New Home need some advice (Cincinnati: real estate, apartment, rent)

[smilemax]

Folks,

I am a first time buyer.I would need some advice on buying a new home/condo/townhome versus renting in the Cincinnati NKY area. We are just a couple no kids..we are planning to be in the cincy area for the next 3yrs (max 4)
Would any of you think it would be prudent to buy a house and be able to make some money in this existing market or just rent for the next 3/4 yrs ?

If so any suggestions in the area. I am trying to stay less under 200k if psbl.

Any links to home appreciation rates in the cincinnati area would be really great to.

Thanks in advance for your time.
Smx

[Ohiogirl81]

While your upper limit of $200,000 shouldn't be a problem, I'm not sure how much money you're going to make in only three or four years. I'd rent a place as close to my workplace as possible, save up the $$ I'd be spending on gas, and buy a house after I move.

What kind of neighborhood are you looking for? Where will you be working?

[northwoodsman]

there are new homes open at fort scott in new burlington ohio not far from me
i know where it is

[jlrosen]

Originally Posted by smilemax

Folks,

I am a first time buyer.I would need some advice on buying a new home/condo/townhome versus renting in the Cincinnati NKY area. We are just a couple no kids..we are planning to be in the cincy area for the next 3yrs (max 4)
Would any of you think it would be prudent to buy a house and be able to make some money in this existing market or just rent for the next 3/4 yrs ?

If so any suggestions in the area. I am trying to stay less under 200k if psbl.

Any links to home appreciation rates in the cincinnati area would be really great to.

Thanks in advance for your time.
Smx

I would imagine it all comes down to a tax issue. you will probably break even or make money equal to inflation by buying, but you can take a mortage interest tax deduction and save some money. I would recomend prospect hill, you can find some nice places there. betts-longworth has some nice tax abated places for around your price range.

[new_to_town]

I think the market will continue to drop for another 1-2 years. Beyond that you will start to break even. It would also depend a lot on the area. Some places are dropping more than others. Places that typically appreciate now are more flat but at least not losing.

Compare what you would be paying in rent for what you'd need in the area you'd like to live in, versus the mortgage payment (minus your tax deduction) you'd have and the closing costs for buying and then selling. Then consider appreciation a bonus on top of that, in this market.

[Mircea]

Originally Posted by smilemax

Folks,

I am a first time buyer.I would need some advice on buying a new home/condo/townhome versus renting in the Cincinnati NKY area. We are just a couple no kids..we are planning to be in the cincy area for the next 3yrs (max 4)
Would any of you think it would be prudent to buy a house and be able to make some money in this existing market or just rent for the next 3/4 yrs ?

If so any suggestions in the area. I am trying to stay less under 200k if psbl.

Any links to home appreciation rates in the cincinnati area would be really great to.

Thanks in advance for your time.
Smx

What advice did your real estate attorney give you? If you don't have a real estate attorney, or cannot afford to retain one, then you can't afford a house/condo.

I doubt that you would even qualify for a house, except maybe with an Alt A or a sub-prime.

You'll need a debt-to-service ratio of 41% and have to put 3% down ($6,000 for $200,000) for an FHA loan (for which you might qualify).

Your mortgage would be $1,290/month on a fixed loan, plus home-owner's insurance, plus property taxes.

At the end of 4 years (48 months), you'd still owe $186,000 and you will have paid $49,000 in interest, meaning in order to make your money back, you'd have to sell the home for $235,000 or to put it differently, home values will have to increase 17.5% in your area in just 4 years.

That ain't gonna happen.

The best thing you could do is buy a book called Rich Dad, Poor Dad. It explains why rich people are rich and poor people are poor, which is because they act stupidly with their money and they make all the wrong financial decisions.

Rent yourself a nice apartment or condo, figure out what a mortgage, insurance and taxes would cost, subtract your rent then stick the rest in the bank and see if what you have left over is something close to the life style you want and whether or not you can really afford it (plus your saving money to make a proper down payment, which should be in the 40% to 60% range -- not 0%).

If you're going to save money, go long on the Euro. Keep 1/3 in US Dollars, 1/3 in Euros and with the other 1/3, buy Swiss Francs or gold (the real gold not the paper certificates that idiots are pushing on web-sites). Within 4 years $1 = 0.42 Euros. If you buy $10,000 in Euros today, you'll have 6,400 Euros. In 4 years you'll be able to convert your Euros back to US Dollars and you'll have $15,238 which means you'll have made $5,238 or to put it another way, you'll have made a 52% gain on your money.

You can't do that on the stock market.

I'll bet within 4 years one or both of you is unemployed. The US doesn't have a very good economic future right now (and no it has nothing to do with the sub-prime mortgage fiasco), so you might need that extra cash you made investing in Euros.

Take a lesson from the Israelis, who are demanding that the US give them their annual $200 Billion in foreign aid in Euros, not US Dollars.

[Ohiogirl81]

Originally Posted by Mircea

What advice did your real estate attorney give you? If you don't have a real estate attorney, or cannot afford to retain one, then you can't afford a house/condo.

I've bought three houses and sold two without the "help" of an overpriced attorney, and have done quite well, thankyouverymuch.

I doubt that you would even qualify for a house, except maybe with an Alt A or a sub-prime.

Since we don't know smilemax's household income, or what kind of down payment he/she has saved, it's impossible to say he/she won't qualify for a house. And there are plenty of great houses in Cincinnati to be had for less than $200,000 -- heck, for less than $100,000 -- so why scare smilemax with doomsday statistics?