Should I buy or rent my second house?

[James Smith]

Hi everyone, not sure if this is the right sub-forum so please point me in the right direction if it isn't

I own a home in Philadelphia that I purchased a few years ago and unexpectedly have to move given that I lost my job, I still owe 600K on that home and am planning to rent it out. I had initially bought the house with a physician loan (zero down, no PMI). I am moving to northern VA and was initially planning to rent but now I'm wondering if it's worthwhile to purchase another house using a physician loan given that renting a decent 2-3 bedroom home in that area is around 4K. I checked around and I would qualify for another physician loan as long as I am living in it.

Just some other info, my wife and I make a combined 500K (I work full time she works part time) but also have about 500k (interest rate 3.5%) combined in student loans

Is it a terrible idea to purchase another home using a physician loan? I figured that prices in northern VA are quickly increasing and might have value to buy rather than rent.

[Kevin M.]

Maybe a lender can chime in for the specifics behind a physician loan, but the general rule of thumb is three-five years for purchasing. In other words, if you plan on residing in a home for at least three years it TYPICALLY makes more sense to buy. 

Remember what you're paying for when you rent; risk mitigation (cap ex/market downturn) and the ability to leave. You don't want to bet against the market, and if you are signing a new employment contract and you are confident you will be residing in your new home for a few years then you should probably buy. You will make out better financially in the longrun if you do your homework before closing.

A don't like when people say renting is "wasting money" because it's really not. You're just paying a premium to take on less risk and have more liquidity. If you don't need these two things-then buy.