There are many things to consider when you are in grad school, and where you are going to live is one of them. It was a stressful choice for me, and I am sure others find where to live during grad school an important factor of their enjoyment of the grad school experience. Should you buy a house in grad school?

I thought I would talk about the opinion to buy or rent during. This buy or rent decision is a common one that many people make throughout their life. Grad students (i.e. Ph.D.’s or Master’s students) have the option to choose between renting and buying a home. The choice of buying a house is not as obvious as one would expect.

Full disclosure – I did buy a home in grad school during my Ph.D. but not during my master’s. My wife was a working as a professional during that time, although she was just out of school. For me, this home buying choice was right however, it is not for everyone. Let’s discuss the factors that you should consider in buying a home in graduate school. You can watch the video of me explaining these issues here.

Factors To Consider When Buying A House in Grad School.

Finances for Buying a House in Grad School.

This is a biggie, and being a rational investor and a nerdy person, I did my own financial calculation for buying a home. I would recommend that you calculate the net present value of the rent versus buy decision for your new potential home. You might want to use your own Excel spreadsheet to have a more accurate calculation Here are the things to consider:

1. Rent and the appreciation of rent. You can probably estimate this to be 1-3 % depending on where you live, but you can get these numbers for your city.
2. Mortgage, taxes, and utilities. You can get an estimate of your mortgage by just going to a mortgage broker online or some comparable site.

Here are things that I forgot but mattered.

1. Costs of decorating. Homes are generally bigger and require more decorations. While you might be able to borrow some of this stuff from your neighbors, but this borrowing is unlikely to occur in the first year of your home.
2. Costs of fuel / transportation to and from your home. Because you are on a budget, you are likely going to have to live further away from work than most people.

Generally, what I found out is that anything around 4 years or more in staying in the same location, it is worth buying a home in most North American locations. Anything less worked out to be not as favorable for home ownership in grad school.

Yet, there are other non-financial factors that one has to consider to buy a house in grad school.

Buying a Home in Grad School Means You are Going to Have A Different Lifestyle Than a Typical Grad Student.

The lifestyle component of buying a home in grad school was important. In some ways, it helped to maintain my sanity because I had more work/life balance. However, it also did make you removed from the typical grad school lifestyle in which most students live close to each other in the same apartments.

Buying A House In Grad School Can Make Things More or Less Stressful Depending On The Uncertainty In The Job Market.

This was a big one – it was the only way I survived the final years in grad school. Having the stability of a home made the world of difference for me and my family during grad school when the job market was tough. However, it also can add a bit of stress but you know that you have more friction to move other grad students.

Don’t Underestimate Ph.D. Uncertainty in Grad School.

It is common for you to think that grad school will be shorter than it will be. We all think we are going to finish the Ph.D. program in three years. Thus, there is the temptation not to buy a home or rationalize that you will be moving in a few years. From my experience, this prevents a lot of people from every buying a home because they think they are going to move in the short term, but this means you miss out on building home equity. You might want to watch this video about PhD uncertainty:

How To Cope With Uncertainty During A PhD.

Again, for me and my family, buying a home was the right decision during grad school. It made a world of difference on my sanity during the PhD process, which tends to be challenging. However, what you choose to buy a house in grad school really depends on your situation, so you have to sit down and make this calculation by yourself.

A Few Tips To Make Major Rent Or Buy Decisions As A Family Unit:

1. I would highly recommend that you take many nights discussing whether a home is right for you and your significant family members.
2. You should also go on house hunting trips together so you can identify what style of home and location that you both like. This might be the factor that will help you decide whether to buy or rent. Besides, looking for a home, in a casual way, can be a quite fun stress relief in grad school.
3. Many decisions as a family unit are about compromise. This should be not considered a negative thing, particularly when buying a home. No home will be right for everyone, even if you build the home yourself.
4. Know that every home is a work in progress. Nothing on a home is ever done and you will be constantly changing and modifying your home throughout your life.
5. A can of paint is a very cheap way to make a house a home. Also, painting can be a fun thing to do with your partner.

By the way, this is all part of my r3ciprocity.com project, where I am trying to be as helpful to others as possible, particularly those that are thinking of during a PhD in a Business School. I created the r3ciprocity proofreading software so I can be more generous and help out others at the same time. Whether it will work is still an unknown. 🙂