Help a Reader: Buying a Home, Round 2

Here's an email I recently received from a reader:

I have been following and reading FMF voraciously since August 2010, but have just been lurking to this point without jumping into the comments section.  I appreciate the insight from FMF and the FMF community on my way to financial success.  My story is fairly similar to a question posted earlier, with a few different variables.  I’m a 25 year old male with a degree in construction engineering management working for a Fortune 500 contractor on the west coast.  I graduated college from a 4 year in-state university with zero debt thanks to equal parts from scholarships, working, and assistance from my parents.  I am approaching three years working with this company and am currently making ~$70k/yr.  I have the following amounts saved:

• $90,000 - Stock Brokerage- individual stocks, mostly small cap value stocks I’ve selected (I’m a student of the Benjamin Graham, intelligent investor style)


• $50,000 - Savings Account- (not getting any significant interest in this , but I’m saving it for opportunities to purchase stocks as the market drops or to purchase a house/land


• $40,000 - 401k- Fortunate to have great company matching program, but the fund options are not great.  Most have expense ratios in the 1.00-1.50% realm.  Would love to have index fund options, but not available presently.  Currently contributing 9%, but I’m considering dropping down to 6% to receive maximum amount matched due to lack of index fund options


• $30,000 - Roth IRA- Invested in Vanguard Target Retirement fund mainly composed of Vanguard Index style funds.  I started investing in my Roth at 18 years of age for less than max, and have maxed it out at $5k/year since I began my career


• I own two vehicles outright, a ten year old 4x4 pickup I’ve been driving since 2004 and a 1997 sedan purchased for commuting.  Both are over 100k miles


• I currently live with 3 friends in a rental house and my monthly housing/utility expenses average $500/month


• I maintain a budget and track my spending with goals of saving $20k annually plus the $5k for Roth and $7.5 k withheld for 401k

My question is, I’m getting to the point where I’m ready for my own living space and coupled with the housing price tumble and low interest rates, I’m considering purchasing a home.  I’m looking at smallish short sale houses in the 1,000-1,500 SF range that need some repairs which I would do myself priced between $100k-$150k.  Most of these homes I’m looking at are selling for 50-60% of the value they sold for during the housing boom.  I estimate the total monthly expense for the house (mortgage, taxes, insurance, utilities) will range from $1,000-$1,300 /month.  I would plan on living in the house with my girlfriend (where my share would be reduced to $700-$1,000/month) and possibly an additional friend (my share would be $300-$600) to reduce cost.

The issue is that although I haven’t needed to relocate yet, I’m expected to move for work.  I feel like it’s a great time to buy, my only hesitation is this possibility of moving.  I feel like worst case scenario is when I’m selected to move, I could hire a property management firm and should be able to rent it out for greater than the monthly mortgage, property tax, etc., and live in the home again when I return near company headquarters.  Or, the house will have appreciated and I can sell it for a profit after making fixes to the place and (hopefully) a housing market turnaround.

Do you have any thoughts or guidance for me in this situation whether I should buy or continue renting?  Or, general advice on other items I mentioned?

What's your advice for him?

Comments

[Strick]

Holy Cow, you've saved more money than you've made since graduating from college. You obviously don't need to get into the pains of rental property unless this is something you really want to do (some people love doing this stuff)

I've always looked at the pains and expenses of buying a home balances out with the gains on average. So the only reason to take on the risk of buying is so that you own the place, so you can have a home no one ever make you move from.

It doesn't seem like thats the reason you're buying, so I wouldn't take on the hassle/risk. (I can't imagine that your 'worst case scenario' is that you have to move and can sell it for a gain or have a service rent it out at a positive cash flow, but I don't know west coast real estate, so maybe there are sure things)

[Mike]

Looks like you're pretty well set. I wish I could save that much.

[Ryan]

Maybe find a nice condo or townhome? YOu obviously don't need a lot of space and they are a lot less work.

[Mark]

So who died? No way you could have emassed so much $ at such a young age with that income.

[Chris Parsons]

First off, wow - this guy is ahead of the game with savings.

To get into the specifics of whether to buy a house:

The price of the house from "the boom" is really, really irrelevant. Wipe this from your memory. It was a false bubble, and house prices will not be near that level again within the next decade.

You said you wanted to get your own place, but then you talked about getting more roommates. If you want to live with your girlfriend, that's cool with me (maybe not her parents though) - but I would NOT take on a 3rd roommate.

As a young person, and especially in the construction industry, your greatest asset is your ability to be flexible about moving. By buying a house - you lose that flexibility.

The only way you should buy a house is if it makes sense as a financial investment to rent it out. That means your mortgage note + 2% annual repairs + property management fees all have to be less than what you could charge in rent (and assume a 10% vacancy rate). Intelligent real estate investors NEVER count on a house appreciating in value - that's a bonus.

[Jon]

If you are going to be living with your girlfriend and another roommate, you will still not have your own living space, you will just be a landlord.

No way I would buy if my job expected me to move. Get a nice apartment, or rent a house if you really want your own space.

Housing prices are not going to get anywhere NEAR the boom prices for a LONG time, so it's not like you are going to be selling it in 3 or 4 years for a 75%-100% profit.

Also (and no intention of being rude), if you break up with your girlfriend, and don't secure any roommates, you will be paying for everything. Is that something you are comfortable with in relation to your financial goals?

Keep investing your extra money in stocks. You'll return far better than buying a house,fixing it up, maintaining it, and trying to sell it. And far less hassle.

[No Debt MBA]

Again, congrats on your savings. I'm around the same age as you and your savings blow mine out of the water.

As for the house I think it basically boils down to a personal decision about how much hassle you want to take on. If you're comfortable with the idea of a rental property then I'd say there isn't any reason why you shouldn't by assuming you do your research on comps, management companies, rent prices, vacancy rates etc. As others have pointed out you need to be comfortable paying for the full cost of this house and potentially the full cost along with rent somewhere else if you can't find tenants for a few months.

[AZ]

In looking at it from a cash flow standpoint, your current monthly housing/utility expenses are $500 / month, which is really pretty good. Worse case, your housing/utility expenses would be $1,000 to $1,300, of course some of that would be mortgage payment which I would not consider an expense, just a transfer (it doesn't change your net worth). With that, you are much better of staying in your current situation.

Also, if your monthly outflow for housing are 1,300, you would not be able to meet your goal of saving $32.5K. $70K - taxes (30% for federal/state/SSI/Medicare) - housing/utilites ($15,600) - savings ($32,500) = $1,000 to cover food, insurance, clothing, etc.

However, if you aren't bothered by renting out your place if you have to move and you really want to own your own place, then I saw go for it.

[Bill]

I have to agree with the other posters, wait on the house. Generally I do think purchasing a house is a wise idea, prices and interest rates are both very attractive. Liquidity however is terrible, it's always terrible for houses but even more so now. I would not put my self in a situation where I needed to sell in the next 5 years. You mention holding the house and renting it with a management company. This is also generally a wise idea. However I would not want my first rental experience to be done from afar. If you want to buy an investment property you should be looking for a house that will appeal specifically to renters and close enough that you can keep tabs on it and the renters personally. This situation would have neither of those.

Also in regards to your 401k, my wife is in a similar situation, poor investment options in her companies plan. I would still recommend you save as much as you can in that vehicle. 1% management fees are lame but are dwarfed by the tax benefit of a 401k. Make sure to keep your most tax inefficient investments inside the deferred tax vehicles and you'll definitely come out ahead with the 401k

[Mike Hunt]

I would normally recommend buying a house for you to live in but with your living situation, right now your costs are minimized. I'd stay flexible, when you know you want to settle down and not move, and are considering to get married, I'd say then is the time to buy a house. Your expenses will go up, but if you buy outright in cash which continuing to work, your monthly cash flow will be very healthy.

Are there other things you can do to grow your career and earn more from your work?

-Mike

[Max]

"I own two vehicles outright, a ten year old 4x4 pickup I’ve been driving since 2004 and a 1997 sedan purchased for commuting. Both are over 100k miles"

What many people in the US don't realize is the fact that driving your car throughout its entire life span is one of the best ways to save money. Imagine not having car payments for ten years. At $400 a month x120 months you will save $48,000!

[The Question Guy]

@ Mark- I didn't get an inheritance per se, but was fortunate that my grandparents left me $20k for a "college fund". I used very little of this for college, but rather saved and invested it. Also, I worked through high school and college doing construction labor and farm work, and I believe I had ~$30k in net assets between ROTH and stocks when I graduated college. Also, I was fortunate in timing by starting to plow money into the stock market late 2008 and throughout the downturn, so my balances are augmented by those excellent returns.

[Terrence N.]

I think you are doing a great job.

I would consider what other things you would like to do in life. Would you like to retire early? (You are set up for such a life.) Would you want to get into a second career? (I know, its early in your working life to think about it, but its possible that you have a dream to do something else.)

I think some of these longer term questions could help you define what you'd like to do short term.

[Rick Francis]

In your position I would continue to rent- owning a home brings a lot more work- lawn care repairs etc. If you are forced to relocate for work, selling the home or trying to rent it from a distance could be a real pain. If you want to diversify into realestate you can always buy REITs with some of your cash.

Also, you should read A Random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing as beating the market by picking stocks is a lot more difficult than you think it is. A few bad picks can really hurt your performance. With your current assets and savings rates you DON'T NEED to risk trying to beat the market.

-Rick Francis

[Emily]

Gosh, I thought I was doing well but this post makes me feel bad about myself (lol)!

I do NOT recomend buying. Its not all its cracked up to be. Wait a few more years until you are really ready to settle down and by that time you will be able to pay cash for a house. Don't put all your money down now on a property that may turn out to be an investment (which could be a nightmare), unless that is your goal to have an income property.

Congrats on being so lucky and obvously working really hard!

[MC]

Why in the world do you want to buy a house? Especially if you aren't ready to settle down in one place, get married, and stay there for years and years. Even in the bay area buying a property as an investment right now is way iffy. If you just want a place to live with your GF, find someplace nice and rent.

[The Question Guy- Joe Willy]

Thanks for all the analysis and insight. So much better than the "if you rent, you're throwing away money" rhetoric I always hear!

@ Chris Parsons, I need to more thoroughly research local property management fees and rental rates to evaluate my rent/buy decision. Thanks for providing the formula.

@ Az- thanks for cash-flow analysis

@ Mike Hunt- Appreciate your input. Enjoyed your reader profile very much last week. My current company/industry seems more like a slow and steady career growth than your impressive exponential career trajectory. With some exceptions, it is typically the veterans who are the company leaders. I'm trying to focus on career development strategies to hopefully nab a promotion in the near future though providing more salary and perks.

@ Max- I always laugh when a new employee fresh out of college buys a brand new $50k pickup, then makes fun of me for driving an "old grandma's car". I guess I just take more pride in my balance sheet than my vehicles :)

@ Terrence- I will hopefully be able to retire early or venture into semi-retirement in my 40's. I have considered some second-career opportunities, but currently I'm more focused on advancing in my current field

[08graduate]

I'm also 25, and skeptical of most people our age who want to buy a house. You, however, can clearly afford the houses you're considering, even in the worst case where you're stuck paying the whole mortgage yourself.

So, it's just a lifestyle question. Are the benefits of homeownership worth the hassles? For me, they wouldn't be, especially with the risk of moving, but I don't see how anyone else can answer for you.

[LifeAndMyFinances]

The housing market will be down for quite a while (at least another year), so don't get too antzy. If you think you'll have to move, keep saving and investing. The last thing you want to have is a double mortgage (or rent and mortgage). It's a nightmare.

[Ginger]

I am about your age, 26 and I purchased a house in 2009 yet I would also recommend against buying unless you want to rent it out. My DH and I are staying in this area for about 5 years, we knew we wanted to rent the duplex out and the mortgage, property taxes and insurance were the same cost as renting. Do you have a plan for the house if you needed to move? Unless you have a plan that accounts for moving I would not buy.

[The Question Guy- Joe Willy]

@ Rick Francis- Thanks for the suggestion. I will read A Random Walk. I've read Bogle's guide to investing and other resources (FMF!) touting the merits of index funds, and have since put all of my Roth $ into index funds. But, I do enjoy researching and picking stocks. I'm more of a buy-and hold type investor focusing on small cap value stocks than an active trader. Maybe I should increase my % of index funds relative to my stock selections though.

@ Emily- Sorry, didn't mean to make you feel bad about your situation! I appreciate your input.

@ Ginger- It's good to receive feedback from someone in a similar situation. If I needed to move, my contingency plans would be either contracting a property management firm to maintain the property, or have a local family member do it.

[Sharon Bially]

I agree with many of the other comments here that this person is WAY ahead in the savings game! What I wouldn't give to have a savings account at all! And I earn about the same amount, while my husband earns about twice that amount. Trouble is, we have 2 kids, and everything we would have put into savings or retirement has gone to college savings instead...

That said, I never thought about this stuff when I was young enough to start saving on my own. Nobody ever taught me about it, and I regret it to this day. I also regret having bought into the real estate market too late, and would say that this person should DEFINITELY buy now. Especially with nothing to sell, it's a great time.

[Bad_Brad]

I would not buy the house. I would continue to rent.

As others have pointed out, you lose a ton of flexibility by buying, and you don't sound like you are that settled yet. If you were to move and not sell the house, how would you feel about being a landlord from a distance? It's a bigger risk than you realize. One bad tenant can really make your life a living hell, and you don't need that at this point of your life.

Plus, there is a HUGE glut of houses still on the market right now, and there will be for at least another 5 to 10 years. In that timeframe, housing prices are not going to do anything but fall. You will be better off waiting around and buying at a later time, anyway.

[Sharon Bially]

I agree with many of the other comments here that this person is WAY ahead in the savings game! What I wouldn't give to have a savings account at all! And I earn about the same amount, while my husband earns about twice that amount. Trouble is, we have 2 kids, and everything we would have put into savings or retirement has gone to college savings instead...

That said, I never thought about this stuff when I was young enough to start saving on my own. Nobody ever taught me about it, and I regret it to this day. I also regret having bought into the real estate market too late, and would say that this person should DEFINITELY buy now. Especially with nothing to sell, it's a great time.

[Nate]

I would definitely buy right now! Of course you need to run the numbers to make sure it makes sense (that you could rent it out with positive cash flow including the expense of a property management company) if you were to move. Dude – seriously. I am close to your age as well and this one of those rare times in history where you can get the house on sale AND money is on sale (interest rate around 4%)… I bought my first house at 22 and I am getting ready to load up the truck with a few more positions in real estate (with good 20%+ down payments of course).

Is this riskier than continuing to rent? Of course it is. But this move with most likely speed up your wealth accumulation. I am also making this advice reading your comments about possibly semi-retirement in your 40s – having this house paid for at that time (you seem very fiscally responsible and I’m sure you would) will provide a nice source of inflation protected income (you can raise rents with inflation). Dude – go for it (again if the numbers make sense)!!!!!

[Terrence N.]

I would caution anyone saying that now is definitely is the time to buy. The real estate market across the US has many inefficiencies for various reasons. For example, houses near colleges didn't have a huge dip in price. However, houses in some rural areas and some cities remain quite reasonably priced.

That said, it seems like the reader has his information about the market, not to mention he seems like a bright person. So, whatever he decides will likely be the right choice for him.

[Old Limey]

I'm in the camp that believes you should stay put. Housing prices are still declining. Should you have to move it's better not to have a house that you are responsible for. You're off to a great start, just stay on your present course and wait until you are ready to settle down for a lengthy period before buying a home. Rental properties can be a real pain in the rear end, particularly if you live miles away from it.

[eddiejov55]

You've struck FMF gold by getting two very reliable people (Old Limey and Mike Hunt) to give you the same advice! Listen to their suggestion and thank them 3 years down the road when you're 2,000 miles away from your current location, with another $25K in your pocket, and happy you don't have that house hanging around your neck...

[Neil]

Unless you lived on no food, no clothes, and no shelter, the money you amassed in relation to yoir income is a lie

[Old Limey]

Neil:
You didn't read the poster's reply so here it is again.

@ Mark- I didn't get an inheritance per se, but was fortunate that my grandparents left me $20k for a "college fund". I used very little of this for college, but rather saved and invested it. Also, I worked through high school and college doing construction labor and farm work, and I believe I had ~$30k in net assets between ROTH and stocks when I graduated college. Also, I was fortunate in timing by starting to plow money into the stock market late 2008 and throughout the downturn, so my balances are augmented by those excellent returns.

[Margo]

Have any of you seen how most young males live? His net should be somewhere around $4000 a month, and his housing&utility total cost is only $500 because he lives with 3 other guys. No car payment. Engineering jobs don't require fancy clothes or showy lifestyles. He's already got a girlfriend, so he's not blowing cash on lots of first dates. Those old cars are cheap to insure.

He could eat out a ton, drink gallons of cheap beers at the local bars, and still have at least $1500/month to put away. If he's living like a college guy, still eating subs and pizza instead of going to the trendy places, and drinks more modestly he could be approaching $2000/month in net savings. Since he had a job right out of school, and was investing most during late 08 and through 09...his returns should be through the roof on those early savings. Q1 2009 the S&P 500 index was around 700...now it's closer to 1250, so his numbers aren't so unreasonable.

To the OP - you're pretty sharp to have landed a job in such a godawful graduation year, and not just kept it, but performed and gotten those raises. And to have started investing when everyone else was running away from the stock market.

A little smarts, a little luck, and modest expenses = a small fortune saved.

Advice: someone once said, include your career as part of your portfolio when determining the appropriate balance of investments for your risk tolerance. Many, many people in South Florida are hurting because their careers AND their net worths were too tightly tied to home values. If you weren't in construction, I'd say go for it on the house. Since you are, I'd wait a year or so.

Another point against ownership now: You're so young, and you're not married. Do you really want to be in the position of landlording to your girlfriend? How would that power imbalance change your relationship?

[Mark]

I wouldn't recommend buying and then renting unless that's something you understand well and are really wanting to do. Renting out a house is not something to do on a whim. There are a lot of pitfalls that can cause you some serious headaches if you don't know what you're doing.

If you are serious about acquiring rental property and have a reasonable basis of landlording knowledge, it's a great way to get started. You'll lock in great financing because you're going to be living in it at the outset.

If landlording is not something you're serious about doing, I would wait to buy until you move.

[The Question Guy- Joe Willy]

@ Old Limey- Thanks for your input,I always enjoy reading your wise commentary!

@ Margo- Thanks for backing me up, haha. You are correct in that I still live like a college student and I haven't adjusted my lifestyle or expenses despite the vast difference in income. My net has been about $4k per month after 401k contributions, and I don't really enjoy the club scene where many of my colleagues drop a couple hundred dollars a weekend between dinner and drinks. I would much rather go for a hike with my labrador or spend time in the outdoors (for free). I cook all my meals except an occasional modest meal out with the girlfriend.

You make a very interesting point about landlording to my gf that I hadn't really considered. We discussed my purchase of the house and she liked the possibility and was okay with paying rent because it would still be much less than her current condo rent. How that affects our relationship is something to think about though. Thanks for your comments :)

@ Neil- Lying about my net worth on internet forums does not really float my boat. As Old Limey referenced above, I had a good amount >$30k saved by the time I graduated college. I have relatively low housing expenses, ~$500/month, and don't spend much on entertainment or toys like so many 20-somethings. I don't own a computer(other than my work laptop), or tv, or much in the way of furniture. I've always been interested in personal finance, and have read much on the subject.

My net income has been ~$4k/month after 401k withdrawals. Of that I have been saving around $2.5 k/month to save about 60% of my net income on average for the past three years. The rest is attributed good timing to start investing when the DJIA was around 7k up to its current 12k.

No lies or get rich quick schemes here!

[JimL]

Neil,

It would be better if you asked questions and/or read more detail before making an accusation.

[MBTN]

As others have said, there is a transaction cost to buying and selling a house, so if you are planning to relocate in a few years, that cost is going swamp any potential gains. However, many companies offer very lucrative relocation packages if they relocate you for work. Many will pay for your real estate agents' commissions, closing costs, moving expenses. Some companies will even buy your house at the price you bought it out in order to make sure you don't lose in the deal. This is a nice perk to compensate you for uprooting your life.

I would check with your HR dept about the type of relocation benefits they offer. That might be enough to tip the scales in favor of buying.

[Financial Independence]

To be brutally honest it is rather hard to believe that he accumulated over 4 year - 210 K, most of them are after taxes : -)

How could it possible? No doubt somebody helped him out for a jump start on the road to financial independence.

My advice would be to chill out - even if he would not do anything till retirements he would not accumulate any more money he should have over 1 million for retirement.

But if he will keep saving more than earning IRS will be after him soon ; -)

[mysticaltyger]

It's always the engineers who have the money!

At the rate you're going, you could probably be financially independent at 35 if you made it your #1 priority.

160K @ 8% x $2500 per month x 10 years = $852K...With even small raises added to ths savings, you have a reasonable shot at hitting $1M by age 35. But, being an engineer, I'm sure you already ran the numbers :-)

[The Question Guy- Joe Willy]

@ MBTN- That's a very good point. I have heard of some of the costs associated with moving being covered before, but I think it's a case by case thing based upon title, experience, etc. But, I will definitely check into it. Thanks for the tip!

@ Financial independence- I haven't saved 210k. That's just my total net worth. Much of it is due to accumulated interest. As I mentioned above, I graduated college with +30 k in net assets due to scholarships, working throughout high school and college, and a 20k college fund from my grandparents that I didn't use for college, but invested instead. Since starting work after college, I have earned approximately $140k net after 401k. I looked into my actual contributions into the accounts I have above, and I have contributed ~$121k of my own funds among Individual stocks, Roth, and savings accounts. Deducting the ~$30k I had saved prior to starting my career and that equals ~30k/year and ~65% of my net income saved per year.

@ Mysticalgyer- I guess the personal characteristics which make good engineers correlate to personal finance skills. I'm aware of the potential, and have worked over many excel spreadsheets projecting net worth. I have set short term,5 year,and 10 year goals for net worth. I'm trying to hit $250k before 26 years old, $500k before 30, and $1M before 35 :)

We'll see if I'm fortunate enough to hit those marks, but it's good to aim high!

[Margo]

@ the OP - Glad you appreciate the perspective. It takes emotional maturity to realize the power balance issues that happen as we grow and succeed at different times from our friends and loved ones.

@ mysticaltyger & the OP - it's not about the spreadsheet skills, or many other professions would have the same sort of net worths. I'd say it's because the kind of people who study engineering are the kind of people who live 'efficiently' and buy for function over status or beauty, and generally aren't impulsive. Investment bankers earn far more income, but spend like drunken sailors on booze, women, and status items. Engineers spend on women too, but more modestly, because they tend to have girlfriends and because the gold diggers tend to pass over the guy wearing a plaid button-up and faded Dockers on the one night a month his friends convince him to go out to a club.

[Old Limey]

@Mysticaltyger
I believe you're right about engineers. I can only really speak for myself but I have been around them all my life and even now, in retirement, I gravitate towards them. If I can summarize, I would say that we tend to believe in things that can be proven beyond a shadow of doubt, such as the laws of physics, and are sceptical of everything that depends upon faith, especially anything that is intangible or "Mystical". It's our understanding of the physical laws that have enabled countless engineers and scientists to make new discoveries and to develop new things that have greatly enhanced the quality of each of our lives. How would your life be without Electricity, TV, Radio, the Automobile, the Aeroplane, the Internet, the Computer, Antibiotics etc. etc. etc?

Before making any important decision I analyze it carefully. I need to know what the Risk vs Reward ratio is like. The last thing I would do is to make an impulsive decision based upon emotional factors. For example, buying a home requires a lot of analysis, particularly its vulnerability to climatic and natural phenomena, such as tornadoes, hurricanes, tsunamis, earthquakes, floods etc. The main risk where I happen to live comes from earthquakes so I elected to buy a home that was built on flat, undisturbed, orchard land, and I chose a single story wood frame home. In 1989 we had the Loma Prieta eartquake which was 7.1 on the Richter scale and did extensive damage in some areas - my only damage was a bottle of wine fell out of a cupboard and a table lamp fell over, requiring a new shade.

Making good, carefully well thought out decisions is particularly applicable to personal relationships and financial matters.
The best decision I ever made was marrying my wife of 55 years, looking back I feel very fortunate because I was a real "nerd" back then. Also, looking back over my life there have been no major decisions that I made that had a bad outcome. I can't take all the credit for that, there's also the effect of luck, chance, and timing that play a major role at various critical times in our life.

[Mike Hunt]

@OP: One other very important consideration to consider... do you plan to get married to your girlfriend? If the answer is no or you are not at all sure then do not buy a house to live in with her.

I say this because back in 2000 I was thinking about buying a house and moving with my girlfriend who was living with me at the time in a rented apartment. What held me back was that I felt unsure if we were going to get married- we were having fun as a couple, but it seemed like our long term plans weren't in alignment. That is what held me back from buying the house. As it turned out the girlfriend and I split up not long after that, I think it would have been weirder to buy the house and have her move in and then split up. Something about buying a property and moving in with your significant other increases the level of commitment, could be a good or bad thing.

-Mike

[KMI]

As an additional point - if you did buy the house and have to move, would you ask your girlfriend and the potential third renter to move out so you could rent it to somebody else? Or would you ask them to pick up the difference in rent, or ask your girlfriend to live with yet a different third person she doesn't know? All of these could be difficult. I wouldn't count on renting your place for more than enough to cover costs in this scenario.

Wait until you are ready to stay put for 5 years before getting a house. Early in your career, being flexible is one of your greatest assets.