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when Work >>> Life 😅
Enthusiast
yeah my pain
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Finally a W on SNKRS drawing 😅
Anyone looking for an apartment in LIC?
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Coach
1.) look to the data, homes capture inflation. The 10 year yield says more inflation is coming. The people building homes are being deported. More regulations yearly making building homes more expensive. If it dips 10% then appreciates 5% a year you’ll be fine on a 5+ year horizon. Nationwide it looks like stagnant house prices with pockets of discounts. In areas with good jobs you’ll be fine.
2.) With these interest rates you’ll really want to put 20% down so you don’t pay $220 a month for mortgage insurance, or you can appreciate your way out of it. 500k, 20% is 100k, in a low property tax area, no HOA, home insurance, taxes, repairs about 3k a month. Add utilities about another $700. The other pay check is for everything else. That’s what I’d be comfortable with.
3.) If rent is 2k a month, you could also compare a VOO ETF with $1,000 a month invested in the meantime. I did that to save up. You adjust to the future payment now.
4.) Also consider your first house won’t be your dream house. You can maximize appreciation by buying a fixer in a good school district. It’s tax free if you fix it up for two years. Increase income, upgrade.
Coach
D1 - it shifts, where is this market you speak of that’s buyable now. Anything I see is a gamble on future growth of an area for it to make sense. I’m always in the market to buy. West coast has historically been good, where I’m at now.
I did some consulting at Vanguard. It’s well run internally. It was impressive for a financial company. But yeah stocks are my savings, emergency fund, short to mid term money, looking for opportunities. I have 4 businesses. And foreign real estate too, crypto. I’m in everything. Nothing does good all the time.
if you're in houston, shoot me a DM!
Besides settling on location our concerns also been market prices falling almost immediately afterwards.
Any other tips or insights would be really appreciated!!
Subject Expert
Just like stocks - prices falling only matter if you sell and lock in the loss. Plan to ride it out for 3 to 5 years, and be ready to potentially stay for 7 to 10 years. If it’s your primary residence, you should look at is as a hedge on inflation. You have to live somewhere, and even if housing prices drop, rent prices almost never drop, and renting to “ride out a bubble” has been a bad plan for basically the last 12 to 14 years. I know many people who saw prices in 2015, felt like housing was in a bubble and should pop in 2 to 5 years, and prices have only skyrocketed since. Those people have burned 10’s of thousands if not hundreds of thousands of dollars on rent that could have been paying down principal, and most are kicking themselves for not biting the bullet and just buying in when things were relatively affordable. Of course, “affordable” doesn’t exist now, but I can’t see it getting any better any time soon.
Subject Expert
This is a hard question to answer because there is so much variance in wants and needs. Have you tried making a list of what you want in a house, and looked to see what houses in that price range actually cost? You may be able to buy a house that you like at a price that is lower than what you could “afford”.
There’s also plenty of online calculators that show you what you can afford based on your salary / take home pay. Even the calculators on Redfin / Zillow will help you understand the typical monthly payment given a specific house and a specific down payment.
At the end of the day, you know your monthly budget / affordability better than we do.
Does your city offer a Homebuyer class? It’s a helpful guide for first time home buyers and some programs grant access to down payment assistance after completing the course.
Hire a structural engineer to do the inspection, in many jurisdictions after being presented with an inspection it has to be given to subsequent offerors if your deal falls through... gives you some leverage
When all else fails, use a mortgage calculator to see what you can actually afford. This is the very first thing that banks are going to do and they are available online with most banks for you to work with the numbers before you apply for a loan. You should have all of your current bills figured out, and a good idea of what electric, water, homeowners insurance, and such cost for that area. Be smart keep the payment lower than what you think you can afford. That way you always have wiggle room.