Buy or Rent

Entire webpages are dedicated to helping people figure out whether to buy or rent. However, my circumstances are unique.

Reasons to buy:

• I would buy with cash, so there would be approximately no closing costs.
  
• If I keep the purchase to just half my net worth, then the risk is not so big.
• I save about $6,000 per year in rent costs.
• I would have a home that I am free to play with, modify, practice my carpentry skills, paint murals on the wall, make lots of noise, be less bothered, totally pick my own housemates, accumulate possessions, etc.
• Option of renting to earn about $300 (fairly conservative estimate, say one housemate in a 2 or 3 bedroom).
  

Reasons to wait:

• Risk: Value could fall, or I could end up leaving so soon that the house is more hassle than benefit.
• Maintenance would likely be around $500/year. (excluding major renovations, whose value most likely would be regained in the sale)
• Taxes of about $1000/year.
• Hassle with roommates.
• Higher utilities if I don't get lots of roomates, maybe $200/month average with internet.
  
• Greater distance to school OR paying up $1500 per year for parking + maybe $500 for driving costs, which would make distance mostly irrelevant.
• Maintenance hassle.
• Any possessions I accumulate to furnish the house now could be a pain to deal with when I move to the next place.
  

Summary without a roomate:

• Annual savings = $6000, annual costs = $4-6,000, depending on whether I'm far enough to buy parking and drive much. Savings: 0 to $2,000.
• Lots of fun, a whole house to myself, easier to host people, throw loud parties, invite a friend in transition to live with me a few months, sleep in great peace and quite, play house.
• Lots of hassle: I won't always want to deal with maintenance.

Summary with a roomate:

• Annual savings of about $4,000, midrange estimate.
• Less freedom to rule the house, but necessarily less fun if the roommate is excellent.

Bigger investment picture: Chances are good that the housing market will rebound somewhat in the next few years. To be more abstract and specific, if I buy a house in a particularly crappy neighborhood, there is the potential for gentrification, led by me, to drastically increase the value. The value of a house in a swanky neighborhood, by contrast, has lesswhere to go but down.