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Location: Foothills of Maryland Blue Ridge mountains
993 posts, read 766,741 times
Reputation: 3163
I live in the DC area....so a different kinda market but it is not recession proof as some believe.
We made a lot of equity from the homes we owned by choosing our neighborhoods carefully. I would say you’re on track with your list. #1 priority is to buy into the highest rated school district possible. I would question why the house can’t be older than 30 yrs. if it’s in good shape basically....and other homes of the same age in the neighborhood are desirable and selling well. You might be ruling out an excellent school district in an area of older homes.
I plan to buy a house that is not worth much more than 1.5 times my yearly income
Is that reasonable ?
That sounds very reasonable. Also if you buy a house that is a 3/2 and the total mortgage payment is less then renting a 2/1 you are ahead of the game. Rents will continue to go up and the recession won't lower them and your mortgage won't go up besides insurance and taxes so check that first.
Look at how previous recessions/market crashes impacted the housing markets in certain parts of the country. I also would buy well within my means, regardless of where you decide to purchase a piece of property.
Avoid "Mistake Houses."
A "Mistake House" will be the first in your market to take a price hit, and may be very difficult to re-sell should you need to move on or cash out.
1. Flood plains.
2. Adjacent electrical power transmission lines.
3. Significant structural issues, particularly broken foundations.
4. Poor access due to bad driveways. Sloped up or down. Weirdly curved. Side entry garage that doesn't have adequate clearance for easy entry and exit.
5. Adjacent to loud commercial or industrial nuisances.
And, pay cash, or pay it off or pay down any loan.
Nothing frees you up in any market like not being encumbered by a debt that is more than resale value.
Avoid "Mistake Houses."
A "Mistake House" will be the first in your market to take a price hit, and may be very difficult to re-sell should you need to move on or cash out.
1. Flood plains.
2. Adjacent electrical power transmission lines.
3. Significant structural issues, particularly broken foundations.
4. Poor access due to bad driveways. Sloped up or down. Weirdly curved. Side entry garage that doesn't have adequate clearance for easy entry and exit.
5. Adjacent to loud commercial or industrial nuisances.
And, pay cash, or pay it off or pay down any loan.
Nothing frees you up in any market like not being encumbered by a debt that is more than resale value.
Pay cash?
Okay.
Seriously, I would rather see someone get into a solid-value house rather than wait until they have saved enough to pay cash for a house. Sadly, too many people struggle for years to find a few thousand for a downpayment!
The house that I am in has "poor access" due to a sloped driveway, and a side-loading garage that is hard to get into, and yet it had three offers within 24 hours of being listed. Location trumps everything else.
Here's my best advice: IF a recession hit and you lost 30% of your home's value, would you still be happy to remain there for a decade? Because in a decade, everything can turn around.
People tend to settle when it comes to life partners and homes. My advice: Don't settle.
If you wait for the best, you'll usually find it.
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