Whether you've used public schools, private schools, vouchers, or any other means necessary, you're now working on your residency at The Medical College of Wisconsin, and you need a rental property for while you're in the Milwaukee area. Great. Just like navigating the best schools, finding a suitable home is key for you and your family. Many residents will purchase a house and then sell it again, but let's take a look at some of the numbers involved so that you can make a decision based on your needs.
Buying a house will cost you some decent money. Houses near Froedtert cost anywhere from $100,000 to $500,000. If you have a family, you're going to want one that will cost at least $150,000. If you want a nice yard for the kids, then expect to pay closer to $200,000 for a three-bedroom ranch in the area. Sure, you can go all-out and pay Wauwatosa prices in Ravenswood, but since you won't be making your true salary until later on, it's a good idea to stay out of that kind of debt right now. Taxes in Milwaukee for a $200,000 ranch near Children's and The Medical College will run over $4,000 per year. Most of the houses will also need some work, and you'll never get 100% back on any updates you make, but let's just say you spend around $1,000 a year on that. Now your "investment" is starting to look a little more like a pit. Add in closing costs ($2,000) and interest payments ($4000/yr) for a house you'll have less than a four years, and it starts to make less and less sense, especially since you pay more in interest early in a loan, something the realtors and bankers seem to overlook.
After several years of use, you're going to have to sell the place again. Paint might not be enough to get it ready to sell. What if you need a $20,000 roof? And because you'll be busy getting ready for the real job of providing for your family where your career awaits, you won't have time to sell it yourself, so you can be sure to spend around $12,000 on a real estate agent to do the selling for you.
So, let's say you spend four years in Milwaukee going to school. You bought a $200,000 that stayed stable in value (because that's what they do in the area), spent about $18,000 in taxes, $18,000 in interest and closing, $4000 to $20,000 in maintenance, and then $12,000 in order to sell it again. Best case scenario, you'd get about $150,000 return on your "investment" of $200,000. Basically, you'd be paying $50,000 to live in the house for four years. What if the Emerald Ash Borer gets to a few trees on your property? $10,000 to take them down (and this is a REAL problem in WI right now). A new roof? $10,000.
I live near The Medical College of Wisconsin, and I've seen resident after resident throw money away in this fashion. Lots of new roofs, new rec rooms, and new debt for no real reason, since it's a three to four year stint, and that roof will last at least twenty years for someone else. Those people are spending as much as $100,000 on renovations for a house that will make another buyer happy but will never return the investment.
Instead of buying, you could rent the same $200,000 house for $2000 or less a month. The total for four years would be less than $100,000, but it would be locked in at that amount. I know, someone in the back of the room wants to discuss all the equity you build because you heard Suzy Orman talk about it. Yes, you might pay $1000 each month into the paying down of the debt of the house, and sure, it will be that much more your house when you sell it, but you paid the $1000 per month, so it's not like equity is built by magic. In an area where home values stay fairly constant, building equity in buying a house you'll only own for a few years is a total myth. You are an intelligent person who does not believe in myths, only value for what you spend.
If you want in on the best rental home available near The Medical College of Wisconsin, take a look here: http://satisfamily.com/resources/people-and-places/291-homes-for-rent-near-medical-college-of-wisconsin .