Should I or shouldn't I, buy and/or rent?

[KAISMOM]

Background: Single mom, self employed. Last year I netted after expenses 68k, this year will be 50k. I'll likely have 50k as a DP (including the maximum sep ira funds should I need it). Fico scores are 763-783. Same time next year I should have under 3k debt in student loans. DTI ratio is very low. I'm purposefully not buying or leasing a car for now to look better on paper. (Eventhough I'd like to buy/lease now)

Currently live in So Cal. Market isin't good, prices too high. I need to stay in area for the next 5 years, then I'm gone! Do I buy in So Cal knowing I'll sell in 5 years time? Do I buy in Nor cal, and rent out knowing I'll likely be moving to the area in 5 years?

Concerns: prices will go up, up, up, (or, interest rates)

Advantages to buying: write off certain expenses as homeowner, more freedom to alter, make changes as needed which as a renter I'm limited. Continuing to raise my son (13) but in a place I can more my/our own. Buying and renting out property while market home values go up (best case scenario)

Advantages to renting: Continue to save money, and invest monies for DP for future purchase, riding out market fluctuations. More freedom to move about as a renter, and to buy in a different market area (Seattle, Portland)

Opinions, recommendations greatly appreciated!

[topa]

My 2 cents. You are unsure of where you will be living in a few short years. Home prices don't always go up - so don't buy thinking of it that way. With rates so low - they are likely to be much higher in 5 years. Higher rates = less buying power = lower prices.

I'd say - buy when you are ready and you are looking to settle down for the long hawl.

[ShanetheMortgageMan]

If you feel like you will own this home for awhile (even after you move) then I'd lean towards buying... but if you are going to try and dump it before you leave this area then I'd stick with renting.  Tough to say where values will be 5 years from now, I'm a little concerned that the prices keep going up... I think we'll be leveling off soon.  In the long run it'll be a good investment, so if you are serious about renting it out after you move back up to NorCal then you'll have an asset you could sell to fund your retirement.

With your income next year, you'd probably be looking at around a $325k sales price max.  With your income this year you could be looking up to $400k.  On a $325k sales price, the interest + property taxes if you itemize won't be much more than your standard deduction, so may not give you as much of a tax break as you'd think.

If you really want to be a landlord and get some cash flow, I'd look for a 3-4 unit rental property in Portland, Phoenix, Charlotte, or Austin.