I just can’t convince myself to buy a house.

[Outlaw99]

My 1st house i bought in,98, paid 64,000. Sold it 3 years later for 128,000.

2nd house, paid 165k, sold it 7 years later for 215k. This was a rental income property.

3rd home, same neighborhood, pretty much same as second house. Used the income on these to buy my big house, paid 149,500 in 2001. In 2005, 15 more houses were added to the neighnorhood, sold that house for 325k.

Lost all of it in my divorce in 2005.

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[noco5.0]

I bought my house for 325k six years ago. It's worth about 470k now. I've put some money in it, but still up about 100k in that six years. I have owned three houses and could never see renting again. I do lease cars though so I definitely understand the logic. A car is depreciating though and at least in my area house have been appreciating for the last several years. Timing is a big part of whether or not real estate is an investment.

 

[earico]

Buy a house in a place that doesnt bone you in the as on taxes, fees laws etc.

Take a hard look at Texas.

Property taxes here are high if you are in a major city or suburb. I pay 2.25% but some places are over 3%.

However we don't have income tax and our food is not subject to sales tax.

 

[My94GT]

Had a home built last year and selling it now. Based on comps we’re looking at 24k more then what we have in it. Not a bad return in a year for some basic upgrades I did.

Just bought another home and got it for about 30k under market value as the seller was trying to move it fast. All in all a lot of hunting around with each purchase looks to be a solid choice. Location is a huge help

 

[KilledbyKenne]

I'd rather a paid for home when I retire than paying rent the rest of my life. Just my .02

 

[coposrv]

Buy a house in a place that doesnt bone you in the as on taxes, fees laws etc.

Take a hard look at Texas.

Hard no leaving mass. Best state in the country.


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[blownstang4.6]

@slo984now and @Machdup1 are right...it is all about timing. We have owned two homes in two different states. We sold one for a loss and one for a pretty good gain and it was all about timing.

We currently rent in a great area in Henderson outside of Vegas. Good schools, safe & family friendly neighborhood. Prices here are high but have leveled off over the past 6-12 months. I won't buy until the time is right, but I plan to buy again.

And to all of you who said it isn't necessarily a financial investment, you're right. For example, if you bought a house right now for $450k at 4.01% for 30 years, your total price (principal & interest with 20% down) is $710k. I don't know about you, but paying $710k for something that is worth $450k isn't an attractive thought. Plus you would still have to pay property taxes, homeowners insurance, and maintenance. Ballpark the taxes (in NV they are low) and insurance at about $120k and your payments over 30 years will equal almost double the original purchase price. Crazy!!! Then again, renting and throwing away 100% of your money doesn't sound so good either. LOL

It's in the owners best interest to pay it off quicker unless someone really can't afford more than the monthly payment. Holding for 30 years is not a good idea. You get raped big time on interest. I put 30% down and paid off an additional $36k over 2 years in addition to the monthly payments. Plan to pay off within 10 years.

 

[blownstang4.6]

Keep renting then...and pay someone else’s note. Good for you. Seems they can do it because of you guys paying them. lol

Yup. My rental pays for itself and half of my personal home.

 

[jpro]

It's in the owners best interest to pay it off quicker unless someone really can't afford more than the monthly payment. Holding for 30 years is not a good idea. You get raped big time on interest.

Right, but a monthly payment on a $450k+ house isn't exactly chump change. For a lot of people, $2500/month is serious coin. Now add extra onto that and you are really stretching it.

A lot of people in this thread are talking about post-recession purchases that are now worth $XXXXXX. Like I said in an earlier post, its all about timing. Prices accelerated when the economy recovered. You bought low and now you're sitting on an asset that is worth significantly more than what you owe on it.

 

[Lemmiwinks]

depends on a bunch of factors

I bought my house last year, and with how the surrounding area is coming up, I should be up 75-100k within 5-8 years.

Within 5-8 years there should be a depression where you should be down most of the value.

 

[blownstang4.6]

Right, but a monthly payment on a $450k+ house isn't exactly chump change. For a lot of people, $2500/month is serious coin. Now add extra onto that and you are really stretching it.

A lot of people in this thread are talking about post-recession purchases that are now worth $XXXXXX. Like I said in an earlier post, its all about timing. Prices accelerated when the economy recovered. You bought low and now you're sitting on an asset that is worth significantly more than what you owe on it.

I bought two houses in the last 3 years. $335k and $342k. Yes, with the updates and repairs I did to both plus market appreciation over the 3 years, both are worth about 20% more. I wish I had the money 8-9 years ago to buy up multiple properties, but I was straight out of college.

 

[PhoenixM3]

Yup. My rental pays for itself and half of my personal home.

^^^^This +1^^^^

 

[Zemedici]

Within 5-8 years there should be a depression where you should be down most of the value.

Most of the value?

I’m not so sure about that...

 

[P49Y-CY]

A lot of people in this thread are talking about post-recession purchases that are now worth $XXXXXX. Like I said in an earlier post, its all about timing. Prices accelerated when the economy recovered. You bought low and now you're sitting on an asset that is worth significantly more than what you owe on it.

that's exactly right. now may not be the right time to buy a home for the op.

however, i would tell the op that it's definitely something that he - and everyone - should try to do. you gotta live somewhere, so might as well make it something that you can make your own and, more importantly, won't be at the mercy of constantly increasing rent.

i was fortunate enough to buy a run-down (but decent neighborhood) foreclosure in 2009. it's my first house. now, after slowly fixing it up myself over the years, it's supposedly worth twice what i paid for it.

 

[PowerWheels]

depends on a bunch of factors

I bought my house last year, and with how the surrounding area is coming up, I should be up 75-100k within 5-8 years.

Unless you are moving out of town you're just even as the other properties you might move to are more expensive. Someone renting during this appreciation is the one who gets burned on future housing.

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[PowerWheels]

There's also a tax deduction for the property taxes you pay. I paid $365K back in 2009 for my house. It appraised for $550K earlier this year when we refinanced. And we haven't done much as far as upgrading. Plus I don't have to deal with a landlord.

Standard deductions have changed, unless you have a hella high mortgage you probably will not benefit. I never did before the standard deduction change, just didn't owe that much.

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[PowerWheels]

8-10k in tax, sounds like a revolution is in order.

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[jrandy]

that's exactly right. now may not be the right time to buy a home for the op.

however, i would tell the op that it's definitely something that he - and everyone - should try to do. you gotta live somewhere, so might as well make it something that you can make your own and, more importantly, won't be at the mercy of constantly increasing rent.

i was fortunate enough to buy a run-down (but decent neighborhood) foreclosure in 2009. it's my first house. now, after slowly fixing it up myself over the years, it's supposedly worth twice what i paid for it.

Housing is very similar to the stock market. If you are going to be in for a short period of time, timing is everything. If you plan to, or able to commit to living there for a long timeframe, you should have zero problem with values.

While yes, buying post recession was killer for those who did. I was told repeatedly by friends that I was buying my first house at the top of the market. I was there 2 years to the day, and made $140k in profit and put next to zero into it.

I rolled that money into my 'forever home' and haven't looked back. I once again thought I was buying at the top, but have added another few hundred thousand in equity.

If you are going to live there for the long haul, I wouldn't try to time it as much as I should focus on the ability to afford it if shit hits the fan. Things go up, things go down, but it doesn't materialize unless you sell.

 

[Voltwings]

I choose to approach home ownership from a more conservative standpoint. I live in Houston, and while our housing market is experiencing growth, it's nowhere near as ridiculous as places across the country.

Rather than sitting on my house and hoping the value goes up (which it will), every dollar I put towards the note is basically a dollar I put in the bank. If my house value does not change in the next 5 years, but I've paid down the note $20k (just pulling numbers out of my ass for the sake of example), I basically have a savings account worth $20k...

It's a bit ambitious to assume whatever home you buy is going to go up 10s of thousands of dollars, but at the very least if you build some equity you have something to sit on that's a bit more comforting.

 

[ON D BIT]

If you're going to live in the house for over 5 years it generally makes sense to buy. Despite what realtors say, it's almost never an "investment" after factoring in carrying costs, inflation, and transaction costs. However, you have to live somewhere. It's more of a lifestyle investment. If you want an actual investment, buy stocks.

For instance:
$365k in 2009 is about $435k in 2019 dollars.
Seller's transaction costs on a $550,000 value are $33,000.
Net $517,000 after commissions.
Taxable gain of $185,000 equals a tax payment of $37,000.
Your $517,000 net just turned into $480,000, for an inflation adjusted gain of $45,000

What were your maintenance costs over 10 years?
What were your property taxes over 10 years?
What were your interest costs on the mortgage?
What were rental costs of a similar home?

Probably a wash on your gains but you got to live somewhere you owned and you had to live somewhere anyway

Edit:
Also if you had 20% down on your initial mortgage ($85,000) you lost the use of those funds for 10 years.
If you had put that $87,000 in the SP500 in January 2009 you would have roughly $300,000 today.

I thought property tax gains only applied if you have the property for less than two years.

Also you have commission fees and tax on the sp500 investments. I’d be shocked if it tripled after everything is paid.

To the OP my dad sold his 69 Trans Am and 72 Trans Am 455 to purchase his first house. The income made on the house/s far outweigh the income he would have had on the two Trans Ams.