What would you do? (Opinions NEEDED)

[eastontracks]

love this thread. i live inside the loop but with rents increasing ive thought about investing in a condo as well. if i have only maybe 10% do you think its still a good idea for a condo or townhome?

[houstonfan]

Mat1226: Technically, it's also: Minus HOA dues, minus tax, minus realtor commission upon selling, minus amount you paid in interst for the mortgage, minus closing cost, minus lawn services, minus insurances, etc. You do gain a bit in tax write-offs.

You could still come out ahead in buying. Buy in some place where appreciation is almost guaranteed. Not arguing against buying at all, just pointing out a more realistic equation of home ownership.

[Faster10154]

Originally Posted by MAT1266

You should check out what you can buy with a $1500 a month mortgage and you’ll be pleasantly surprised at what you can get. If you buy something and sell it for what you bought it for, you will have basically lived there for free – minus upgrades and repairs. More than likely, if you buy near or inside the loop, you’ll do well. I would NOT suggesting buying in the burbs until you're ready to settle down. There are a lot of small condos for purchase in the city. Renting is just throwing your money away. Purchasing a home will build equity and credit. Just a suggestion.

OP, to make an apples to apples comparison with regards to throwing money away, you have to also note that you're still throwing money away when owning a home...it's part of the "interest, taxes, maintenance, hoa, etc.". Once you know that, you can figure out the exact amount you "throw away" in a house after backing out the portion of the mortgage that goes towards equity. This final amount "thrown away" can be compared to your rent, which is essentially all thrown away. If the house is cheaper, buy the house. It takes only a few minutes to figure this our. Make sure you also compare rent within a certain location and of an equivalent sized unit. You can't simply say an 800 sq. ft apartment for $1300 is a better deal than a 2500 sq. ft house for $2000.

This is an excellent tool for you to get started: Is It Better to Buy or Rent? - Interactive Graphic - NYTimes.com

For myself, I've built a spreadsheet with more personal information to determine how much I should buy.

[tc1209]

I appreciate all the opinions. Rent is crazy in the loop. My first apartment which I rented in late 2010 was $840 a month. That same exact apartment is being rented out now for $1050. The thought of continuing to rent and and paying 10-20% more every year in rent is not pleasant. using the 28% rule I can afford a monthly housing payment incl. insurance/taxes/hoa of ~$1,650. I would like to keep it lower but I would also most likely have a roommate helping pay a bit of that.

[tc1209]

I've come to the conclusion it is definitely worth it to buy. I can buy a 2bed/2bath 1600sqft townhome with a small yard for my dog and a Garage in the loop for 200k. Ive calcd monthly cost of owning around 1600. This is including Mortgage/insurance/taxes/upgrades/repairs/lawn maint./hoa fees/ Or the alternative of Renting a 1 bed/1bath 800sqft apartment at the apartment complex across the street from the house for $1,400/month. Pretty sure this is a no brainer. Townhomes in the area rent out very quick if that was ever an issue (I'm renting one nearby now). I subtracted closing costs and a generous commission for when i sale at an assumed flat price level (Same price as purchase) and I still end up saving over 2k a year assuming a 5 year hold. Am I leaving anything out or forgetting anything that is going to rain on my parade?

[HornedFrog34]

Originally Posted by tc1209

I've come to the conclusion it is definitely worth it to buy. I can buy a 2bed/2bath 1600sqft townhome with a small yard for my dog and a Garage in the loop for 200k. Ive calcd monthly cost of owning around 1600. This is including Mortgage/insurance/taxes/upgrades/repairs/lawn maint./hoa fees/ Or the alternative of Renting a 1 bed/1bath 800sqft apartment at the apartment complex across the street from the house for $1,400/month. Pretty sure this is a no brainer. Townhomes in the area rent out very quick if that was ever an issue (I'm renting one nearby now). I subtracted closing costs and a generous commission for when i sale at an assumed flat price level (Same price as purchase) and I still end up saving over 2k a year assuming a 5 year hold. Am I leaving anything out or forgetting anything that is going to rain on my parade?

Congrats on buying. I struggled with the decision for a few months and even upped my budget by about $40k, but overall I'm really happy with my choice.

If you haven't started looking yet, look at BBVA Compass for a mortgage. They have a FANTASTIC first time homebuyers program with no PMI, they waive all their lender fees, and they waive your first 3 P&I payments. The rates are a tiny bit higher but still really low and no PMI makes up for it.

I don't normally push large banks on people seeing I work for a small, anti-establishment bank, but BBVA's program is the best in the country right now. PM me with details.

[LaylaSD]

Very interesting thread. I'm renting a nice one bedroom apartment (700 sf) in a desirable area of the Galleria area (Augusta bet. San Felipe and Woodway), I'm paying $750. I also thought about buying a townhome for up to 130k, and looked at different areas, Westchase, Energy Corridor, Memorial West, I saw a lot of nice 2-3 bedrooms townhomes around my price range, but then I changed my mind and decided to stick to the Galleria area, and of course, that would limit me to condos vs townhomes, in the blocks that I really want. I only lived in Houston for 2 years, and only in the Galleria area. The inner loop does not really interest me, I know that's where everyone want to be, but I much rather this area. People say if you have not lived in the inner loop, you would never know what you are missing. I guess in this case I'm glad I'm missing out Of course, I looked there also, but beside the high prices, the HOA fees are ridiculous ($650+ at least). Anyway, I am closing now at a condo in a nice complex in Bering, my mortgage would be around $850 including the HOA fee and taxes, which is much lower than what I was looking to spend. It is only one bedroom though, but it is completely renovated. I looked at rent there last year, it was at $900+, so the mortgage is lower then rent. I see people warning people about buying all the time because of the possibility of depreciation, repairs, etc. But here is my take one this, ideally I wanted 2 bedrooms, but I saw this one bedroom and fell in love with it, and I went for it. If I don't buy, I will keep renting one bedroom apt. and at $750 a month, assuming for the next 15 years, the rent will not increase and I will not rent a more expensive apt., I would end up paying $135k in rent.

[ComeAtMe]

I was in the same position as you OP and my parents actually talked me out of renting. Instead I bought a 2,000sq ft townhome in east downtown. Mortgage is $1,100 with taxs/insurance about $1,545.

I rented out a bedroom on the 1st floor for 1k/mo and I am lovin it.

[Wldgstanglewood]

Townhouse in Westhaven Estates. End of story.