could use some suggestions re: buying or renting house/apt/townhouse

[zixxer]

I live northwest of atlanta... I work in an area where a 'normal' 1500sq ft house is about $200k. I live in a townhouse and pay $1040 a month rent. (I have a roommate, so my half is $520).. I live about a mile from where I work.. no traffic... takes me less than 2 min to get to work.

So.. I'm considering buying a house that would make me have to 'commute' and take 20-30minutes to get to work. I can buy a decent sized house for 140k with that type of commute.


Opinions? keep renting, or move further and buy a house?

 

[Taggart]

Add 40% to the mortgage payment, that is what it will probably cost you in maintenance, taxes, etc. If you can afford that, then buy,

 

[nakedfrog]

Might as well move into something so you'll have money that's not being spent on someone else's mortgage.

 

[vi edit]

How long do you plan to stay there?

 

[zixxer]

Originally posted by: vi_edit
How long do you plan to stay there?

If I moved into a house, at LEAST 3-4 years. I would say 6-7 years would be a decent estimate.

 

[KingNothing]

The conventional wisdom is to buy a house if you'll live in it for five years. The commute is less important than the location of the house you're buying. If the 200k house is going to appreciate more and faster than the 140k house, and you can afford the 200k house, get that one.

 

If the 200k house is going to appreciate more and faster than the 140k house, and you can afford the 200k house, get that one.

Speculation is the mother of all f ups in the real estate game.

 

[vi edit]

Would you still keep your roommate if you bought the house?

I don't know...I would have a very tough time giving up a few minute commute for a 20-30 minute commute. I don't know if you could pay me enough to put up with Atlanta traffic.

At $550 a person, that's tough to beat. Sure you're not gaining any equity in the place, but it's not like it's costing you a ton of money either. All things considered that's pretty cheap.

I really don't know what property taxes and home owners insurance run, but those are items in a home that sneak up on you and can run quite a bit. When I get to Omaha I'll be paying about $500 a month just in property taxes and home owners insurance. And that's on a medium size home valued at $193,000. Then I've still got to tack on the mortgage.

Sure houses appreciate, but it really comes down to the market you are in and how much money you actually wind up with in the long run.

Plus you have to figure in your savings you have right now in gas, vehicle wear & tear, and personal stress levels because of the non-existant commute you have.

 

[zixxer]

Originally posted by: vi_edit
Would you still keep your roommate if you bought the house?

I don't know...I would have a very tough time giving up a few minute commute for a 20-30 minute commute. I don't know if you could pay me enough to put up with Atlanta traffic.

At $550 a person, that's tough to beat. Sure you're not gaining any equity in the place, but it's not like it's costing you a ton of money either. All things considered that's pretty cheap.

I really don't know what property taxes and home owners insurance run, but those are items in a home that sneak up on you and can run quite a bit. When I get to Omaha I'll be paying about $500 a month just in property taxes and home owners insurance. And that's on a medium size home valued at $193,000. Then I've still got to tack on the mortgage.

Sure houses appreciate, but it really comes down to the market you are in and how much money you actually wind up with in the long run.

Plus you have to figure in your savings you have right now in gas, vehicle wear & tear, and personal stress levels because of the non-existant commute you have.

I would still have a roommate if I bought a house. A 170k house @ 7% for 30 years is about $1100 a month. not including taxes, home insurance, etc.

I currently make about 32k a year. I would need to keep a roommate as $1100 a month on my own is a bit... high..

 

[Preyhunter]

As long as you buy at or below market value, nearly all real estate will appreciate over time. Unless you move into an area with crackhouses and high crime. The only difference will be the rate of appreciation.

Do you plan to take on a roommate if you buy a house? Will that be the only way you can truly afford the mortgage payments? Don't make any moves that will require you to be dependant on others to make it work.

 

[iroast]

buy a house/townhouse and rent out a room or two. they'll help pay off your mortgage and after 5 yrs, you can sell the place

 

[olds]

Buy. Think of all that interest you can write off.
edit
Not to mention the equity you will be building.

 

[Preyhunter]

How does Zim edit oldsmoboat's post?

 

[olds]

Originally posted by: Preyhunter
How does Zim edit oldsmoboat's post?

He's a mod

 

[DBL]

Originally posted by: SampSon

If the 200k house is going to appreciate more and faster than the 140k house, and you can afford the 200k house, get that one.

Speculation is the mother of all f ups in the real estate game.

Sure. Just ask Donald Trump and Warren Buffett. There is no reward without risk.

 

[vi edit]

Originally posted by: oldsmoboat
Buy. Think of all that interest you can write off.
edit
Not to mention the equity you will be building.

Everything is on a case by case situation. At only $32,000 a year, he's already pretty low bracket on taxes. It's not like he's bringing in $90,000 that he's got to offset $30,000 in taxes.

Plus for every dollar he pays in interest, he's only really getting back $.25 in reductions. Then he has to pay $300-$800 a year in home owners insurance he'll never get back. Plus the possibility of $40-$100 a month in PMI if he doesn't get a split mortgage he'll never get back. Plus upkeep on the house if it's needed. Plus a significantly longer commute time back and forth adding gas and wear and tear costs.

It's not a simple equation.

At his income level it's not as no brainer as people seem to think house buying is.

Houses are much more expensive than most people think or accept.

 

[olds]

Originally posted by: vi_edit

Originally posted by: oldsmoboat
Buy. Think of all that interest you can write off.
edit
Not to mention the equity you will be building.

Everything is on a case by case situation. At only $32,000 a year, he's already pretty low bracket on taxes. It's not like he's bringing in $90,000 that he's got to offset $30,000 in taxes.

Plus for every dollar he pays in interest, he's only really getting back $.25 in reductions. Then he has to pay $300-$800 a year in home owners insurance he'll never get back. Plus the possibility of $40-$100 a month in PMI if he doesn't get a split mortgage he'll never get back. Plus upkeep on the house if it's needed. Plus a significantly longer commute time back and forth adding gas and wear and tear costs.

It's not a simple equation.

At his income level it's not as no brainer as people seem to think house buying is.

Houses are much more expensive than most people think or accept.

Back when I was making that kind of money, I bought a house for $105,000. I was able to deduct +- $9000 a year in interest.
That gave me a refund of +- $2000 a year.
HO insurance was $650
No repairs.
Nine years later I have the house listed for $325,000 and will certainly get no less that $310,000.
Just my experience.

 

[Preyhunter]

At that income level and those housing prices, I'd recommend staying put. Consider the factors that vi_edit listed, as well as taxes going up each year based on increased property values year by year and escrow accounts (if you go the escrow route) getting screwed up and coming up short at the end of the year will only increase your mortgage payment.

 

[randomlinh]

damn... i wish i could find a house for 105 around here... heh... no way can i afford a house