When should I stop renting and a buy a house? (lots of details in post)

[bbhaag]

I filtered out non-houses and < 3 bedroom places and moved the map to the areas I'm interested in living in (these are the areas where almost everyone I know lives). Nothing in that price-range: http://www.realtor.com/realestatean...-30.3330802160818/lng--97.8319261059571/zl-13

For what it's worth, just about everyone I know (including people in similar positions to me) live in that area in $300-600k houses.

Hey man I didn't mean to get your back up. I was just pointing out that the price range you specified seems rather large for a man in your position.

Keeping up with the Joneses is expensive but it sounds like you're ready to give it a go.

 

[Wreckem]

Hey man I didn't mean to get your back up. I was just pointing out that the price range you specified seems rather large for a man in your position.

Keeping up with the Joneses is expensive but it sounds like you're ready to give it a go.

In Austin, DFW, Houston and San Antonio. It is not so much keeping up with the Joneses as it is trying to have a sane commute and still live in a decent(lower crime) area.

 

[postmortemIA]

Seriously? You want your first house to be $300-500k? You have the wrong mentality. You need to start off smaller and move up after you build some equity. Do you plan on having a $60k - $100k down-payment for your home? No? Then DONT DO IT.

Making money off first house is going to take a while, the mortgage loan is structured in a such way that you pay a lot of interest at first .Really it makes more sense to buy perfect-ish house at first for at least these reasons
1. OP is single, he can tolerate huge mortgage payment first few years
2. inflation is going to eat the cost of the house long term, while rent goes up with the inflation.
3. same house is going to cost more each year (he rents)
4. Selling starter home is tricky business. Unless you can do it yourself, realtor is going to be 6-7% of your home cost, and if you're lucky you will not be in the hole

 

[Wreckem]

Making money off first house is going to take a while, the mortgage loan is structured in a such way that you pay a lot of interest at first .Really it makes more sense to buy perfect-ish house at first for at least these reasons
1. OP is single, he can tolerate huge mortgage payment first few years
2. inflation is going to eat the cost of the house long term, while rent goes up with the inflation.
3. same house is going to cost more each year (he rents)
4. Selling starter home is tricky business. Unless you can do it yourself, realtor is going to be 6-7% of your home cost, and if you're lucky you will not be in the hole

Highlighted the biggest part. Unless you are buying in at the bottom or in the downward cycle you will always end up paying more, sometimes substantially more, by delaying buying a house/the house you want.

 

[futurefields]

damn you make bank - 180k a year?

i would buy a house AND rent an apartment

what kind of car do you drive?

 

[WhoBeDaPlaya]

For those that think Texas is cheap, it's because the rest of Texas is cheap. My dad recently bought an almost new 1600 sqft 3 bedroom house for $110k.

Dallas is also nuts after State Farm et al. moved here.
Plano, Frisco, Murphy, same story.

So don't feel like you "have to" buy a house as part of becoming an adult.

+1 Most people are sticking to the generic script of "get first job, get hitched + kids, get saddled with big a*s car and mortgage payments". Why the heck wouldn't I enjoy my freedom for a couple of years and focus on career growth?

 

[bbhaag]

For what it's worth, just about everyone I know (including people in similar positions to me) live in that area in $300-600k houses.

In Austin, DFW, Houston and San Antonio. It is not so much keeping up with the Joneses as it is trying to have a sane commute and still live in a decent(lower crime) area.

Ok I guess I missed the commute part. My bad.
I say go for it Leros. If that's where your friends/co-workers live and you don't want that hectic commute every morning or driving very far to go hang out it just makes sense to look for home in that area.

I guess I was wrong.

 

[KentState]

You should be able to save substantially more than $60k a year and then buy when you have a nice reserve. By that time, you should have your life situations figured out a little more.

 

[squirrel dog]

what's the condo market like ? No grass to cut,no house to paint and being young and single you should have no trouble with the hoa .

 

[Leros]

what's the condo market like ? No grass to cut,no house to paint and being young and single you should have no trouble with the hoa .

I'm not a condo guy kinda guy. My shop is already getting cramped in my two car garage and I want to buy a small CNC machine and some metal machining tools.

 

[SP33Demon]

Solution is simple, buy a 2 or 3BR condo in an area where renter demand is high. Then when/if you leave in 2 years, rent it out. That way you're still getting increased equity value and not throwing rent away, while keeping your flexibility at the same time. Condos (especially ones with building washer/dryers) are really low maintenance. With your salary, it'd be easy to hire a company to handle your renter if you don't want to deal with it. Renting a house really isn't ideal with much more that can go wrong/break.

Edit: Ok, just saw that you don't want a condo because you want a workshop. In that case, find a smaller house you can rent out if you leave and hire an agency to manage the property when you leave. Smaller house because less space = less shit they can hoard and mess up. Make sure it's in a high demand area because of xyz (public trans, shopping, etc) though.

 

[Hugo Drax]

what's the condo market like ? No grass to cut,no house to paint and being young and single you should have no trouble with the hoa .

Condos are terrible idea.
http://livingstingy.blogspot.com/2008/12/never-buy-condo.html

1. You are not buying Real Property.

2. You are overpaying for what you are getting.

3. Prices can fluctuate wildly and go down dramatically.

4. Condo Boards are Hell.

5. Special Assessments are even worse.

6. All the pleasures of renting and all the pain of owning.

Let me review these items one at a time, and maybe you'll agree with me that you should never buy a Condo. Bear in mind that I've owned three and made money on all three. But even then, I don't recommend them to others or the faint of heart. I've also owned three "free-standing" properties and made much more money on those, as a percentage of the purchase price. You can make money on a Condo, sure. But you can make a lot MORE money on free-standing Real Estate!

 

[Fire&Blood]

-Avoid debt at any cost
-A wife will nullify all financial progress you make, reasonable women you hear about are so rare, consider them a myth
-Never assume that job security is set in stone and when making long term plans, assume that the next job you may have to take will pay a lot less
- until marriage, continuously divert some savings to where it can't be traced, your wife will have her secrets, keep this one secret to balance out her secrets (she will have at least one)

You said you are 27? If I could go back, I would spend at least the next 5 years in a spartan lifestyle, cut spending to a bare minimum. Forget the CNC machine for now. You are in your 20's, if everything you own can't fit in a 2br apartment, keep selling it until it does. I'm suggesting to give up a lot but life happens and you'll be better off if you make sacrifices now while you are young. I would rather have you start a "what luxury item should I buy" thread 10 years from now rather than solicit paypal payments to keep a roof over your head.

 

[Imdmn04]

If your future income stream is stable (high liklidhood that you will keep making what you make if not more), then you can build significant wealth by using your high income as leverage. Remember, even with a 20 percent down payment, you are paying a dollar for every 4 dollars of other people's money. But the appreciation of the house is on that entire amount.

You cannot get this kind of leverage anywhere else. If you know what you are doing, and can wait out the market in a potential downturn (the last 2008 housing crisis took 4-5 years to recover for decent real estate markets), then you should borrow as much as your are comfortable to do so.