Housing Allowance: Buy or Rent

I am being appointed to a new church in June. We are very excited. The only point of stress we feel comes from the fact that the church offers a housing allowance instead of a parsonage. I think the housing allowance is a good thing, but it does mean we will be making some major decisions soon. The biggest decision will be choosing whether to buy or rent a home. In today’s economy, we are scared to buy, but at the same time, there does not seem to be many decent homes for rent in our future area. Add in an extremely attractive 5% interest rate, and an $8,000 first time home buyer tax credit, and we become very tempted to buy. The drawback is that we can not be sure how long we will be at our next appointment. We would like to stay for a long time, but we could get moved again in 3-5 years. So, buying a house now would be taking a risk that our house woud sell in the future.

Any advice out there?

house appointment

Tough call. Based on the experiences of your sister and your parents (and us!), you know that selling a house can be an ongoing, drawn-out thing. One possibility would be that if you were moved at a future date and the housing market hadn’t improved much, you could offer to rent to the incoming appointee.

We have enjoyed renting this past year. No yard work…if something breaks, make a call – and if it’s a big item and it’s not your fault – whew!…rent can be cheaper than a mortgage payment…and so on. With a house, there’s always the temptation to remodel (again, look at us…eeek!), or if you find a serious problem with the house after the papers are signed, ‘eeeek,’ again. Then again, it’s yours – you can paint, decorate, replace, install, etc., to your heart’s content.

If you like playing with numbers, find the average price of a rental in your new area, add in the attached monthly expenses, renter’s insurance, and any additional expenses…then compare that to your estimated rent, utilities, insurance, and anything extra you anticipate spending. If you think about hiring a realtor later on to handle the sale of the house (typically 6-7% of the selling price)…add all the money factors together and determine how long you’d have to rent vs. own to make it worthwhile. On the average, if you move in 3 years, consider renting. For 5 years, owning might be a consideration.

Oh, and if there’s any damage, er, lived-in wear and tear from having two active boys in the rental house, you lose your deposit. In a house that you own, you’ll be paying to get it into shape to sell it.

I have known pastoral families who have gone both ways. Either way could work for you. Just realize that if you buy, you could be a landlord in a few years! Good luck with your decision!