Does the Five-Year Rule Still Apply to Home Buying?
The five-year rule applies to those planning to live in a home for less than five years. Some have said if this is the case you shouldn't buy a home, but instead you should rent. However, this rule may not apply anymore.
The five-year rule used to be more common when people didn't move as often for work or personal reasons. Today, people move more often than they used to, but that doesn't mean they should just rent instead of own. Here are some of the ways you can keep the five-year rule from applying to you.
Pay Extra on your Mortgage to Build Equity
If you know you won't be staying in the home you own for five or more years, you can build equity by paying extra on the mortgage. This can help make the transition to a new home easier and with appreciation, you may just get more out of your home than you thought possible.
Become a Landlord
One of the easiest ways to ensure the five-year rule doesn't apply to you is by becoming a landlord. If you need to move out of your home, you don't have to sell it. Instead, you can rent it out and keep it as an investment property as you find a new primary residence.
Buy Low, Sell High
Some people make a living flipping homes and you can do the same thing with a home you only plan to live in for a few years. Instead of buying a turnkey property, why not buy a property needing some work. You can spend a couple months renovating the home, enjoy it for a few years and sell it for far more than you paid for it and put into it. This is a bit of a longer version of the flipping process, but can help you get the home you need and make money off of it when you sell it.
You don't have to live by the five-year rule and just rent a home because you don't know how long you will stay. Instead, use these helpful suggestions to ensure you get more out of the home and you don't waste your money renting.