Would buying a house be a good idea for me?

[SketchMaster]

To the point,

I have people telling me I should cash in on the housing market by buying a cheap home for 30K-55K, I'm not really set on the idea but there are some perks to the idea.

Here's where I stand:

I'm 23.
I have very good credit.
I have a good job in the tech field with a good outlook and lots of perks (fully paid health care, tuition reimbursement, etc...) but only make 30k gross due to lack of degree, however, I'm looking into fixing that.

Now the pros and cons I've thought of.

Cons:
Nothing is guaranteed, I could lose my job just like anyone else and then I'm screwed.
It might cut into my income enough that school may have a wait, an education is a better investment than a house.
I don't want to be stuck in Colorado for 15+ years.
Unseen costs that might be too much to handle on 30K, repairs, taxes, furniture and so on...
It's a very big step for someone that has only lived on their own for four months.

Pros:
Good investment.
From what I've seen just poking around, odds are I can find a nice home close to work that would fit in my budget.
It's not that much of a stretch from what I'm paying now for rent. And with my job perks helping with school I may be able to do both.
No more paying for others mortgage, I will own my own place.
The tax reimbursement will help cover things like repairs and the like and that may end this year so best to get in on it while it lasts.
If the market turns around in the next ten years I can always sell it and move on to greener pastures.

So should I shy away from buying a house and stick to renting? Or dive in and lay claim to a house?

 

[SSSnail]

$30K gross? You'll probably want to save up more by staying home with your parents for a few more years. My cousin, who's a pharmacist is still living with his parents so it's not necessarily a bad thing.

Secondly, you don't pay enough taxes to get reimbursed.

 

[Epic Fail]

30k home and you are not from Detroit, something doesn't sound right.

 

[guyver01]

Originally posted by: SketchMaster
I have a good job in the tech field .....but only make 30k

contradiction in terms....

30k is $14/hr ... that's not even ENTRY LEVEL IT pay... a phone monkey from Comcast makes that ...

i'd wait till ya get a good job.

i make $25/hr doing IT work and can barely solo afford house payments, utilities, etc... if my GF didnt work making good money too we could never afford the house..

 

[SketchMaster]

Originally posted by: guyver01

Originally posted by: SketchMaster
I have a good job in the tech field .....but only make 30k

contradiction in terms....

30k is $14/hr ... that's not even ENTRY LEVEL IT pay... a phone monkey from Comcast makes that ...

i'd wait till ya get a good job.

i make $25/hr doing IT work and can barely solo afford house payments, utilities, etc... if my GF didnt work making good money too we could never afford the house..

Oh trust me, I know this and I blame myself for being too eager to sign the offer they gave me because I was making absolute crap before then. To be honest I think your comment just broke me of the "it will get better" trance I've been in the past few months, you should see the crap I deal with day to day on that pay; I'm pretty sure you would call me a (bigger) moron.

Yeah, your right, house is in no way a good idea right now.

Better start looking for a college and or better job.

 

[guyver01]

Originally posted by: SketchMaster

Yeah, your right, house is in no way a good idea right now.

alot of people forget that Mortage is just ONE expense ..
you still have:
Homeowners Insurance
Gas
Water
Electric
Sewage
Trash
HOA fees (gah.. avoid HOA if possible)
Cable
Internet
Phone
Car Insurance
Grocery Bill
Property Maintenance (lawn mower, hedge trimmer fuels)

as someone who went from renting an apartment to living in a house, lemme tell ya...
when you go from a $20/month water bill to a $90/month water bill... it sure snaps ya back to reality

 

[SSSnail]

Originally posted by: SketchMaster

Originally posted by: guyver01

Originally posted by: SketchMaster
I have a good job in the tech field .....but only make 30k

contradiction in terms....

30k is $14/hr ... that's not even ENTRY LEVEL IT pay... a phone monkey from Comcast makes that ...

i'd wait till ya get a good job.

i make $25/hr doing IT work and can barely solo afford house payments, utilities, etc... if my GF didnt work making good money too we could never afford the house..

Better start looking for a college THEN a better job.

Fixed that for you, your primary investment right now is college. Don't let anything else distract you from that INVESTMENT. You can live now, and pay for the rest of your life, or pay now and live later.

 

[thedarkwolf]

Just depends on housing cost there. I bought my house when I was only making $20k gross but housing here is dirt cheap. Now I make a whopping $30k gross and have a lot of money left over and even at $20k I wasn't hurting for cash. No debt other then the house payments help.

 

[seemingly random]

Iff you plan on staying in the area for a few years and iff (assuming it's a fixer up'r) you are comfortable doing a lot of the work yourself, then I'd be looking over the next year or so for a house.

 

[L1FE]

I'm not really sure why everyone is so against you buying a house in that price range with your current salary. Maybe they're privy to a lot more information than I am, but we actually know very little about your financial status aside from your current salary. For instance, how much money do you have saved up? How much debt do you currently have? What kind of loan are you planning on making?

Even if you borrow nearly 100% of the total value of the house (let's assume $55k) at a rate of say 6%, your monthly mortgage is still only ~$330. Obviously that doesn't include mandatory expenses like fees, taxes, home insurance, pmi, etc, but given your yearly salary, you should be able to easily afford it. I mean, if you buy at the lower end of your house range, your salary is over 80% of your house's value. I mean, come on, that's like ridiculous. Unless you live some crazy baller lifestyle, I can see how this makes financial sense.

As for living in that house for extended periods of time, are houses in your area easy to rent out? If you're looking at buying the house for investment purposes, how is the growth in the area? Location means that your house may not appreciate that well, but it would still save you in taxes per year, and saves you from paying some other guy so he can build equity.

Then again, I'm probably really bad at math since everyone else is telling you it makes absolutely no sense.

 

[amdskip]

A house on your salary in the range your specified is perfectly affordable. How much down payment do you have saved up?

 

[Capt Caveman]

OP - if you plan on continuing with school and eventually moving then I'd wait.

 

[vi edit]

Millions of people do the same thing. Not a big deal. Just know that even with a low payment you could be looking at big repair costs. Water heaters - $600+. New roof - $5,000-$10,000. Heating/AC goes out...another couple grand. It adds up.

I'd suggest looking into a home warranty the first couple years until you can get a bit of a savings built up to cover repairs. On my $250k home that's close to 30 years old, a warranty runs about $275 a year.

It's paid for itself a couple times over (water heater replacement, a furnace repair, a thermostat repair on our oven, and a few other little things).