Anyone buy house below their means? (sell, prices, old, price)
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About 28 of the 70 current unit owners in our Condo paid over $1M for their units in the 2005-2006 time frame. On average, today's market value is about $450K. These 28-owners are the ones who could afford to 'wait/hold' (mostly 2nd homes) ....after 30+ other 'investor/ 'flippers' were forced out in 2008-2011 by their inability to support the debt load on properties that lost over half their value. There was a lot of craziness going-on during 2005-06 among people paying more than they could really afford.
Higher maintenance costs
Higher utility costs
Higher real estate taxes
Higher HOA fees
4 bedroom house built in 2005
No major maint costs only been in one year.
$130/$65 for power/water
$1600 a year taxes
$35 a month hoa.
I think people seem to go two ways.... way to big or way too frugal. Yes we could have gone smaller but we wanted to plan for the future. As I have said I saw lots of people with starter homes, that despise their houses but are stuck in them.
I bought a house I could afford and plan to stay in it for awhile.
Thee old rule is 2-2.5 times your annual gross income to buy a house. So has anyone bought a house for $90,000 when they were approved for $300,000? Just think you save in my area $3,000+ a year on taxes by buying a 90K house over a 300K house, plus you save $210,000. I always hear "when you have kids you'll want a bigger house but I grew up in a 1,000 sq/ft house and space was never an issue simply because you do not know any better. I imagine for my CD Friends who live in a 3,000+ sq/ft house this might seem nut-so, but you really don't know any better and are used to it so it really isn't an issue.
Question is very subjective I know, but I am asking for responses from people who bought a house they needed as opposed to one they wanted? here let me ask it this way, if you could pay off that 90K house in 10 years what would you say? I mean, this leaves a whole bunch of money for travel, country club, yacht club or extra car, college fund or retirement fund.
So Who bought a lower priced house when they were approved for way more?
I just bought my 4th home, and have never bought a home even close to what we were approved for.
The house we just bought 3 years ago is about half of what we were approved for. Great location, nice neighborhood, and decent schools. Needs work, but mostly cosmetic.
Bought a fixer in an up and coming/convenient neighborhood in Louisville for 79,900 at the height of the market in 2005. Did some upgrading to the tune of $10,000 or so during the next couple of years. Job relocation forced us to move in 2008. Rented house out until we could sell for a decent price. Sold for asking price of $105,000 in less than 3 months in 2011.
Bought a fixer in a convenient neighborhood in Cincinnati for $74,200 last summer. Approved for $200k. Currently upgrading house in our spare time and as money allows. Huge brick house built in 1928, 2300 sq ft, 4 bedroom 1.5 bath, 2 car garage. We are anticipating an approx. value of $110-$115 when our neighbors sell their 2 bedroom house. They are currently listed at $124,900. Their house is fully renovated and beautful, but much smaller and the layout is not as desirable as ours. We have a new state of the art hospital opening less than a mile down the street, and we are close enough to walk to a small, downtown bar/club district.
We are doing pretty well buying far below our means as a two income, one child couple. I would recommend it!
stealthrabbit how did you manage to self-fund your RE? by that you mean no mortgage?
I live in the Wash. D.C. area
1) no area I want to live in has houses far enough below 2.5 my salary to be worth talking about
2) I can't imagine saving enough money to pay cash for a house (primary or investment) that wouldn't need so much work as to be prohibitive for that reason alone.
(granted, I COULD save a lot more money than I do. But I'm honestly not going to scrimp and save and live like a pauper, in an unsafe neighborhood, not own a car, and as Dave Ramsey says -- eat rice and beans -- and do all kinds of other things some people will do)
When I bought my house for 220K I was making about 85K. Bank was going to approve me for 250K. I said don't bother, keep it at 225K.
I suppose 225K is not much to folks in LA, NY, HI, etc...but these house prices of $75,000 and $90,000 crack me up.
We've always bought less house than we could afford. There are lots of other things I want to do with my money besides spend it on housing.
i wouldnt mind spending more on my house. its property taxes and utilities that bother me when considering getting a more expensive home.
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