Would you buy a place?

[Scouzer]

The most important factor: I have no idea how long I'll live here. My company can move me anytime with 15 days notice. However, it is likely my assignment here will be 1-2 years.

My current place kind of sucks. It flooded a few weeks ago, and my rent is $700/mo for a basement 1 bedroom apartment.

I was looking at buying a 2 bedroom (not that I need the extra bedroom, but they are all 2 bedrooms) apartment condo for $135,900 plus GST (brand new).

If I mustered about $10k down, mostly by borrowing from my parents, my payment on a 25 year mortgage would be about $860/mo.

I make $55k/yr and buying this place would mean I'd have to sell my current car, a 2006 Pontiac Pursuit GT and buy something less expensive.

The other complication here is this is in the Canadian oil economy area, so if prices tanked on oil my place would become worthless instantly. A risk to be certain...

Would you buy?

 

[Ns1]

no

 

[GasX]

Draw a line down the middle of a sheet of paper.

Write all the good things / upsides of buying on the right and the bad things / downsides on the left.

should help you realize that buying is probably not the smart play here.

 

[mattpegher]

Sounds like a bad idea, but since you already thinking about buying a house why not start saving now for after this assignment

 

[Scouzer]

Originally posted by: mattpegher
Sounds like a bad idea, but since you already thinking about buying a house why not start saving now for after this assignment

That's what I'm doing. I'm opening my RRSP this year and doing $300/mo additions.

 

[Gunslinger08]

Wait. You can't afford an $860/month mortgage and a probably $400/month car payment on $55k a year? Where is the rest of your money going?

 

[Regs]

55k? Before or after tax?

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Though I would of never rented in the first place, not unless living with parents was out of an option. Renting is just pissing money away.

 

[Colt45]

haha, price of oil going down.

 

[Scouzer]

Originally posted by: Regs
55k? Before or after tax?

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Though I would of never rented in the first place, not unless living with parents was out of an option. Renting is just pissing money away.

Living with parents is not an option.

joshsquall: Bang on 30% of my income is instantly deducted off that $55k before I even see it.

 

[slsmnaz]

Originally posted by: Regs

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Huh? That just makes zero sense. I'm guessing you don't own a place. :roll:

Based on his income and the est payments he should be able to afford it easily. Where does the rest of your money go?

 

[dainthomas]

Originally posted by: Scouzer
The most important factor: I have no idea how long I'll live here. My company can move me anytime with 15 days notice. However, it is likely my assignment here will be 1-2 years.

My current place kind of sucks. It flooded a few weeks ago, and my rent is $700/mo for a basement 1 bedroom apartment.

I was looking at buying a 2 bedroom (not that I need the extra bedroom, but they are all 2 bedrooms) apartment condo for $135,900 plus GST (brand new).

If I mustered about $10k down, mostly by borrowing from my parents, my payment on a 25 year mortgage would be about $860/mo.

I make $55k/yr and buying this place would mean I'd have to sell my current car, a 2006 Pontiac Pursuit GT and buy something less expensive.

The other complication here is this is in the Canadian oil economy area, so if prices tanked on oil my place would become worthless instantly. A risk to be certain...

Would you buy?

Unless GWB is running the company, you're almost certainly good to go. Don't see why you'd have to sell your car either.

 

[UDT89]

i went for it, i bought my place.

i work two jobs to have it but i wouldnt have it any other way.

renting is a waste of money, and ur talking about only 150 more a month and whatever hoa fees there are.

dont forget the tax breaks, i'm claiming 5 dependents right now giving me an extra $300 a month take home.

 

[Capt Caveman]

If you're only going to live there for 1-2 years, hell no, continue renting.

 

[Regs]

Originally posted by: slsmnaz

Originally posted by: Regs

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Huh? That just makes zero sense. I'm guessing you don't own a place. :roll:

Based on his income and the est payments he should be able to afford it easily. Where does the rest of your money go?

I live in NJ.
Try it.

And of course I was being facetious about the 80k figure.

A one bed room place will cost around 1500 a month in NJ . That's about 1/3 his paycheck. Taxes, utilities, and association fees are another 1/3. Does not leave you with much.

 

[slsmnaz]

Originally posted by: Regs

Originally posted by: slsmnaz

Originally posted by: Regs

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Huh? That just makes zero sense. I'm guessing you don't own a place. :roll:

Based on his income and the est payments he should be able to afford it easily. Where does the rest of your money go?

I live in NJ.
Try it.

No thanks, I can smell it from here. (you should keep from giving bad advice though)

 

[Regs]

Oh let me be negative.

 

[UDT89]

Originally posted by: Regs

Originally posted by: slsmnaz

Originally posted by: Regs

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Huh? That just makes zero sense. I'm guessing you don't own a place. :roll:

Based on his income and the est payments he should be able to afford it easily. Where does the rest of your money go?

I live in NJ.
Try it.

And of course I was being facetious about the 80k figure.

A one bed room place will cost around 1500 a month in NJ . That's about 1/3 his paycheck. Taxes, utilities, and association fees are another 1/3. Does not leave you with much.

i live in long island. bought my co-op for $210. had it appraised for $255k. already had my PMI removed only 6 months after purchase.

trust me it can be done.

 

[Regs]

well in any case....(being that im being a complete idiot and snob)

I wouldn't want to rent.

 

[amdskip]

Why not buy something that is 30-40 years old instead and keep your car.

 

[Scouzer]

Originally posted by: amdskip
Why not buy something that is 30-40 years old instead and keep your car.

The next cheapest place is a house turned into an apartment thats 30 years old and 400sqft.

$99k

This is the second cheapest housing on the market.

 

[Ns1]

Originally posted by: UDT89
i went for it, i bought my place.

i work two jobs to have it but i wouldnt have it any other way.

renting is a waste of money, and ur talking about only 150 more a month and whatever hoa fees there are.

dont forget the tax breaks, i'm claiming 5 dependents right now giving me an extra $300 a month take home.

Yes, and let's not forget property taxes, repairs/maintenance, all kinds of crazy upgrades you (will eventually) want to do to your house, etc

buying a house is a fast way of living above your means

not saying it's bad for you, but it's definately not right for everyone

 

[UDT89]

Originally posted by: NeuroSynapsis

Originally posted by: UDT89
i went for it, i bought my place.

i work two jobs to have it but i wouldnt have it any other way.

renting is a waste of money, and ur talking about only 150 more a month and whatever hoa fees there are.

dont forget the tax breaks, i'm claiming 5 dependents right now giving me an extra $300 a month take home.

Yes, and let's not forget property taxes, repairs/maintenance, all kinds of crazy upgrades you (will eventually) want to do to your house, etc

buying a house is a fast way of living above your means

not saying it's bad for you, but it's definately not right for everyone

most repairs are covered with my maint. fees, taxes i more or less deduct as well as my interest, upgrade? not really everything was new when i bought the place.

its better than spending $10k a year with rent when ur basically paying someone else's mortgage.

 

[Gunslinger08]

Originally posted by: Scouzer

Originally posted by: Regs
55k? Before or after tax?

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Though I would of never rented in the first place, not unless living with parents was out of an option. Renting is just pissing money away.

Living with parents is not an option.

joshsquall: Bang on 30% of my income is instantly deducted off that $55k before I even see it.

Just like everyone else in America and Canada. You're taking home probably $38k after taxes. That's about $3166 a month. Where's the rest of your money going?

 

[AgaBoogaBoo]

If you're fine with stepping down to a cheaper car to save money, that might be a good choice if your next car will be just as reliable. Expensive cars aren't a good financial choice.

As for what to do, look at the following points:
1. Would have to borrow money from parents
2. Would have to get a mortgage
3. Home insurance
4. 50 other tiny things that come with ownership
5. You aren't even 100% sure of having your job in this location
6. Area is risky, values could suddenly plummit

First thing is, save as much as possible so that you can hopefully eliminate point #1. Points 2, 3, and 4 will happen with ownership anyway no matter when you do it, unless you can pay for the home upfront somehow. Points 5 and 6 are out of your control.

You can eliminate points 5 and 6 or at least reduce the severity of their impact by getting someone to room with you and you can charge them rent. This will help you because it will help you pay the monthly payments and at the same time, if their job isn't related to the same industry/business/whatever, and you had to move, at least you'd hopefully have one person in the property and you could work on getting another in there.

Last, where is all your money going? Save it, eliminate point #1, and wait till you have a better idea of where things are going. You don't want to have property in a risky area, especially when you aren't sure if you're going to be able to stay there.

Basically, I generally strongly support investing in real estate, however in your case, I'd recommend waiting for a while. Save as much money as possible... get that car paid off asap and reduce your monthly payments as much as possible, set yourself up to purchase something in 2-3 years from now. If it was a location without so much risk, I'd say to get a place and a roommate in there so that even if you had to move, you wouldn't be at a complete loss and could still try and get another roommate in there or just sell it off.

 

[Scouzer]

Originally posted by: joshsquall

Originally posted by: Scouzer

Originally posted by: Regs
55k? Before or after tax?

Yes, owning place is really expensive and will land you debt for a long time without making 80+ k a year. Especially if you're single.

Though I would of never rented in the first place, not unless living with parents was out of an option. Renting is just pissing money away.

Living with parents is not an option.

joshsquall: Bang on 30% of my income is instantly deducted off that $55k before I even see it.

Just like everyone else in America and Canada. You're taking home probably $38k after taxes. That's about $3166 a month. Where's the rest of your money going?

Well my base salary is $48k. I make ABOUT $7k in overtime a year, but I can't base a budget around that.

Expenses monthly:

Car $435.00
Rent $700.00
Cell Phone $45.00
Power $40.00
Insurance $118.00
Internet $45.00
Other (Groceries, splurge, entertainment) $400.00
Gas $150.00

Based on my own budgeting my take home pre-OT is $2850, so I have about $920/mo left after expenses. Right now I'm putting $500/mo into savings to buy a house, leaving me with $420 for other crap.

I can certainly AFFORD more, but it doesn't leave me with a huge buffer of income beyond base expenses. I'm financially conservative, I suppose.

My plan? $500/mo savings for 3 years which is also when my car payment will done. Then I will have $25k in the bank, a $10k asset and in sound financial position to buy a house. I will make BASE $55k at that point as well.

AgaBoogaBoo

Thank you for your constructive post. I am leaning that way as well. I'm not going to pay down the car though, only 3 years left at 0% . No point in paying off something that's 0%!

I thought about a room mate, which would certainly make it feasible for me. However, I'm not much into the idea of losing my privacy again. I'm a shift worker so noise levels have to be low at strange hours, etc. I don't think I want to go that route.

So I'm going to save like crazy!