Should we buy a house during medical residency & dental school?

[27Txgirl18]

Hi, nontraditional student here. I'm 31, married, have 1 dog and plan to have children during dental school. My husband is an MD/PhD student and receives a stipend for school that is enough for us to live off of. I work as a dental assistant and have been saving most of my money and turning some of it around for profit in crypto. Neither of us have debt. We've been incredibly fortunate to be save up around 75k(liquid as of recently). I've grown up poor and never lived in a place that I'd proudly invite friends over for. I'd like to have a space of my own, that is inviting where I can bring people together to eat and study, but also large enough to keep my abundant craft things out of sight, and eventually enough room for any additions to our family. I'm in my 30s and feel like I'm ready to start living like a normal social person and not a closeted poor college student with too many hobbies and stuff that goes with it and the shame of subjecting people I want to spend time with, to a cluttered space like that. I'll be starting dental school out of state next year and my husband will join me for residency a year after that. So for one year, I will use loans for the mortgage and then when my husband joins me, we'll use the stipend/residency money to cover mortgage--. We're thinking about a house/townhouse between 150-220K. Is this a bad idea?

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[brownman23]

Is it a guarantee that your husband will join you? How sure are you guys that he will match at a program close to your dental school?

How do you feel about renting a house? Typically, buying a house/apartment makes sense if you plan to live there for 5 years or longer.

 

[27Txgirl18]

Is it a guarantee that your husband will join you? How sure are you guys that he will match at a program close to your dental school?

How do you feel about renting a house? Typically, buying a house/apartment makes sense if you plan to live there for 5 years or lon

Is it a guarantee that your husband will join you? How sure are you guys that he will match at a program close to your dental school?

How do you feel about renting a house? Typically, buying a house/apartment makes sense if you plan to live there for 5 years or longer.

Pretty sure. He doesn't want to go into specialties that happen to be competitive, but his application is very competitive. He will only be applying in the city I'm in. We're okay with breaking even or losing a little money..so as long as we can find a place that w/tile, 2+ bedrooms. (We have an aging dog that poops on the carpet 2 days a week and it's taking a toll on my mental health). Those run around $1400+. But the total monthly cost for buying runs between $750-1300 depending on the place. We'll be there for at least 5 years between the two of us.

 

[27Txgirl18]

Is it a guarantee that your husband will join you? How sure are you guys that he will match at a program close to your dental school?

How do you feel about renting a house? Typically, buying a house/apartment makes sense if you plan to live there for 5 years or longer.

Also, if we rent, it'd be after 5 years, after we leave. We might end up in a different state, in which case we'll probably hire a property management company to take care of anything the tenents might need.

 

[Angus Avagadro]

Also, if we rent, it'd be after 5 years, after we leave. We might end up in a different state, in which case we'll probably hire a property management company to take care of anything the tenents might need.

Financially, it doesn't appear owning a home has all that many advantages. Depending on the market, you could lose mone if you try to sell in 5 yrs or less. Rental properties can make sense at times, say buying a duplex and renting the other half to help with the mortgage, then continuing as a rental should you move. Property management companies usually take 20% of the rental income to manage the property. Being a distant landlord can be a hassle if washers or fridge goes out. Both happened to me. If I wasn't planning on staying in the area, I probably would rent instead of buying.

 

[NontradICUdoc]

No. You can’t afford it right now. Finish dental school

 

[Bobblehead]

Hi, nontraditional student here. I'm 31, married, have 1 dog and plan to have children during dental school. My husband is an MD/PhD student and receives a stipend for school that is enough for us to live off of. I work as a dental assistant and have been saving most of my money and turning some of it around for profit in crypto. Neither of us have debt. We've been incredibly fortunate to be save up around 75k. I've grown up poor and never lived in a place that I'd proudly invite friends over for. I'd like to have a space of my own, that is inviting where I can bring people together to eat and study, but also large enough to keep my abundant craft things out of sight, and eventually enough room for any additions to our family. I'm in my 30s and feel like I'm ready to start living like a normal social person and not a closeted poor college student with too many hobbies and stuff that goes with it and the shame of subjecting people I want to spend time with, to a cluttered space like that. I'll be starting dental school out of state next year and my husband will join me for residency a year after that. So for one year, I will use loans for the mortgage and then when my husband joins me, we'll use the stipend/residency money to cover mortgage--. We're thinking about a house/townhouse between 150-220K. Is this a bad idea?

A few thoughts in no particular order of importance.

Your money shouldn't be in crypto if you're planning to use it for a house purchase in the immediate future due to the rather wild fluctuations there. It should be sitting in a savings account seasoning for the mortgage process.

Going with the high end of your range, a house of 220k with a conventional 80% loan will require a 44k down payment. Rounding up to 50k for transaction costs and immediate "must fixes" (hello new furnace!) gives you about 25k as a cushion for a rainy day fund. Only you can decide if that's sufficient emergency reserves in case something really bad happens with the house, or dog, or pregnancy or child.

I'm not sure how to write the proud comment but, either you need better friends or you need to not worry about how you're living as long as it's clean and tiny. The worst thing physicians can do is live to their anticipated salary before they even get it and then increase their lifestyle as their salary increases through the years.

I would work on your mindset that your present living situation is something to be ashamed of. That is likely both going to be cheaper and will likely save you thousands/hundreds of thousands throughout your life in spending that could be better applied elsewhere. Being ok living like you're in college is the secret to success as a high earning couple that's going to start saving later in life. You've lost many years of compounding.

And finally, if you're going through with this you need to be prepared to handle the aging dog, pregnancy, initial childcare, health complications, mortgage and that your heat will go out at the most inopportune time during final exams. As long as those balance well against a possible inferiority complex from growing up less well off than your classmates and you're willing to apply your money to that extent then you just need to watch your pennies and learn to be handy with regards to the house and household.

 

[stickgirl390]

I’m 31, about to match and also considering switching from buying to renting. I think you should wait until your husband gets his match results. It’s too risky to make such a big decision now, without all that information. Even though it may seem like a sure thing that hell match in that city, it’s not a sure enough thing to bet on. Lots of people have competitive residency applications, and the #1 driving factor in selecting residency, year after year, is location, not prestige of program. There may be a lot of competition for the city he’s trying to match in.

Also, if you wait until he graduates, you can look into financing through a physician loan instead of a traditional loan, if that option is something that would work for your situation.

 

[GoSpursGo]

I also agree, until your husband matches it's just way, way too risky to buy. Even if your husband has a 90% chance to match in your city, on the 10% chance he doesn't being tied to a house would turn that bad situation into an even worse one. And TBH, I'm not sure what city you're looking in, but $220k is not a lot for a home in the current environment.

Also, you're very likely to get a better mortgage after your husband graduates and becomes eligible for a physician home loan.

 

[DOVinciRobot]

I bought a house in medical school and did so again for residency. There are pros and cons to both buying and renting, so make sure you crunch the numbers/situation and make sure it makes sense for you personally.

Personally I’m glad I had my own house, and I got lucky with the market that when the time came to sell the med school home I easily made a healthy profit. I disagree with the many people who instantly say either yes or no without knowing or considering the individual situation at hand. The answer for whether or not buying is right for you is “it depends,” and only you have all the information available to make that determination.

 

[voxveritatisetlucis]

No, but you should be investing that 80k. As Ray Dalio often says, “cash is trash.” Equities outperform real estate over time. Either DCA or wait until SPX gets to 3500 and buy VOO (8 basis points less than SPY). If you want to be extra safe, you could wait until it gets to 3200, however it may never get that low. That’s why DCA is good.


Would avoid putting more than 20% in individual names. Of that 20% no more than 5% should be a in single name.

Not more than a 1% in crypto. Avoid derivatives too.



*not investment advice

 

[wysdoc]

I bought a house in medical school and did so again for residency. There are pros and cons to both buying and renting, so make sure you crunch the numbers/situation and make sure it makes sense for you personally.

Personally I’m glad I had my own house, and I got lucky with the market that when the time came to sell the med school home I easily made a healthy profit. I disagree with the many people who instantly say either yes or no without knowing or considering the individual situation at hand. The answer for whether or not buying is right for you is “it depends,” and only you have all the information available to make that determination.

I agree with @DOVinciRobot
If you are single/have the $$ it might be a good thing.
My son bought a house as he started med school, and was thinking he might stay in the same city for residency as well.He was tired of apartment living and wanted his own place.
As it turned out he matched in another state, but he still sold the house for more than he paid for it at the end of those 4 years so it was a great choice for him.

 

[deleted1100659]

I agree with @DOVinciRobot
If you are single/have the $$ it might be a good thing.
My son bought a house as he started med school, and was thinking he might stay in the same city for residency as well.He was tired of apartment living and wanted his own place.
As it turned out he matched in another state, but he still sold the house for more than he paid for it at the end of those 4 years so it was a great choice for him.

I agree buying a house during residency can be a good investment if you buy at the right time. Depends on the market. Bought my house during residency, it sold for a nearly 50k profit.

 

[GoSpursGo]

I will just point out that the housing market has been historically strong over the last 10ish years. There are a lot of people out there with good stories who chose to take the risk recently, but that may not be the case in perpetuity. Throw in the potential for spouse to perhaps not be able to join for residency... I would just be very cautious. There are a lot of ways that buying a house could go wrong.

 

[voxveritatisetlucis]

Agree with the above. If you buy a house now, it is more likely than not that you will lose money if you have to sell in 4 years?

Rising rates alone make the housing market unsustainable

 

[GoSpursGo]

Agree with the above. If you buy a house now, it is more likely than not that you will lose money if you have to sell in 4 years?

Rising rates alone make the housing market unsustainable

... I also think that is a little strong

People who have been predicting a housing crash for years have repeatedly been proven wrong. If I had bought rather than rented for med school, residency, and fellowship, I would have made some tremendous profit, but just because the market has been strong for a while doesn't mean it will continue to be. My main point is that things are always unpredictable in the housing market when you're looking over a relatively short period of time, and while a quick return on investment is possible you also have to consider what happens if you have to sell at a loss.

 

[Gilakend]

I didn't plan to before the housing market was crazy and 100% don't plan to now. The amount of headache and risk you are taking on by owning it is not worth the chance of breaking even or maybe being marginally ahead. As a busy resident with limited funds, it doesn't make a lot of sense to me.

The only chance I would buy a house is if the market tanks before next May.

 

[voxveritatisetlucis]

I would also say that if you can afford to keep two houses in case of a residency location switch then it may be worth it. But if you would have to sell, then not worth it.

 

[xffan624]

I bought one about 2 years into residency. I lived in a large metropolitan area and I wanted to stay in the area so I felt comfortable doing so. I had been renting a house and the owners decided to sell the place. I didn't want to buy it as I felt it was overpriced for the amount of work it needed so I started looking around for another rental, but the market wasn't great. Found a smaller but much better maintained place in the same area I was living for sale and my mortgage was actually lower than the rent I had been paying (of course you have to factor in all the maintenance costs as well). I used the VA home loan program to buy with no PMI and no downpayment as my savings were limited. After graduating residency I mostly focused on jobs that wouldn't require me to move although I was open to the right one further away. I ended up finding one close so got to stay in my house. I probably won't stay long term, but the place is good enough for me now. I was a nontrad too but had moved a lot so had avoiding buying until then. It felt great for me to finally put down an anchor, but definitely understand waiting if you're young and still figuring out long term plans.

 

[MDMechEngr]

I would wait to buy as the RE market is too hig right now. With interest rate rising and the economy heading south, a receession is real in the next couple of years. The RE market will adjust when this happens. You dont want to buy high and be up side down, unless you plan to hold it for 10 years or more.

 

[Med Ed]

I didn't plan to before the housing market was crazy and 100% don't plan to now. The amount of headache and risk you are taking on by owning it is not worth the chance of breaking even or maybe being marginally ahead. As a busy resident with limited funds, it doesn't make a lot of sense to me.

The only chance I would buy a house is if the market tanks before next May.

This.

As an attending, if I had to sell my house in a tanking market I could absorb the hit and move on. As a resident, that same scenario would have financially crippled me for years.

I know this isn't 2006, but I remember quite vividly how the residents of that era were all buying houses and condos like mad, sometimes with 0% down interest-only loans. Sounds better than "throwing rent money away" until you have to unload your now-overpriced domicile and fork over about 7% in realtor fees and closing costs (while simultaneously finding a new place to call home).

Rent can be expensive and irritating, but ultimately you're paying for flexibility. As a student/trainee that can be worth quite a bit.

 

[Lem0nz]

Quite seriously would only buy a house again for reasons not related to money. As a resident it is a poor investment compared to other safer strategies. So if you're asking for sound financial advice, I think everyone here would readily agree that there are simply better and safer ways to invest money in this period of your life (school and residency).

That out of the way - I bought a house. We probably lost somewhere between 15-30k at the time. I do not regret it. Sometimes you have to (or simply should) use money for happiness. We wanted a dog, a yard, to start a family. We accomplished all of our goals and lived in a beautiful home where our family could come and stay whenever they wanted and... it was worth it. It made five years of surgical residency much more bearable. And I enjoyed the concept of owning a thing. I also thought I would end up staying in the area - I didn't, and that is fine and didn't upset me, but if I had then it would have been a great investment because I'd have been selling it after Covid land weirdness and made a fortune.

It was a **** investment though in the end for me. The oil heater in the basement broke and spilled and it was a colossal amount of money to rectify it. Things happen.

But we were happy in that house and being happy in residency is more important than money. Money will be made as an attending, and everyone will have time to make good investments when they graduate residency.

 

[Darrow O'Lykos]

I get OP started this thread months ago and has likely already made their decision regarding rent vs buy, but I'm going to provide a bit of an opposing view to others. Despite the current housing market being insane and a recession likely forthcoming, that doesn't change the simple supply vs demand, and there is a comical lack of supply in the housing market, and will be for years to come. As @GoSpursGo and others have mentioned, the real estate market is historically strong and is typically a safe investment over the long haul. Plus, you have to live somewhere, right?

I don't know what part of the country y'all will be in (some cities are more recession-proof than others), but assuming you can actually a get a liveable house or townhome for that price range with a reasonable interest rate without any crazy HOA fees, then I think you should seriously consider buying. Let's say you buy, the market tanks (which, again, unlikely given the lack of supply) and it loses 20% its value. So what? You bought modestly and will continue to pay into it, and once the market bounces back, your equity will soar. It's a different conversation if y'all take on a large mortgage for a $500k house that is easy to go upside down in a hurry, but if you're buying in the low $200s, that won't be an issue, especially once the two of you start making attending money. A $250k home w/ 50k down at 6% would be >$1500/month (speaking of, I would advise not using all of that $75k in a down payment). Even on single income, that should be a non-issue. Plus as you've mentioned, there's more than just finances when living in a home and having family/friend visit, etc.

So as others have said, ultimately, it depends. But from what little info/context we have, I'd lean towards buying in your position. Just please don't waive any inspections in the process, even if other buyers are idiotically doing so.