Planning on renting rather than buying.

[Michael Avillion]

My wife and I and newborn are being moved to El Paso for “at least” a 3 yr assignment with the Army. I am an Army physician and was told by “big Army” I could easily extend to a 6yr assignment if I desired. 

We have 30K in liquid cash as of now, 20K locked up in I bonds that I plan I selling July next year after maturing. 

Our plan is to rent for 1 yr, see how we like it, and if so then extend to 6yrs and buy. I had also thought about month to month but that may be hard to swing.  My worry is the time crunch at the end of our lease, so I would rent a place where I can go month to month at end, or get a 6 month and go month to month then. 

The market seems too unpredictable right now to buy and Id like to have more cash on hand as well. 

I appreciate any thoughts on our plan. 

[Bryce Jamison]

I like your plan. Renting in an area before buying gives you a chance to see if you even like it. Maybe you like the area, but want to live in a better neighborhood 10 minutes down the street. You could even do a 6 month lease instead of year, but with a newborn 1 year could give you more time and not put you on the clock. Plus if you buy a house right away and want to leave after 3 years you may not have enough equity to cover realtor fees when selling especially if we don't see as much home appreciation over the next few years like we've become accustomed to.

Yes, paying rent pays someone else's mortgage down, but your essentially paying for flexibility. It's kind of like insurance.

As far as the ideal time to buy a house, I'd assume we continue to see home prices come down a few % points over the next several months, but as interest rates continue to rise I'd bet you see your mortgage payment be about the same. I don't know El Paso though, so this may not be true for the area.

Good luck!!!