Just Out Of School...How Long Should I Rent?

Abby just moved into town and doesn't know how long she should wait before buying a house.

QUESTION: Abby wants to know how long she should rent before buying a house in a new area. She’s only going to be there four years.

ANSWER: Pull two multiple listing statistics from the local real estate agent: find out the average annual appreciation over the past 10 years and the average days on market.  For example, if the houses are going up 3% a year and it takes them six months to sell, you probably don’t want to buy in that area because you’ll probably lose money and have a hard time selling.  If they go up 15% a year and sell in a couple weeks, then you should buy because you will make money in the four years that you’re there.