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1 - If you're renting, you're already paying property taxes, it's just on someone else's property. Plus, you are paying their mortgage, repairs and maintenance, etc.
2 - It is definitely worth buying, even if you sell. You don't have to pay it off before you sell, you get to sell it for it's increased value (unless the neighborhood is going down in value, in which case, don't buy there), so you pay what you owe and still come out ahead.
3 - You don't HAVE to help your kids with college. It's great if you can, but your finances come first, otherwise you will never be able to help yourself and will therefore end up needing their help. They can go to community college, work while going to school, and whatever shortfall there is they can pay off quickly once gainfully employed.
4 - Your long-term plan of buying a home cash for retirement is great, but buying now can definitely fit into that scenario if done properly.
You may not be ready TODAY, but your situation in no way disqualifies you from owning. If done the right way, it will massively help your future.
We've gone over all of that forward and backward for years * . It all comes down to whether we are willing to spend over $1000/month just on property taxes. We live very comfortably as renters (financially speaking) and are not sure we want to give that up.
*Number 3 is non-negotiable. My husband I fought and clawed our way out of generational poverty, thus our first priority is making sure our kids get a better start than we did.
Last edited by Ginge McFantaPants; 12-03-2018 at 09:43 AM..
We've gone over all of that forward and backward for years * . It all comes down to whether we are willing to spend over $1000/month just on property taxes. We live very comfortably as renters (financially speaking) and are not sure we want to give that up.
*Number 3 is non-negotiable. My husband I fought and clawed our way out of generational poverty, thus our first priority is making sure our kids get a better start than we did.
I don't think your numbers are right for real estate taxes. Maybe it is, but if it is then you are already paying that as part of your rent. $1,000 per month is A LOT just for real estate taxes. Any and all landlords are going to cover that with what they charge you in rent. There is no way buying vs renting would bump you up $1,000 in real estate taxes.
3 is up to you, but there are ways to get through college completely debt-free. There are also ways to minimize cost and debt associated with it. Also, if they are getting a valuable degree which helps make them more marketable as an employee, they are going to come out of school and quickly start working. If they keep a modest lifestyle (keep cost of living down to the way they lived in college), they can pay that off very quickly. You not paying for it in no way means they are in poverty. Not to mention that even if you decide to help, there is still a MASSIVE range in which the cost can fall. There are lots of ways to minimize how much that costs them and therefore you even if you feel it is an obligation to help them. Helping them while they start with two years at a community college and then transfer in-state while they work full-time is very different than paying for out of state while they don't work. That's an important plan to make with them.
I don't think your numbers are right for real estate taxes. Maybe it is, but if it is then you are already paying that as part of your rent. $1,000 per month is A LOT just for real estate taxes. Any and all landlords are going to cover that with what they charge you in rent. There is no way buying vs renting would bump you up $1,000 in real estate taxes.
$12k/year is on the low end for Long Island property taxes. My rent is only $1700/month, so yeah, it would be a huge jump.
Quote:
Originally Posted by LLinVA
3 is up to you, but there are ways to get through college completely debt-free. There are also ways to minimize cost and debt associated with it. Also, if they are getting a valuable degree which helps make them more marketable as an employee, they are going to come out of school and quickly start working. If they keep a modest lifestyle (keep cost of living down to the way they lived in college), they can pay that off very quickly. You not paying for it in no way means they are in poverty. Not to mention that even if you decide to help, there is still a MASSIVE range in which the cost can fall. There are lots of ways to minimize how much that costs them and therefore you even if you feel it is an obligation to help them. Helping them while they start with two years at a community college and then transfer in-state while they work full-time is very different than paying for out of state while they don't work. That's an important plan to make with them.
We already have a plan in place. We live in easy commuting distance of 2 community colleges, 3 state universities, and probably half a dozen private colleges. They are free to commute to anyone of them, we will pay tuition and fees, they need to buy their own books, and if they want to live in a dorm or their own apartment they will need to find a way to pay for it.
I don't think your numbers are right for real estate taxes. Maybe it is, but if it is then you are already paying that as part of your rent. $1,000 per month is A LOT just for real estate taxes. Any and all landlords are going to cover that with what they charge you in rent. There is no way buying vs renting would bump you up $1,000 in real estate taxes.
Depends on where you live. Here in the Bay Area, that could EASILY be true - and renters don't typically incur that cost, because the property owners aren't paying current tax rates (due to Prop 13 etc) and/or own the property outright.
Example: I was paying $2100/mo including utilities for my old place, which was a 1br duplex with a yard in a nice neighborhood. According to Zillow it would cost me around $1.5 MILLION to buy the same unit, which would be waaaaay more than $2100/mo with mortgage + taxes. So yeah, it's still a better deal when you live in a high-COL region; not to mention, you'd have to come up with at least $300,000 cash for the down payment.
I recommend buying if you can squeak by and get a mortgage and find something affordable. At the end of the day, you'll own something. With renting, after years and years of payments, you'll have nothing to show for it.
I recommend buying if you can squeak by and get a mortgage and find something affordable. At the end of the day, you'll own something. With renting, after years and years of payments, you'll have nothing to show for it.
renting and investing elsewhere over the decades has made such a big difference compared to keeping our house that today we can subtract out all the rent we paid for decades and taxes and buy multiple homes like had here in nyc.
in fact we could never have taken part in the investment ventures we did if the money was still locked up in the house
many people do not do fair comparisons on so many levels .
for one thing we rarely buy the same house as we rent . homes in our area in queens start at a million , but we rent in a 2 bedroom 2 bath luxury building with pool and tennis courts for a fraction of what buying a home costs .
we could buy a co-op very similar to our apartment . it would run 6k a year less comparing rent to maintenance charges .
but once we account for the fact we would lose at least 12-15k a year in income on the money now tied up in the co-op renting has far better cash flow . we are retired so cash flow is king .
Fair. In areas with very high real estate values, you may certainly be in a more affordable rental. But also, it's not equal.
And, if you can't afford to buy where you are living now, maybe your income and that area's cost of living aren't a good match. It's not always easy, but finding work elsewhere may be in your best interest long-term. Simply throwing up your hands and saying 'we can't do it because we live in an expensive area' is a very narrow way to look at the situation and completely blinds you to other real options.
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I have seen a few older folks in my complex, but for the most part, they are youngsters.
