Buy or rent? (3-5 years)

[Eli Krav]

Hi all,

My wife and I will be moving to Baltimore, MD this summer after some time spent overseas. We were looking at renting a 2 bdr 2 bth for ~$1500 a month when I realized it might make more sense to buy a place. Because we want to start a family, we will probably outgrow a two bedroom in the next 3-5 years.

We have some savings tucked away including ~50k ready to be invested, and another ~$40-50k invested in various portfolios using robo-advisors (stocks aren't my thing). I am interested in building my own real estate portfolio when we move back. Unfortunately, multi-family homes aren't really available in the community where we want to settle down, so that's not an option.

In short, my question is: If we'll be in our next home for 3-5 years, is it worthwhile to rent or buy?

We could rent and invest our savings in a multi-family house to rent out on the side. Or we could buy a place for ourselves, and after 3-5 years we could buy a new place and either flip the first place, or rent it out after we move out... If we buy, is a single-family starter home a better or worse investment than a condo? Would one of those have better resale/rent value after we move out?

So many questions :)

Any and all insights are appreciated, thanks everyone!!

[Joe Norman]

I've seen a few comments about waiting for the market to "slow" and IMO that is foolish. I haven't ready one prediction from a serious economist that housing values will actually decrease, but rather that the rate of appreciation will slow as interest rate hikes take effect. That is to say, there should still be solid appreciation over the next 3-5 years, just not at the astronomical rates we've seen in the past 18 months. Therefor, if you have a 3-5 year timeline, I would absolutely buy and capture that appreciation.

Good luck and let me know if you have Baltimore questions!