[John]

Real estate people: Is there a generally accepted turn around time for buying a home that you don’t want to stay in.

My son wants to get out of renting and buy but he does not want to stay in the state he would be buying in.

( he is there due to work and may be able to go remote in the future).

I know interest rates and home prices affect the outcome but what is too short of a time to buy a house then sell generally?

Thanks !

[Christine]

2 years to avoid paying capital gains on the profit

[Lori]

Really depends on the local market. Most areas are still seeing home appreciation well over 5% annually.

This question would be best answered by a local realtor with many years of experience in the area he would be buying.

[Serena]

In my 5th house that I’ve bought, have stayed anywhere from 11months to 4.5yrs in them. To short of time depends on the housing market you are in.

1. Never buy a house you don’t think someone else would buy because you never know if you’re going to have to sell and move.

2. Capital gains for a single person comes into play if you make 250k profit from your original buying price as a single person(500k for married filing joint).

I have bought my own ‘rental’ twice because I knew we weren’t staying long but fixed up the house while living in it.

I would not recommend buying a house you’re not going to live in for at least 2yrs.

[Penh]

At least two years to avoid paying taxes on the profit. If it’s completely unavoidable, at least a year so you only pay long term capital gains tax and you can deduct commissions for the realtor from the profit to reduce your taxable base.

We’ve had to sell in under two so we’ve had to learn this.

[Josh]

I think the length of time is generally 5-7 years.
Although, it highly depends on what’s going on in the market.

Right now I would STRONGLY encourage anyone NOT to buy right now.

But to recoup closing costs etc with general 3% house inflation.

4 years would be a bare minimum.

Although, when the market is super hot. You can sign a contract and never move in and make a profit. But today is not those times.

[Danny]

I really don’t like hearing that my clients want to sell in anything less than 5 years, conservatively 7.

2008 was considered the biggest real estate downturn in history. It took most markets a full five years to recover.

Taken into consideration closing costs, and you’d be still in the red in most markets up to 6/7 years after that downturn.

So, 7 years would be the most conservative break even or “green” number.

[Tricia]

He should keep current home and rent it when he moves.

[Joe]

Assuming the goal is to not lose money when he sells, then I think he either needs to buy low and flip ASAP, or buy and hold for the long term (7 years or more).

IMO, it’s not safe to buy and hold real estate in the short/mid term.

In addition to price, there are also transaction costs such as real estate commissions and closing costs that needs to be considered.

I bought a rental properties in 2005/2006 at the height of the real estate bubble and it took about 8-10 years before the prices recovered.

[Richard]

At least 7 years. Transaction costs are high.

[Andrea]

The 2 year rule is for investment property, not primary homes. so much misinformation in this comment section.

[Bethany]

You’d want to stay in a home at least five years to make it worthwhile, generally.

2 years to avoid cap gains, but it’s unlikely he’d amass much in cap gains in just 24 months.

[Chris]

I’m not sure what question you are asking. Are you asking what amount of time you would need to own vs rent to break even?

It depends on a lot of variables- local real estate tax rates, hoa fees, insurance costs and some known transaction costs – realtor fees (6%ish), interest costs, mortgage insurance protection(if applicable) and mortgage points paid.

In the near term consider no appreciation of the house. Compare to rents.

[Bill]

I bought a rental property in 2005, I was underwater for a long time until post Covid. I unloaded it for a nice profit In January 2022.

[Andrea]

You can calculate what you would gain or lose financially by comparing costs to rent for a year versus buying, including all
costs and estimating a modest increase in value.

if rents are lower than his mortgage would be then he should continue to rent, if his issue is $.

Why does he want to buy instead if rent?

[Jennifer]

I would also consider the cost of buying the home. Closing costs, down payment, will the house appreciate enough in the time to cover the cost?

[Mindi]

If he doesn’t want to stay there then I don’t recommend buying.

[Author]

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