rent vs buy near Philadelphia (Penn: for sale, rentals, insurance)

[nd2013]

I am married with a newborn and will be attending UPENN for the next 4-6 years as a doctoral student. We found a few rentals along the Main Line, Chestnut Hill, and South Jersey but they range $1,700 - $2,000 plus, and may not be optimal for our situation. We currently own a house with a large yard and will need something of comparable size or will have to find storage, which can run >$100/month. We found that our current home will be a good rental property so we will keep it and rent it.

Does it make sense to purchase an investment property in the Philadelphia area to live in and enjoy with my family while attending school for the next 4-6 years and then hold on to it as a rental property when we move? If I am going to spend $1700+ on rent for 4-6 years, would that be better spent putting equity in a home?

Based on our desirables (see below) we really like the Collingswood/Haddon-Township area. Would buying a home in this area for $200,000 - $250,000 be a good investment for a rental property in 4-6 years? Being able to walk to the PATCO is important for me since my wife will have the car. The high property taxes in these towns makes the investment property idea *seem* like a bad idea to me, but I am not from the area and thought I would get other opinions. Any suggestions on other places to consider that would meet our needs and offer convenient public transportation to school would be appreciated.

Desirables:
* Home: 3 bed, 2 bath, backyard, garage or parking spot
* Budget: will be comfortable with up to $2K/month payments (includes mortgage, taxes, insurance)
* Walkable: Within 15 min walk of train, parks, and downtown area
* Safety: I will be busy with school and want to know that my wife and child will be safe and able to enjoy the community. My wife goes for long walks every day so a safe area is a must
* Transportation: I will leave the car with my wife and need to live within walking distance to public transportation that can get me to school
* Good school district: We plan to move in 4-6 years, thus, this is not an issue for my family. But, it may be when we do move and try to rent the place

Note that being able to afford a house is not an issue, neither is being able to upkeep it while attending school.

[rotodome]

In your situation: definitely buy.

[LHM]

Originally Posted by rotodome

In your situation: definitely buy.

I agree. Buying seems like a no-brainer given your situation. Interest rates are ridiculously low, take advantage of them.

[nd2013]

Thanks for your responses!

[templeu]

Interest rates are low, so if you can find a home you like where your monthly mortgage will be manageable - then certainly go for it. However, I'm not sure how much of an investment the home purchase will be. I've been in the area for about 4-5 years and home values have been fairly stagnant (I check real-estate sites regularly). We also just had our house re-appraised (so that we could refinance at the current low rate), and despite numerous updates, our appraisal came back 2K less than the original purchase price. Who knows what will happen in another 6 years, but if you are purchasing in hopes of making a return, that might be ill-advised. For a 200-250K house, you should plan for at least $500/month in taxes. Most of the homes that I've seen for sale for 250K have taxes in about the 7-8K range.

[sj08054]

I think it's a good idea to buy if you are in a position to but you may not want to buy in SJ if your plan is to rent it out later on. A $250K house is not a good rental property in NJ. I would stay in the PA side

[frankgn87]

A house is SJ is just as a house in PA for rental properties.. Tax structure is similar as is possible renters. I also agree that a buy is the way to go..