of your spare time before!
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by White Coat Investor »

It's actually impossible to talk graduating medical students out of buying a house. I know. I've tried. They're all convinced they're special; their circumstances are unique; it will work out for them etc. Sometimes it does. Most of the time it doesn't. Certainly it's more likely to work out well for a 6-7 year residency than a 3-4 year residency. But I'm currently selling a home I bought 9 years ago for less than I paid for it. It also sat empty for a year. When I had a renter in it I was making money, but it was cash flow negative. Overall, probably came out a little behind compared to renting. Certainly renting would have been far less hassle.

Better to make your home buying mistakes with a little resident house than a big attending house, I suppose. Much easier to earn your way out of them.

The main issue is that first time home buyers don't get that a mortgage payment is SUPPOSED to be much lower than rent. Like 45% lower. They just don't believe that the transaction costs can be so high, or that maintenance and repairs can cost so much, or that homes don't appreciate in a straight line, if they appreciate at all.

Oh well. I just gave up and decided to sell ads to mortgage lenders instead. Since they're all going to buy anyway, might as well help them get a decent deal on the mortgage.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by JDCarpenter »

EmergDoc wrote:It's actually impossible to talk [SOME] graduating medical students out of buying a house. I know. I've tried. They're all convinced they're special; their circumstances are unique; it will work out for them etc. Sometimes it does. Most of the time it doesn't. Certainly it's more likely to work out well for a 6-7 year residency than a 3-4 year residency. But I'm currently selling a home I bought 9 years ago for less than I paid for it. It also sat empty for a year. When I had a renter in it I was making money, but it was cash flow negative. Overall, probably came out a little behind compared to renting. Certainly renting would have been far less hassle.

Better to make your home buying mistakes with a little resident house than a big attending house, I suppose. Much easier to earn your way out of them. [True.]

The main issue is that first time home buyers don't get that a mortgage payment is SUPPOSED to be much lower than rent. Like 45% lower. They just don't believe that the transaction costs can be so high, or that maintenance and repairs can cost so much [and/or take so much time], or that homes don't appreciate in a straight line, if they appreciate at all.

Oh well. I just gave up and decided to sell ads to mortgage lenders instead. Since they're all going to buy anyway, might as well help them get a decent deal on the mortgage.
Don't give up the fight (not that you truly have!). :-) DW and I have referred quite a few BabyDocs (and I don't mean pedis or Neo-Nat specialists) to your site, and will continue to do so. "Take a medical coding seminar or two, and see W.C.I."
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by kingsnake »

Rent!
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MathKid
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by MathKid »

Again, thank you all for your helpful replies and thoughts. You all have definitely given me more things to think about.

@bpman14 - I really appreciate hearing your experience as a current resident.

@EmergDoc - I love the book and blog. Because of it and this site I converted an old IRA to roth while a medical student (and paid no taxes because of education credits), and have been trying to max out the roth IRA's while I'm still in school (spousal roth IRA). Regarding the housing decision, I think there is a lot of external pressure placed on residents to buy not only from realtors and loan officers, but also from friends and family. A few of the residents I've talked to initially planned to rent, but changed their minds at the urging of others. It's also hard on the spouse to see all the other residents' spouses in nicer homes. While I know I'm a resident and should live like it, it doesn't mean that it is easy.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Erwin007 »

One other thing that people don't mention in this discussion (for some reason that evades me), is that if you "won't have time for repairs/upkeep", how in the world are you going to have time to move once or twice during residency? What if your landlord decides to sell their house? What if the landlord is terrible and doesn't perform necessary repairs and you have to move? I would much rather have to cut the grass once a week for 8 months a year, fix an occasional problem, than spend days packing and one of your weekends off a month moving.

Also a lot to be said for a happy spouse at home. He/she is going to be there 23.5 hours a day while you're gone at work. Best to make them happy.

Also, the new resident work hour restrictions are much more lifestyle friendly than they were 8-10 years ago. Our interns worked significantly less than I did when I was a chief resident in my 5th year.

I guess the moral of my story is that there is more to this than pure finances, and all have to be figured into this decision. Some offering advice on here, while well meaning, may not have been residents and have no idea how stressful/difficult it is on a stay-at-home spouse. Happy wife, happy life and all that.
Last edited by Erwin007 on Thu Mar 26, 2015 6:52 pm, edited 1 time in total.
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avenger
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by avenger »

Rent.

I had a 6 year residency. I bought a condo. It's still (10 years later) worth half what I paid for it. I'm an unintentional landlord, which is a job I don't like.

I'm lucky it's just a blip in my overall financial picture.

Rent.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by TDAlmighty »

EmergDoc wrote:It's actually impossible to talk graduating medical students out of buying a house. I know. I've tried. They're all convinced they're special; their circumstances are unique; it will work out for them etc. Sometimes it does. Most of the time it doesn't.
AMEN! Your experience is what I see play out time and again. Not just with residents, but anybody that moves to an area with a defined time horizon and/or young married couples without kids. Almost all ownership numbers in the rent vs. buy are "best-case" (1% annual maintenance, sells immediately, etc.). They are always one AC condenser/roof leak/foundation crack/soft market away from breaking even. As you said, some get "lucky", most do not.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by TDAlmighty »

Erwin007 wrote:One other thing that people don't mention in this discussion (for some reason that evades me), is that if you "won't have time for repairs/upkeep", how in the world are you going to have time to move once or twice during residency? What if your landlord decides to sell their house? What if the landlord is terrible and doesn't perform necessary repairs and you have to move? I would much rather have to it the grass once a week for 8 months a year, fix an occasional problem, than spend days packing and one of your weekends off a month moving.
So let make sure I understand correctly:
1) If you are not savvy enough to find a good rental and negotiate a good lease, then you should buy a house. Because home ownership is simpler and less fraught with uncertainties than renting.
2) On average, renters spend more time/effort moving than homeowners on maintenance.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by dm200 »

I think QOL would be better for my spouse with buying, as we could have a nicer place than if we rented.
While this is certainly not the only, nor perhaps the most important, factor - I strongly suspect this can make YOUR QOL better as well.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Erwin007 »

TDAlmighty wrote:
Erwin007 wrote:One other thing that people don't mention in this discussion (for some reason that evades me), is that if you "won't have time for repairs/upkeep", how in the world are you going to have time to move once or twice during residency? What if your landlord decides to sell their house? What if the landlord is terrible and doesn't perform necessary repairs and you have to move? I would much rather have to it the grass once a week for 8 months a year, fix an occasional problem, than spend days packing and one of your weekends off a month moving.
So let make sure I understand correctly:
1) If you are not savvy enough to find a good rental and negotiate a good lease, then you should buy a house. Because home ownership is simpler and less fraught with uncertainties than renting.
2) On average, renters spend more time/effort moving than homeowners on maintenance.
1) In at least some cases, home ownership is simpler and less fraught with uncertainties than renting. Like my experience where I purchased a house in residency and watched several of my co-residents struggle with bad landlords, moving during residency, etc. Are you saying that's never happened?
2) Don't know. I rented a house while in fellowship and still had lawn maintenance to do. Sure we were able to call the management company to come fix the leaky toilet, but in all honesty I could have done it in about 15 minutes plus a trip to the hardware store. I would much rather do that or something similar every so often than face the specter of moving a family (and house full of a family's stuff) while in the busiest and most stressful time of yor life.

People on this website are so dogmatic about everything. They have to be absolutely correct about everything, and anyone who disagrees or provides a contrarian point of view absolutely has to be an idiot. I don't get it.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by White Coat Investor »

MathKid wrote:It's also hard on the spouse to see all the other residents' spouses in nicer homes.
You can rent very nice homes. Too many people have this idea of a crappy apartment when they think "rental" and this idea of an awesome brand new mansion when they think "own." I had neighbors 3 doors down who rented their house for 3 years. Same as my fancy mansion. Big yard, 6 bedrooms, 4000 square feet, nice views, great neighborhood, great schools etc. But they were only going to be there 3 years, so they rented. There were houses for sale in the neighborhood when they moved in.

And P.S.- if you want to be financially successful, you will notice that the other doctors' spouses always live in nicer homes than you do. The spouse can either get used to it or the doctor can get on the hedonic treadmill.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by kksmom »

EmergDoc wrote:
MathKid wrote:It's also hard on the spouse to see all the other residents' spouses in nicer homes.
You can rent very nice homes. Too many people have this idea of a crappy apartment when they think "rental" and this idea of an awesome brand new mansion when they think "own." I had neighbors 3 doors down who rented their house for 3 years. Same as my fancy mansion. Big yard, 6 bedrooms, 4000 square feet, nice views, great neighborhood, great schools etc. But they were only going to be there 3 years, so they rented. There were houses for sale in the neighborhood when they moved in.

And P.S.- if you want to be financially successful, you will notice that the other doctors' spouses always live in nicer homes than you do. The spouse can either get used to it or the doctor can get on the hedonic treadmill.
Did residency in SC.
Rented a decent appartment, that is not widely advertised. Saved enough to put in our roths and 401ks- didnt max by any means
Currently live in a middle class area 3/2 house thats not fancy.
But no debts, have grown our assets and working to the FI number.
Of course did this all based on stuff I learned on WCI and BH site.
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Dandy »

For a busy person a house is sometimes a financial and work burden. I'd rent where the landlord or super keeps things humming and enjoy the off time..
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by WL2034 »

I think there is some great advice on this issue from both sides of the fence.

My wife and I finished residency 2 years ago. Our decision during residency was to rent as close to the hospital as was feasible. We loved being nearby and not having a long commute after 12-15 hour days. I valued not spending any time on repairs or yard work. We negotiated a 3 year lease with our landlord to avoid moving during residency. Our landlord wasn't even all that great/responsive, but I still preferred dealing with him compared to dealing with costs and repairs on my own.

As for the spousal issue, that's the real question. As much as I am a proponent of renting in this circumstance, this is more of a personal and lifestyle issue in my mind. If you are going to buy, keep it as inexpensive as possible. I think this will end up being more of a hassle in the future than an outright financial disaster. Let's say you buy a $150k house and then have to sell it in 5 years. Worst case scenario it sits on the market and you have to be a landlord or maybe it depreciates and you take a $50k loss on it after transaction costs, repairs, etc. Not great outcomes but you will recover.

In the end, you and your spouse have to be on the same page. I think renting comes out ahead financially in most cases when you are planning to live in the area for 5 years, especially when you are going to be in very demanding job and maybe not have time for a lot of DIY. As for the lifestyle issues, that's up to you two to decide. I strongly agree with the sentiment about not keeping up with the Joneses. It's a very slippery slope, you'll do well not to get caught up in it before you even cash your first residency paycheck.
853211
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by 853211 »

Judging by the prices, I'm guessing MUSC and West Ashley area?

If that's the case, rent and get close to work. Traffic in the area is a nightmare and you do not want to be coming from the North Charleston area. That budget should get you a very very nice rental in any other SC market.

Unless things go nuts, you won't recoupe transaction costs as the demands just not there in other markets.
Lafder
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Lafder »

If you can find a decent home CLOSE to your work sites, I would buy.

Yes it means you are responsible for repairs and upkeep. But it is nice to be your own boss and be able to paint a wall or have pets. I would prefer that to renting even if costs are the same or a little higher to own.

You may end up deciding to stay when your training is done.

I would look at rentals as well as homes for sale to really see the comparison before deciding.

Length of commute to work is a big factor, I can not emphasize that enough.

I still own a small home walking distance (2 blocks) to the med school and hospital. I have never had a problem renting it and have had good luck with tenants. I am glad I bought. Yes you can find horror stories out there too. What will make your spouse happy is also important.

lafder
investordoc
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by investordoc »

Having been there, I suggest you rent for all the above reasons. Nothing more for me to add.

J
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MathKid
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by MathKid »

Just as a follow-up.

We decided to rent a nice condo close to the hospital. After running lots of calculators and reviewing the discussion here, i think it was the right decision for us. I guess we'll find out over the next five years!
WL2034
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by WL2034 »

MathKid wrote:Just as a follow-up.

We decided to rent a nice condo close to the hospital. After running lots of calculators and reviewing the discussion here, i think it was the right decision for us. I guess we'll find out over the next five years!
I don't think you will regret this. Location and proximity to the hospital is even more important than rent vs. buy, IMO. Best of luck, remember to live and enjoy life when you're not working!
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White Coat Investor
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by White Coat Investor »

MathKid wrote:Just as a follow-up.

We decided to rent a nice condo close to the hospital. After running lots of calculators and reviewing the discussion here, i think it was the right decision for us. I guess we'll find out over the next five years!
Distance to the hospital is almost more important than rent vs buy. I lived 1/2 mile from the hospital during residency. That allowed me to ride my bike to work in a couple of minutes. I lost almost none of my day to commuting, and what was lost probably counted as much needed exercise. We saved a ton on gas and other driving-related expenses and were able to avoid purchasing a second car. Plus, there was very little risk of falling asleep after 30-36 hour shifts, if anyone does those anymore. I once had a 40 minute commute. That was scary after night shifts. I've fallen asleep at a traffic light on a 15 minute commute after a night shift. That's a legitimate risk for doctors, especially resident doctors. Don't underestimate it.
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Erwin007
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Erwin007 »

EmergDoc wrote:
MathKid wrote:Just as a follow-up.

We decided to rent a nice condo close to the hospital. After running lots of calculators and reviewing the discussion here, i think it was the right decision for us. I guess we'll find out over the next five years!
Distance to the hospital is almost more important than rent vs buy. I lived 1/2 mile from the hospital during residency. That allowed me to ride my bike to work in a couple of minutes. I lost almost none of my day to commuting, and what was lost probably counted as much needed exercise. We saved a ton on gas and other driving-related expenses and were able to avoid purchasing a second car. Plus, there was very little risk of falling asleep after 30-36 hour shifts, if anyone does those anymore. I once had a 40 minute commute. That was scary after night shifts. I've fallen asleep at a traffic light on a 15 minute commute after a night shift. That's a legitimate risk for doctors, especially resident doctors. Don't underestimate it.
This is true. I lived 20-22 minutes from the hospital in residency. Anything within about 10-15 minutes was not safe. One of my co-residents lived about five minutes from the hospital--his house was broken into an average of twice a year. With a family it wasn't worth it so we lived a little farther away. After many/most of my 30-36 hour shifts, I would end up in my driveway or garage with no recollection of how I got home. That's scary.

Hopefully it works out well for you, and good luck with residency.
technochino
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by technochino »

I vote rent. You are going to be working crazy hours and dealing with home maintenance is not going to be high on your list of priorities. Sleep and family time will be. Of the residents who bought, most were underwater, still holding on to their properties, now accidental landlords because they are unwilling to eat the loss. Buying will mean trying to sell while you are finishing your chief year. Keep it simple and rent.
katnok
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by katnok »

We rented during my residency, and had to move once but it was smooth.
5 yrs after residency, we are still renting and couldn't have been happier. The decision to rent was based on several factors. Didn't have money for down payment, was not sure if my employer and I were going to like each other or not, and saw a physician taking 50k loss on a 2 yr old custom built house, which they had to sell after being asked by his employer to leave the job.
Lot of people (at least the ones I know where I work) who keep saying that renting is wasting money forget that when you rent, you do not rent a house as big as the one that you would buy. When we did the math recently, found that buying made financial sense only if we stayed for over 7 years.
SleepKing
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by SleepKing »

MathKid,

I agree with you renting. Wish we had! Good luck as an intern!
Bud
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Re: Graduating Medical Student- Rent vs. Buy in Residency

Post by Bud »

One thing that has not been mentioned yet is that the bigger the down payment, the more you tilt cost of ownership in your favor by reducing your monthly payment. Also if you buy a newer home, there should be less problems, but there are no guarantees.

Good luck in your decision.
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