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Message
Buying home vs Continuing to rent
Posted on 8/5/16 at 9:25 am
Posted on 8/5/16 at 9:25 am
Happy Friday to y'all... wanted some opinions here... just want to hear some pros and cons about what I'm thinking.
Currently Financial summary: I'm able to save around 28% of my paycheck right now. About 11% of that is going into 401k and the remaining is going into my short term savings. I only use this money for vacation or, most recently, a decently fat car repair bill. I'm going to use that money as a down payment on a potential house.
Right now, i'm renting at $633 per month and there are 3 of us (1900 total). I've been renting for the past 4 years and, looking back, that's a lot of money spent 633x48.
I'd like to buy a house/townhome after my current lease is up. Some things to consider for myself are taxes, utilities not being split 3 ways, and routine maintenance. I'd be looking for a house that would cost me roughly $1416 per month on my mortgage (I included taxes in that number as well). I know that I could get a roommate for the first year, he'd be paying $633 so I could easily get by with him living with me. However, not too sure how long he'd want to stay committed. $1416 by myself would be extremely rough, but I think I could do it.
I'm asking this because one of my roommates is moving out and the next option for 2 roommates is around $800 per month.
What do y'all think? Am I being foolish? I live in ATL by the way. Looking to buy in the brookhaven/chamblee/sandysprings area.
I know I'm forgetting details... feel free to ask.
Currently Financial summary: I'm able to save around 28% of my paycheck right now. About 11% of that is going into 401k and the remaining is going into my short term savings. I only use this money for vacation or, most recently, a decently fat car repair bill. I'm going to use that money as a down payment on a potential house.
Right now, i'm renting at $633 per month and there are 3 of us (1900 total). I've been renting for the past 4 years and, looking back, that's a lot of money spent 633x48.
I'd like to buy a house/townhome after my current lease is up. Some things to consider for myself are taxes, utilities not being split 3 ways, and routine maintenance. I'd be looking for a house that would cost me roughly $1416 per month on my mortgage (I included taxes in that number as well). I know that I could get a roommate for the first year, he'd be paying $633 so I could easily get by with him living with me. However, not too sure how long he'd want to stay committed. $1416 by myself would be extremely rough, but I think I could do it.
I'm asking this because one of my roommates is moving out and the next option for 2 roommates is around $800 per month.
What do y'all think? Am I being foolish? I live in ATL by the way. Looking to buy in the brookhaven/chamblee/sandysprings area.
I know I'm forgetting details... feel free to ask.
8
Posted on 8/5/16 at 9:29 am to SouthMSReb
quote:
$1416 by myself would be extremely rough, but I think I could do it.
Don't do it
Posted on 8/5/16 at 9:29 am to AnonymousTiger
Yes, don't over extend yourself You're not doing yourself any favors.
Posted on 8/5/16 at 9:48 am to SouthMSReb
We just moved to Austin and have a lease that's ending in 6 months. We found a house we really liked that we didn't want to pass up and that the sellers have been having trouble moving/price has come down about 75k since May.
So we came up with a deal that gets us under contract now with the close set for the end of January. They were looking for tenants for lease since they couldn't sell, so now they're going to find a short term tenant and we'll take possession after that lease is up.
We'll end up with one month of rent and mortgage overlapping. If you think outside the box you may be able to make a deal like that, but patience is a virtue if you're not buying a dream house or anything.
So we came up with a deal that gets us under contract now with the close set for the end of January. They were looking for tenants for lease since they couldn't sell, so now they're going to find a short term tenant and we'll take possession after that lease is up.
We'll end up with one month of rent and mortgage overlapping. If you think outside the box you may be able to make a deal like that, but patience is a virtue if you're not buying a dream house or anything.
This post was edited on 8/5/16 at 9:49 am
Posted on 8/5/16 at 10:15 am to SouthMSReb
I wouldn't buy unless you knew you were going to live there for 4 years. If you can buy and have a roomate or 2 pay you rent, that's a great situation. Considering you are not married and don't have a serious GF right now, you have to consider that that could change in the next 2 years.
Its not really about the monthly costs as the big money to be gained or lost is in the purchase price, sale price, and closing costs.
If one roomate leaves, you can always find a new roomate. Its pretty easy to find a roomate to live with you when you own the home and can offer 50% or less rates.
Its not really about the monthly costs as the big money to be gained or lost is in the purchase price, sale price, and closing costs.
If one roomate leaves, you can always find a new roomate. Its pretty easy to find a roomate to live with you when you own the home and can offer 50% or less rates.
Posted on 8/5/16 at 10:22 am to SouthMSReb
quote:
$1416 by myself would be extremely rough, but I think I could do it.
Then don't do it, or go down on your monthly expectation.
Never count on having a roommate when you buy a home. Buy what you can afford on your own, and treat the roommate's rent as gravy.
Posted on 8/5/16 at 11:04 am to SouthMSReb
The hidden costs of owning a home really add up over time. On my last house that I owned for ~10 years, I had the following:
- New roof (insurance deductible)
- New roof again (deductible)
- Property taxes
- Deck repairs
- Garage door replacement
- Carpet replacement
- window replacement
- landscaping
- Mortgage interest
- Home insurance
etc.
After adding up all the costs that I could not recoup, I spent over $900/month over 10 years just to own the house.
- New roof (insurance deductible)
- New roof again (deductible)
- Property taxes
- Deck repairs
- Garage door replacement
- Carpet replacement
- window replacement
- landscaping
- Mortgage interest
- Home insurance
etc.
After adding up all the costs that I could not recoup, I spent over $900/month over 10 years just to own the house.
Posted on 8/5/16 at 12:00 pm to notsince98
Yep, that is something a lot of people don't take into consideration. If the house is over 10 years old, there is always something that needs to be done to it. Repairs add up QUICKLY, especially when you start talking about replacing windows, doors, light fixtures, sinks, etc. I had to get a new front door a couple of years ago and was blown away at how expensive they were. Ended up being about $6,000 installed. You get a couple of expenses like that in one year, and renting looks more attractive.
Posted on 8/5/16 at 12:18 pm to The Spleen
and I forgot to list the appliances and HVAC.
Having said that, I still enjoy owning a home. I like that I can make it as nice or cheap as I want.
Having said that, I still enjoy owning a home. I like that I can make it as nice or cheap as I want.
Posted on 8/5/16 at 12:34 pm to Teddy Ruxpin
quote:
Austin and have a lease that's ending in 6 months. We found a house we really liked that we didn't want to pass up and that the sellers have been having trouble moving
which area? did someone get murdered there?
Posted on 8/5/16 at 12:43 pm to Dan
quote:
which area? did someone get murdered there?
NW Hills. No, house is in impeccable shape. They own a few homes and are moving out of state to the NE. The market is kind of cool from what we can tell, so some houses were overpriced and came down, so that's when we got it.
This post was edited on 8/5/16 at 12:45 pm
Posted on 8/5/16 at 1:53 pm to Teddy Ruxpin
quote:
NW Hills. No, house is in impeccable shape. They own a few homes and are moving out of state to the NE. The market is kind of cool from what we can tell, so some houses were overpriced and came down, so that's when we got it.
oh. yes I think it is leveled a bit west of mopac. central cottages still going in 3 days max, unfortunately
Posted on 8/5/16 at 1:57 pm to SouthMSReb
quote:
$1416 by myself would be extremely rough, but I think I could do it.
Why are you even considering this then? If affording your own mortgage would be "extremely rough" then it's a terrible decision IMO.
Posted on 8/6/16 at 12:52 pm to SouthMSReb
The most important (missing) details would be your income and debts/obligations.
But I would say no, just based on what you've said: "$1416 by myself would be extremely rough, but I think I could do it."
I don't know what percentage of your income that $1400+/- would represent. But if you feel like that would squeeze you, then, of course, don't do it.
But I would say no, just based on what you've said: "$1416 by myself would be extremely rough, but I think I could do it."
I don't know what percentage of your income that $1400+/- would represent. But if you feel like that would squeeze you, then, of course, don't do it.
Posted on 8/7/16 at 12:20 pm to SouthMSReb
quote:
I'd be looking for a house that would cost me roughly $1416 per month on my mortgage
Buying a house in your case isn't necessarily a bad decision. Instead of looking for something that will run you $1416, look at something that would run you $1200 a month. That extra $216 buck every month would give you $2600 cushion after 12 months.
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