Rent or Buy Apartment?

[Registration]

Hey gang:

I graduate college in a month and will dive into the real world soon. Very nervous and somewhat disoriented being that I am bombarded with all sorts of pressures left and right. I need a place to live and have found apartments not too far away from downtown, where I will be working.

In terms of the place I live, should I buy or rent an apartment?

Renting is fairly straight-forward and is a low-risk strategy. The place I am currently looking at is about a $1,000 a month for myself.

Buying my own property is quite an ambitious endeavor and is somewhat difficult. The reasoning for buying a condo / apartment / house is that the property appreciates in value and I'm paying mortgage instead of rent. Real estate in the city almost always grow in value over the long-term. I'll only have to make a down-payment and simply pay monthly mortgage payments. I could even get a roommate if I buy something more than one bedroom and have my roommate's rent go towards paying off my mortgage. Either way, when I decide to move, I can sell the property for a decent return and my mortgage payments would actually go to some use. The downside to buying a property is that it is quite expensive (~$300,000) and takes a lot of effort to purchase, finance, maintain and oversee.

What do you guys think? Any suggestions? What is the outlook on the housing market? Although the sector is on the down-turn, the median house prices have stayed relatively steady. Should I buy or rent? Any ideas would be highly appreciated. Thanks in advance.

[Dirac]

Firstly congratulations on your graduation! I'm not American so I can't advise you about the housing market there, but I would suggest you rent first. Renting gives you the freedom to move around and your lifestyle may change significantly in the next few years (mine did).

[Hater Depot]

At this stage in your life renting is probably the best choice, since you may move around a lot. I've done a lot since my graduation three years ago.

[atlasien]

I agree, rent. Resale possibilities are unstable and depend heavily on microconditions in the local housing market. But in most any market, two-bedrooms will hold value much, much better than smaller apartments.

Try not to spend more than 30% of your income on housing (rent). I believe this is impossible if you live in New York or San Francisco, but it's a worthy goal.

I would suggest depriving yourself and living below your means for a while in a cheaper apartment, or maybe with multiple roommates. Save up the money that would have gone to housing for a few years, and use it for something really cool like a trip around the world.

[minbo]

It also depends greatly upon where you are looking to buy or rent. In some areas, renting makes a lot of sense, in others, not so much sense. The less fluid the market, the less likely it would be a good idea to buy, unless you are planning on living there for a long time, or can afford to have the place empty for a while till you find a boarder if/when you move.

[kwak76]

It depends upon how long you are planning on living there. If you see yourself living there for 7 plus years I would recommend buying the property.
If you plan on living there for less than that than probably rent.

It is always good to develop equity at a young age which real estate can do but you have to be cautious because if you buy a property and few years later decide to move for what ever reason and can't sell the property on time your sitting on it and have to spend the money on it.

Rental is pretty straight forward. If I were you I would rent for a couple of years until you are sure that you want to live in that property for a long time.
If you want to invest in real estate for profit reason that's a whole different avenue.

[ZhuBaJie]

if you're not going to be living in the same city long (wherever it is you live), then just rent. but if you think you'll stay for at least a few years, then buy. it's a buyer's market out there right now. rates are low, and prices are down. yeah maybe prices will keep dropping, but one thing's for sure, you don't want to wait till the market recovers.