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Don’t Buy A House (Yet)

As you read this, you might be wishing that you graduated just a year earlier and could take advantage of the $8000 first time homebuyuers credit [3]. It’s not every day that Uncle Sam is willing to give you $8,000 for anything, let alone for something widely regarded as a fantastic investment.

But consider yourself lucky… buying a home within the first year or two of graduation can be a huge mistake for new graduates. My personal recommendation is that you don’t buy a home within five years of graduation [4].

This post is part of Bargaineering’s 2010 New Graduate Guide [5] series where I’ll share my insights and offer my financial guidance to the graduate class of 2010. This post is part of day 3, putting down roots at your first place.

The basic idea is that you don’t want to put down roots at a time when flexibility and mobility are so important. You are about to enter a period where your career can grow significantly in a few short years. To take advantage, you may need to change locations or change employers. Being able to move easily, without having to sell a home, will be crucial.

Another important point to remember is that in all the stories about how much a friend or a relative “made” on their home, they never talk about how much they paid out throughout the years. Homes are expensive. You pay insurance, property taxes, interest, maintenance, repairs and so many other costs people don’t mention. As a new member of the working population, do you really want to sign up for all that?

Wait a few years, you’ll be happy you did.

(Photo: overgraeme [6])