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[tortugaphd]

I bought a house in 2009, the second year of my tt appointment.  It seemed like a wise decision at the time, but now that I'm not so certain I want to remain in this job long-term, it feels like a burden.

For people who have had the experience of selling a house while changing jobs, what did you do?  Did you keep the old house for a while and rent it out?  Also, what are the logistics of house-hunting in your new town while still owning the one in the town you are leaving (is it hard to get a bank to approve a mortgage that way)?  Any information or advice would be appreciated.

[lasquires]

We sold a house and bought a house when we came to our current location so that I could go to grad school. We moved in 2005 from the house that my husband owned and continued to rent it to his old roommates for a year. In  the summer of 2006, we went back, fixed up the house (which had been more or less trashed by the roommates--never rent to friends, always collect a security deposit), and put it on the market.

The housing market in that region was beginning to go a little sour, even though we were two years ahead of the implosion of 2008, and our realtor was overly optimistic about the asking price. It took seven months to sell it, during which time we were carrying both a mortgage payment and the rent payment in PhDville. That was hard. We did not start looking for a new house until we had an offer on the old one. When it sold, we did make out like bandits, as home values had doubled in that area and hadn't yet come all the way back down to earth when we got an offer. We have almost 45% equity in the house we bought in PhDville in 2007, though I'll be happy to just get our initial investment out of it when we sell to move to TTville or VAPville or Postdocville or whatever. The housing market isn't hasn't been as volatile here, but no one's making money on it, that's for sure. When we do move, our plans are to sell this place, invest our nest egg elsewhere, and rent for a couple of years until we land in a place we can see ourselves staying in long term. Frankly, we'll be relieved to be free of lawn and air conditioner maintenance for a little while.

Here are the lessons I learned from that experience:

1) Owning a rental property in another state is stressful, as you have no way of regularly checking up on the property. If I were to do this again, I would have an agent of some sort in charge of managing the place and collecting rent payments. If rental prices in your area are higher than your current mortgage payment and if there is a chance that home prices will rise in the next couple of years, it may be worth it to hold onto the property.

2) Many lenders will not give you a new home loan while you are still in your current mortgage. Ours wouldn't, and we have credit scores in the 800s. If you choose to sell your old house, some sellers will allow you to place an offer on a new house contingent on the sale of your old house. In a bad market, some sellers will be desperate enough to wait until that happens, however...

3) You never know how long it will take to sell your current house. Think very seriously about what it will cost to carry the expenses on your current property unrented and make sure that's factored into your budget. We were able to easily cover seven months of carrying costs with the proceeds from the sale, but this will not be possible for everyone, and it was hard to get through that seven months without a lot of liquid assets. If you choose to try to buy another house while you're selling your current one, keep carrying costs in mind. You don't want to get in trouble with one mortgage after you've taken on another.

The right choice for you is going to depend on a number of factors. If possible, talk to a real estate professional who knows your local market (both for leasing and selling).

[tortugaphd]

Thank you, lasquires.  It really helps to hear from someone who has gone through this experience.

[schoolmarm]

I am going through this right now.  The rules have changed quite a bit lately.

1.  Banks don't do swing loans or bridge loans anymore (this was a loan to get your down payment before you sold your house.)

2.  You most likely can't do a second mortgage (or take out equity) while you house is on the market, or if you house has been on the market in the past 6 months, or if you are not occupying your house.

3.  It's REALLY hard to get your debt/income ratios in place if you haven't sold your house.  I would qualify enough for getting a house in a neighborhood I would be shot in and I have little other debt, good credit, etc.

4.  You can't count income from renting your home until it shows up on your taxes--about two years later for most banks, thus you can't offset the debt from your mortgage.

SIGH...

I found the house that I want to buy, but because my buyers backed out, I will be staying in my extended stay hotel for the rest of the semester.  All of the rental places around here want a 12 month lease. I thought that my house was sold.  ARGG!  On the bright side, there was a nibble last week.  I have a great house in the hot neighborhood of the best school district around.  It is priced a couple thousand below what I paid for it and has new "almost everything."  It SHOULD sell.

It has been very hard to get repairmen in, carpet cleaners, etc. from 500 miles away.  My realtor is a gem and has handled most of it.  I can't imagine trying to be a landlord from this far away. 

Oh, and my furniture is still in the house so it will show better.  I wish that I could "rent-to-own" a house here.  I'm missing my piano and books quite a bit...and my wireless router!

Good luck with getting yours sold!

[tortugaphd]

Thanks, schoolmarm!  I have to admit, hearing these stories is making my job here seem rosier and rosier--if only because I don't want to go through the house-selling process.  I love my house for what it is in so many ways, but when I think that it may be a liability if I ever want to change jobs, it looks more like a ball and chain.

[anon99]

I would suggest listing your current place now and renting.  If you get an offer and move, then you have a more flexible moving date.  In your new town, I would also rent for a while to see what areas you like and if you like the new job long enough to stay. 

If you are in an area for a short period of time, buying and selling a home really doesn't make economical sense.  Having said that, I still rent out a place I bought as a grad student; BUT I have a friend who manages the place (she manages places part time).  There is no way I would have kept it as a rental, if she wasn't there.

[tortugaphd]

Thanks for the tip, anon!  I hadn't thought of that plan of moving out now, renting a place, and listing my house, but it makes perfect sense!

[pedanterast]

"We have almost 45% equity in the house" ... "I'll be happy to just get our initial investment out of it when we sell"

These two statements are highly contradictory.  What am I missing here?

I thought this article made some good points:

http://moneyning.com/housing/the-five-year-rule-for-buying-a-house/

[lasquires]

"We have almost 45% equity in the house" ... "I'll be happy to just get our initial investment out of it when we sell"

These two statements are highly contradictory.  What am I missing here?

I thought this article made some good points:

http://moneyning.com/housing/the-five-year-rule-for-buying-a-house/

That was awkward phrasing on my part. I meant that I will be happy to break even on the house, to get our down payment + principle paid.

[oldadjunct]

"We have almost 45% equity in the house" ... "I'll be happy to just get our initial investment out of it when we sell"

These two statements are highly contradictory.  What am I missing here?

I thought this article made some good points:

http://moneyning.com/housing/the-five-year-rule-for-buying-a-house/

I think it was Market Place, NPR, last week that pointed out the 5 year rule should be stretched to 7 years.

[pedanterast]

I think it was Market Place, NPR, last week that pointed out the 5 year rule should be stretched to 7 years.

Based on the current economic conditions, or?  I think a larger issue is that people consistently "misoverestimate" how long they will want to be, or be able to be, in the house and/or area.  At least that has been what's happened to me all four times.  Made out OK the last time, got killed twice, and the fourth one was a wash because the divorce settlement made it that way.

Each time I was "committed" to staying five years or so.  Actually stayed:  15 months, 10 months (that was the D-word), almost five years (still got killed), and 3 years 8 months.  That last one worked out pretty good but that was mostly because I took a fairly large gamble on a 1-year ARM (which I would not have done had I not had the means to pay off the mortgage if things went the other way) and it went my way. 

The good news is that even though I got hammered financially in terms of the house/condo itself, not staying as long as I thought was always the result of some other economically positive factor. 

[tortugaphd]

I think it was Market Place, NPR, last week that pointed out the 5 year rule should be stretched to 7 years.

Based on the current economic conditions, or?  I think a larger issue is that people consistently "misoverestimate" how long they will want to be, or be able to be, in the house and/or area.  At least that has been what's happened to me all four times.  Made out OK the last time, got killed twice, and the fourth one was a wash because the divorce settlement made it that way.

Each time I was "committed" to staying five years or so.  Actually stayed:  15 months, 10 months (that was the D-word), almost five years (still got killed), and 3 years 8 months.  That last one worked out pretty good but that was mostly because I took a fairly large gamble on a 1-year ARM (which I would not have done had I not had the means to pay off the mortgage if things went the other way) and it went my way. 

The good news is that even though I got hammered financially in terms of the house/condo itself, not staying as long as I thought was always the result of some other economically positive factor. 

I'm glad everything worked out for you in the end.

[clean]

Owning is not for everyone.  It is not a sin to sell now and rent.  It would give you mobility and owning is not helping your mental state now.

See what it would cost you to get out.  Estimates are free. 

[compdoc]

tortugaphd, Don't move out until your house is sold. But if you are thinking of leaving town, then you could put your house on the market. Then rent when your house sells.

However, house sales go up in March through July, so you probably shouldn't list till then. We did. Bad move. We didn't even WANT to sell the house till March. But by March the house will have been on the market for over six months.

[matand]

Definitely rent!  We are current renting our house to others and have found a condo to rent for us.  We are actually saving $$, as the condo costs less to rent than our mortgage!  Less pressure to make everything happen at the perfect time so that you can move out/move in smoothly.