to buy or not to buy a house in US

neeli · Post by **neeli** » Thu Nov 25, 2010 12:05 am

Is it worth to buy a house in US if i'll be staying in US only for next 5 years? any inputs?

returning_indian · Post by **returning_indian** » Thu Nov 25, 2010 12:31 am

No its not worth it.

stup123 · Post by **stup123** » Thu Nov 25, 2010 2:02 am

neeli;349787Is it worth to buy a house in US if i'll be staying in US only for next 5 years? any inputs?

5 years is too short in this volatile market
Its not worth paying closing costs now and again in 5 years(if you are lucky to sell it off in time)

samv · Post by **samv** » Thu Nov 25, 2010 2:36 am

The answer depends on your situation - where you are, what is your rent, what are you looking to buy, how affluent you are, do you need to money after 5 years etc.

Looks like you are in Bay area, so you need serious $$$ to buy. Therefore while you are living in the house chances are that you won't save much compared to your rent even with tax benefits (when you factor in other expenses involved like property taxes, HOA, Mello Roos, repairs, maintenance, gardener, added utilities, extra commute if applicable).

Unless you are extremely affluent, 5 years down the road when you move to India, you will need money and hence will need to sell the house. Unless the house appreciates at least 6%, you will have a loss. So the question to ask is - will this house appreciate say 10% in 5 years. While no one can predict future, my personal opinion is that house prices in high cost coastal CA will stay flattish in the next 5 years.

So in pure economic terms you may be paying 10% of purchase price, over 5 years, for the pride of owning a place of your own and joys that come with it. If you can afford it, go ahead.

If not, but you still want to live in a nice SFH in a good school district; there is no shame in renting such a place from a nice a landloard (yes, they exist) and paying $2500-$3500 a month for it.

neeli · Post by **neeli** » Thu Nov 25, 2010 4:25 am

Thank you all. Looks like its not worth investing. I am not very affluent, so returns matters a lot. If i buy a house here then i would want to sell it to get a house in india when i return. If ROI on house isn't promising, i will happily continue with the rental.

Man · Post by **Man** » Thu Nov 25, 2010 5:10 am

Absolutely positively emphatically no. N-O.

layman · Post by **layman** » Thu Nov 25, 2010 5:14 am

neeli;349906Thank you all. Looks like its not worth investing. I am not very affluent, so returns matters a lot. If i buy a house here then i would want to sell it to get a house in india when i return. If ROI on house isn't promising, i will happily continue with the rental.

Why take the risk? If you think real estate is going to appreciate, rent a place to live and invest in REITs.

samv · Post by **samv** » Thu Nov 25, 2010 5:32 am

layman;349911Why take the risk? If you think real estate is going to appreciate, rent a place to live and invest in REITs.

That does not give 5x leverage and bragging rights of owning a beautiful house :)

kalki · Post by **kalki** » Thu Nov 25, 2010 8:24 am

House is not an investment. If you feel strongly about living in your own house you should do it, but right now buying does not make economic sense. You are better off investing the downpayment somewhere else.

neeli;349906Thank you all. Looks like its not worth investing. I am not very affluent, so returns matters a lot. If i buy a house here then i would want to sell it to get a house in india when i return. If ROI on house isn't promising, i will happily continue with the rental.

maxciriloy · Post by **maxciriloy** » Fri Apr 29, 2011 11:39 am

If you have held the property for less than 3 years, your profits will simply be added to your income of the year and be taxed at the applicable rate. If you hold it for more than 3 years, its 20% with indexation benefits.

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