Rent or buy? (Salem, Dallas, Albany, etc..) (Monmouth, Independence: real estate market, apartments)

[jinx98521]

Hey everyone. My family will be relocating from TN to OR within the next 2-3 months (finally! Yay!). After much research, we've decided we'd like to live in/near Salem (Dallas, Albany, etc..), if possible. The problem is that I can't decide whether we should rent for a year once we get there or if we should buy a house once we get there..

Here's a little bit about us/our situation:
1. We are a family of 4. (2 adults, 2 kids)
2. We have a German Shepherd dog.
3. We will be receiving approximately $12k-$13k from selling my house in TN.
4. We will have to choose between using the money to pay off my car loan or using the money as a down payment on a house.
5. We currently have our own renters insurance, which covers our German Shepherd.
6. My credit score is around 690-720. No late payments of any kind on my credit report.
7. My (live together) boyfriend is in the process of filing bankruptcy (debt from a car wreck with no insurance).
8. I am successfully self employeed with a business that is growing more & more every year (online business), but my BF will need to find a job.
9. If we pay off my car loan and rent a house, we will need a house with a fenced in yard. 2-3 bedrooms. $700-$850 a month.
10. If we buy a house, we will need a fixer upper. 3+ bedrooms. Preferrable price range up to $90k (assuming I qualify for the mortgage loan and there are financable houses available in that price range- Oregon real estate is more expensive than TN).

I was thinking we could pay off my car loan, rent for a year while we save up money for a down payment on a house, then buy once we know the area and have less debt (car loan). If we do that, we can most likely afford a bigger mortgage.. However, if we rent before buying, my kids might have to transfer schools AGAIN (moving across country, then moving across town after a year).. Also, Im worried about finding a rental that will be big enough for all of us within our price range (i need a space to work at home), will accept our German Shepherd dog, and will overlook my boyfriends bankruptcy.

If we buy a house, my kids can get comfortable in their school without having to worry about leaving again, The dog issue won't be a problem, my boyfriends bankruptcy wont be a problem (because I'll be the one receiving the mortgage loan), monthly payments are cheaper, we can fix up the house however we want and get settled in our own home.

Do you think we would have a hard time finding a rental? I'm afraid of scams and loosing money to application fees. I'm also worried about landlords keeping our security deposit even if we take great care of the property (that happens in TN all the time. "Refundable" deposits are never refunded).. It also feels weird to go from being a home owner to being a renter.

Are there houses available in our price range near the Salem/Albany area (to buy)? We would be open to buying a mobile home in a nice mobile home community (or preferably on it's own lot), but I doubt a mobile home park would allow my dog to live there.. We are also open to foreclosures, as long as they aren't in terrible shape. I appreciate you taking the time to read this, and I look forward to any advice you can give me. I have never relocated to a new state, so this is all new to me.. I would also love to hear your relocation experiences, if they're similar to our situation. Thanks!

P.S. Are there certain areas we should avoid? High crime, drugs, gang activity, etc..

[SoonOregonSoon]

Hello, I was reading your post and it sounds like Silverfall will step in to answer soon.

One suggestion that I have though would be to contact an approved housing counseling agency. If you look up the HUD (Dept of Housing and Urban Development) website, they offer a list of approved agencies to contact. Most of them offer free budget and debt analysis and can give you some suggestions and advice on what you can and can't afford. It already sounds like you've run the numbers but they can give you a more experienced insight on it. Some of the better counselors can give you really good insight on the pros and cons of renting and buying tailored to your situation. Their opinion would also be unbiased. Some of the counselors are good, some not so good. you can always call another agency for a second opinion. Just ask for pre-purchase counseling when you call.

Also, if you or your BF are veterans, Oregon has more benefits than most states for vets. Just look up the Oregon Dept of Veterans Affairs. Jobs searches, education, loans etc.

You sound motivated! I'm moving there this summer myself.

[oregonwoodsmoke]

With a German shepherd in the family, plus the bankruptcy, you'll have an easier time finding a place to live if you can buy. I do not know if you can find a place in your price range, but it would be easy enough to look at prices of real estate online.

I prefer Dallas. Dallas is agricultural. Albany is blue collar working class and slightly grubby, but more shopping and facilities. Independence and Monmouth are very small. Those are the towns where you might have a chance to find something you can afford.

The trouble with buying is that you are stuck where you buy. On the plus side, though, if you buy a fixer-upper and do a good job of it, then if you have to move, you should be moving with slightly more cash for the next purchase.

I recommend against a mobile in a park, because you will be paying substantial park rent and the owner of the park can decide to kick everyone out and put in houses (and that does happen), so there you are with a mobile home and no place to put it.

A mobile on an acre or so can be a good purchase if you can find one that is reasonable price and new enough to be finance-able.

[Silverfall]

Hi Jinx,

A couple of thoughts...

1) Since your BF is declaring bankruptcy he can't be used to help with a mortgage for 2 years (for an FHA loan) so what you can afford will be based just on you.

2) Since you have your own business, they bank will use a minimum of 2 years of tax returns and average those to determine what you qualify for. If your business is continuing to grow, having a more profitable year count toward your qualifying dollar amount would be very helpful so in that regard renting for a year would be good. You will want to qualify for more.

3) $90,000 will get you nothing in Salem proper. Homes in this price range are cash only as they don't qualify for financing. You will be hard pressed to find a property that qualifies for financing in Albany or Dallas for that price as well. Possible, but they are few and far between.

4) Just because you want a fixer doesn't mean the bank will let you buy one.

5) Dallas qualifies for USDA loans which are 100% financing loans. Salem does not qualify, and I don't think Albany does. I think doing USDA in Dallas might be the best option for you. You could pay off your car, but then you would need to wrap your closing costs into the home purchase. Finding a house would be seriously problematic though at $90,000.

The rental market is tight out here and so is buying a house in that price range.

[oregonchickfan]

If you expand your search to Willamina and Sheridan, you will get more home for the money. IMO. Although I am not in the position to buy once I relocate, I still look online and keep an eye on the real estate market. I found several decent homes in the $90k range. Of course, what's ok to me may not be for you.

[oregonchickfan]

Originally Posted by Silverfall

5) Dallas qualifies for USDA loans which are 100% financing loans. Salem does not qualify, and I don't think Albany does. I think doing USDA in Dallas might be the best option for you. You could pay off your car, but then you would need to wrap your closing costs into the home purchase. Finding a house would be seriously problematic though at $90,000.

I was not aware of USDA loans. You may have just inadvertently helped in solving my issue as well. Thank you. I will be researching this option.

[Silverfall]

Originally Posted by oregonchickfan

I was not aware of USDA loans. You may have just inadvertently helped in solving my issue as well. Thank you. I will be researching this option.

They have minimum property standards so keep that in mind when looking.

[jinx98521]

Thank you so much for the info and advice! I think I'm leaning more towards renting for the first year. Then by next year when I apply for a mortgage, my income will be higher (because my business is growing yearly). That way we can get to know the area better (before we buy) and we will qualify for a higher mortgage... I'm just hoping we will be able to find a rental that'll accept a German Shepherd. Hopefully having our own renter's insurance will help.

[oregonchickfan]

Originally Posted by jinx98521

Thank you so much for the info and advice! I think I'm leaning more towards renting for the first year. Then by next year when I apply for a mortgage, my income will be higher (because my business is growing yearly). That way we can get to know the area better (before we buy) and we will qualify for a higher mortgage... I'm just hoping we will be able to find a rental that'll accept a German Shepherd. Hopefully having our own renter's insurance will help.

I have an 11 year old American Pit Bull Terrier, so I feel your pain. If you're willing to look outside of Salem, I know someone living in the Chardonnay apartments in Sheridan, and she has a Mastiff. You may try there. Although not ideal, that's on my short list.

If you do find someplace, please feel free to share.

[oregonchickfan]

Originally Posted by Silverfall

They have minimum property standards so keep that in mind when looking.

Thanks, I will. I plan on calling around to get more information.