MYTH# 7: Five Year Rule

August 20th, 2008 by Matt DiChiara| Posted in Apartment Guide, Rent vs Buy | No Comments »

Reality: Nearly one third of all homeowners move within five years and many end up losing money.

Most people who buy a house plan to stay there for a long time, but many end up moving sooner than planned for job and personal reasons. Short-term homeownership can be a costly proposition. The cost of a round trip into and out of homeownership can be as much as 10% of a house’s sale price.

If you move in a few years, those costs could easily exceed whatever equity and appreciation you’ve realized. In a worst-case scenario, you might have to write a check in order to sell your house.

Or you could find yourself needing to either sell your house at a loss or forego a superior job opportunity elsewhere.

Reality Check

According to one research report, buyers who sold within four years paid, on average, 19% more as owners than they would have paid as renters.[15] If you think there is any chance you may be moving again within the next several years, renting deserves serious consideration.

“I have owned three homes previously and dislike the typical owner headaches, such as mowing the lawn, painting, replacing roofs, etc. I like the sense of family, friendly surroundings and professional atmosphere associated with apartment living.”

Don Grainger
Account Executive
San Antonio, Texas

NOTES
15. “The High Cost of Short-Term Homeownership.” Research Notes, National Multi Housing Council, December 1, 1997.