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re: Buying a first home
Posted on 11/18/14 at 7:30 am to HoLeInOnEr05
Posted on 11/18/14 at 7:30 am to HoLeInOnEr05
I know very little of BR housing market. But generally buying a more modest home in a nice community will be easier to sell and appreciate respectively, if not more than other homes in same community.
Also think of flexibility of the home. Generally houses with Master bedrooms on the main floor sell faster because they appeal to more buyers. Taller ceilings on main (9ft minimum) have also become deal breaking necessities for many buyers.
If you are 100% positive you'll be out in 10 years, I'd consider a 10/1 ARM. You'll get a much better rate than 30 year fixed and if you want to pay on property like a 15, you can do so.
Also think of flexibility of the home. Generally houses with Master bedrooms on the main floor sell faster because they appeal to more buyers. Taller ceilings on main (9ft minimum) have also become deal breaking necessities for many buyers.
If you are 100% positive you'll be out in 10 years, I'd consider a 10/1 ARM. You'll get a much better rate than 30 year fixed and if you want to pay on property like a 15, you can do so.
1
Posted on 11/18/14 at 9:53 am to ItNeverRains
Buy a house in an established neighborhood.
Built our first house in a new neighborhood, landowner couldn't sell lots, sold lots to a builder who filled the neighborhood with substantially cheaper homes. We lost money when we sold.
Have it INSPECTED. Roofs are 8 grand. A/C's are 10 grand.
You can get an agent, but also look on forsalebyowner.
Built our first house in a new neighborhood, landowner couldn't sell lots, sold lots to a builder who filled the neighborhood with substantially cheaper homes. We lost money when we sold.
Have it INSPECTED. Roofs are 8 grand. A/C's are 10 grand.
You can get an agent, but also look on forsalebyowner.
This post was edited on 11/18/14 at 9:54 am
Posted on 11/18/14 at 10:32 am to TigerTatorTots
quote:
quote:
If you're under 30, unmarried or even married w/o kids - don't. Invest.
Thats just terrible
Enlighten me.
Posted on 11/18/14 at 10:52 am to cwill
quote:
Enlighten me.
I'm 24, bought my first home in BR over a year ago. Bought it at 186k with 5% down. Now only a year later, other houses in my neighborhood with similar sq ft and condition are going for 205k.
I am no longer wasting money on rent, and I will likely have a nice return when I go to sell.
Why would you suggest to not buy if you're under 30?
Posted on 11/18/14 at 10:59 am to Delacroix
quote:
Why would you suggest to not buy if you're under 30?
id say the blanket statement is silly, but between potential job opportunities, family growth, etc... its a bit of a volatile time where it can be nice not to have an anchor.
for some people its a great opportunity though.
Posted on 11/18/14 at 11:08 am to Delacroix
quote:
I'm 24, bought my first home in BR over a year ago. Bought it at 186k with 5% down. Now only a year later, other houses in my neighborhood with similar sq ft and condition are going for 205k.
So in a year you've turned about 9300 into 10250 for a 10% gain on the surface. Did you include all of your maintenance costs, wear & tear, repair, taxes, etc. And, of course your equity has increased as you've paid your principal plus the "rent" you paid for the money to buy the house...you're still paying rent pal, but now it's for money. So after taking that all into account what is your actual ROI?
Posted on 11/18/14 at 11:19 am to cwill
quote:
So in a year you've turned about 9300 into 10250 for a 10% gain on the surface. Did you include all of your maintenance costs, wear & tear, repair, taxes, etc. And, of course your equity has increased as you've paid your principal plus the "rent" you paid for the money to buy the house...you're still paying rent pal, but now it's for money. So after taking that all into account what is your actual ROI?
Sure there are additional costs to owning. But the benefit of having a return when I sell outweighs its all. Im paying less per month by owning vs renting. If I stay in my house for at least 6 years I will make back my down payment based on the money I've saved. Not to mention the tax deductions on the interest.
Posted on 11/18/14 at 11:32 am to Delacroix
quote:FIFY. 6-7 years is about the breakeven point for buying assuming the market stays consistent. It can be shorter if the market improves, or longer if the market tanks. With 6 years being the average amount of time to breakeven I would say buying a house is not a smart move for MOST people under 30. Notice how I said MOST and not all
If I stay in my house for at least 6 years and the market does not take a downturn
Posted on 11/18/14 at 11:56 am to cwill
quote:
surface. Did you include all of your maintenance costs, wear & tear, repair, taxes, etc
Taxes are taxes, insurance is insurance, but how much maintenance and wear and tear in your experience does one typically encounter in their home in the first 12 months of home ownership, assuming they didn't buy a fixer upper and adjust the sales price accordingly or negotiate a home warranty in the sale?
Posted on 11/18/14 at 11:58 am to ItNeverRains
quote:
how much maintenance and wear and tear in your experience does one typically encounter in their home in the first 12 months of home ownership, assuming they didn't buy a fixer upper and adjust the sales price accordingly or negotiate a home warranty in the sale?
No way of knowing, really. We've all had water heaters fail while relatively new, windows broken by random falling branches, wood floors ruined by idiot guests who left the bath running, etc. At the end of the day, you buy a house because you WANT to, not because it's a completely rational economic decision.
Posted on 11/18/14 at 12:29 pm to cwill
I'm 25. I bought my first home 3 years ago. I'm selling it for a 21% profit and I wasn't throwing away money every single month. The extra funds I was savings by paying a mortgage ($800 vs 1400 if I wanted to rent a smaller home or apartment) has been going into my Roth. Enlighten me how I did wrong?
Eta- it was a brand new house so I haven't paid a dollar in repairs.
Eta- it was a brand new house so I haven't paid a dollar in repairs.
This post was edited on 11/18/14 at 12:31 pm
Posted on 11/18/14 at 12:58 pm to hungryone
quote:
No way of knowing, really. We've all had water heaters fail while relatively new, windows broken by random falling branches, wood floors ruined by idiot guests who left the bath running, etc. At the end of the day, you buy a house because you WANT to, not because it's a completely rational economic decision.
Yes these things happen. In the first 12 months of home ownership those scenarios are less than 1% based on my experience.
And at the end of the day you buy a house because it's traditionally one of the safest, most consistent and tangible investments a person can make. That coupled with the cheap money out there for qualified buyers makes a smart investment even smarter.
Posted on 11/18/14 at 1:00 pm to TigerTatorTots
quote:
I'm 25. I bought my first home 3 years ago. I'm selling it for a 21% profit and I wasn't throwing away money every single month. The extra funds I was savings by paying a mortgage ($800 vs 1400 if I wanted to rent a smaller home or apartment) has been going into my Roth. Enlighten me how I did wrong? Eta- it was a brand new house so I haven't paid a dollar in repairs.
You timed the market well.
Posted on 11/18/14 at 1:00 pm to ItNeverRains
quote:
Taxes are taxes, insurance is insurance, but how much maintenance and wear and tear in your experience does one typically encounter in their home in the first 12 months of home ownership, assuming they didn't buy a fixer upper and adjust the sales price accordingly or negotiate a home warranty in the sale?
He's flipping his house today? He bought it purely as a flipping investment? Or did he just do the traditional get out of college and buy a house because he's supposed to and is going to live in it for 5+ years as his starter house? I'm banking on the latter which suggests to me he like most people don't factor in all the costs of owning a place to live in. It's not an investment - it's a house. When you're young you should be investing your free cash not locking it up in a house and renting money.
This post was edited on 11/18/14 at 1:18 pm
Posted on 11/18/14 at 1:02 pm to TigerTatorTots
quote:
I'm 25. I bought my first home 3 years ago. I'm selling it for a 21% profit and I wasn't throwing away money every single month. The extra funds I was savings by paying a mortgage ($800 vs 1400 if I wanted to rent a smaller home or apartment) has been going into my Roth. Enlighten me how I did wrong?
Yes, your individual experience is the basis for general advice. You should write a paper on your individual experience - that's how most economists establish their theories.
Posted on 11/18/14 at 1:03 pm to ItNeverRains
quote:
You timed the market well.
Every 20something should try and time the market - it always works.
Posted on 11/18/14 at 1:14 pm to cwill
quote:
e. When you're young you should be investing your free cash not locking it up in a house and renting money
Do you realize it's possible to own a home and invest free cash at the same time?
Posted on 11/18/14 at 1:16 pm to Delacroix
quote:
Do you realize it's possible to own a home and invest free cash at the same time?
Not as much though.
Posted on 11/18/14 at 1:42 pm to TigerTatorTots
quote:Ask your buddy Betty Sue who was 25 in 2005 when she bought her house how that turned out when she tried to sell it three years later. She is still living in that house because she got bent over the fifty states, thats what Betty Sue is doing
I'm 25. I bought my first home 3 years ago. I'm selling it for a 21% profit and I wasn't throwing away money every single month. The extra funds I was savings by paying a mortgage ($800 vs 1400 if I wanted to rent a smaller home or apartment) has been going into my Roth. Enlighten me how I did wrong?
Posted on 11/18/14 at 2:17 pm to lsupride87
quote:
Ask your buddy Betty Sue who was 25 in 2005 when she bought her house how that turned out when she tried to sell it three years later. She is still living in that house because she got bent over the fifty states, thats what Betty Sue is doing
Very true about selling in 2008, but in your current market Betty Sue is not still living in that house due to not being able to sell it for a profit. She also likely qualified for Harp in 2009.
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