Interview of Dr. John Ramey by Josh Mettle. Watch the full video here
JM: Couple of thoughts. I agree with you, it’s absolutely an individual decision, and I think that the comments on some of the websites that just talk about “avoid buying” a house as a resident misses the mark just a little bit, although I do believe it’s well-intentioned. But where I think it misses the mark is, if you have two kids and two dogs, good luck trying to find a rental property. It is tough! I mean, I know where we live, that is a really hard sell, if you have a family that needs some space, to find something. People call me all the time and say, “Hey, it’s just easier to find something that fits our family criteria to buy than it is to rent.”
DJR: So, if we know that that is an individual decision, and for some folks, you just have to buy for one reason or another, then I think that the focus on some of these websites and in general should be on education, not risk aversion. Right? So, it’s like, “Let’s just all rent.” Well, that doesn’t work because some people have to buy because of their family situation, or they just have a strong desire to do so; we should be working more towards educating people on how to not make a mistake, and how to be able to re-sell quickly.
JM: So, I completely agree with you there. The other thing that you said that I thought was really important was, and I’ll paraphrase, but, location and neighborhood trumps the house. If I’m hearing you right, falling in love with the house on the busy street because you love the house is problematic, as opposed to, “This is a really good neighborhood, close drive times to the hospital, homes sell quickly…” I’d rather take a lesser home, maybe even not in as good a shape in that really healthy neighborhood. Would you agree with that?
DJR: Yeah, I’d totally agree with that. You know, one of the things we try to tell our clients is that if you’re early in your career, you’re a medical student or resident, you got your first job, if this is not going to be your final house, you don’t have to like everything about the house.
DJR: For me, it’s more important, looking at a house as an investment, and if you know you’re going to sell it, is this house going to re-sell? Are there problems with the house? And I’m going back to the other house I was talking about earlier, on the busy street, one of the things they messed up: they built the house, and they didn’t put any bathtubs throughout the house.
Well, we’ve had several clients that… they want a bathtub, at least in one bathroom, and again, you got to think not just what you like, but what other people like in a house, and make a good decision with that. It’s so important. We just see it over and over that people make bad decisions about what they do in a house, how they remodel and stuff. So, you know, get advice from realtors and professionals, you know, “Is this a good idea? Do I need to put this much money into the house?”
JM: Right, and like you said, if you’re going to be there for 15 or 20 years, time will cover up any of those mistakes. If you’re going to be there for three years or four years, you have to make wise decisions on your neighborhood and what improvements that you do in the house. I think that’s an excellent point.
DJR: Getting back to one other thing that you had said about the websites and advice to medical students and residents, you know, I hate when you give absolutes, and I think that’s the thing is, I like your point about looking at rentals versus buying. We just bought an investment property that, it’s near the medical school, and we’ve got a lot of phone calls, and one of the common phone calls, like you said, is people have animals.
DJR: And we’ve turned down every single one that’s called with animals. I like dogs, but I don’t like dogs when I’m the landlord because I have hardwood floors in this rental, and I know I’m probably going to have to re-sand them, re-finish them in three to five years. And so, as a landlord, a lot of times, you want tenants that are going to take good care of your rental.
So, again, I agree with you. I think it’s hard when you know that somebody’s going to bring cats into a house and maybe not take good care of it.
JM: And kids! I mean, don’t think landlords don’t think through total wear and tear with the number of bodies in a house, and that just makes it more challenging to find good rentals out there.
DJR: Yeah, no, I agree. And again, in our market at least, the rental prices have gone up more than what you can get… for the same price, you can get a lot nicer house if you buy one, too.
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