Investing in SE Michigan (Detroit, Ann Arbor) and suburbs

[Maxim S.]

Hi Everyone,

I am in the following situation: I work in Ann Arbor, MI, have a stable job in IT and everything is fine, have family with kids. I pay about $2300 in rent monthly and plan to spend about 2-2.5 years in the area and then will, probably, move South (NC). I am thinking about purchasing a property in SE Michigan (Detroit, Ypsilanti and surroundings) this winter, which will be my primary residence for the time-being (2-2.5 years) and then sell it or rent it out. I can put down now about $30K. As I am a newbie to RE, I decided to ask for advice from respected community:

What would you do in my situation (for the course of next 2-2.5 years):

1) Rent for the following 2-2.5 years and try to save money;

2) Purchase a property, which needs rehab costs to make it livable and move there;

3) Purchase a SFR with 30-years mortgage.

4) Do something else.

Any advice is highly appreciated.

Thank you.

[Travis Biziorek]

Nobody can tell you what you should do. That's a very personal decision based on a lot of factors you can't fully communicate. But here are some initial thoughts.

2-2.5 years is not a long time. Buying a home with the idea of selling it (at a profit) is more of a gamble than a strategy unless you buy something with the intention of doing a live-in flip. That means renovating while you live there. Trust me, this is extremely taxing on your family (I've done a live in reno). 

But if you're simply trying to buy and hold for appreciation for a 2-2.5 year period of time, it's a bit risky IMO. What if you can't sell the house for more than you paid? I suppose you could rent it, sure. But what would you do about a down payment for your new primary house in NC? Would you rent again? Not sure if that would make a ton of sense.

If you know you're going to move in just a couple years, I'd save as much as you can now. If you're itching to get into real estate investing, buy a modest home when you move to NC so you have cash left over to invest.