$154,120: Minimum income needed to afford median-priced OC SFR (Barstow: sale, rent)

[Electrician4you]

Originally Posted by man4857

Does this rule also apply to other things too? Or somehow it just magically applies only to real estate?

Maybe I should shoot for owning a Ferrari on my $50k income and find a way to get there eventually?
I mean just listen to yourself talk for a second. The absurdity is pretty amazing. How high of a price will make you stop? 1M? 1.25M? 1.5M? 10M? ...

Maybe your philosophy in life is different than most new buyers. Maybe you live to just work and pay bills. Others work to live it up by not paying bills unnecessarily.

The rule should apply or be thought of in everything people purchase that causes them to financially stretch to afford. While I understand life is more than just work pay bills and sleep stretching to the point where that's all you're doing is working to pay off debt isn't good either.
If you can afford it you buy and live life buy. If you can't that's a decision you make to be a debt slave. Some people chose to service their debt young in life. Others choose to service debt through their lives.

I mean if you make $50k a year and buy a a Ferrari I'm sure it can be done. Now being able to pay for it and maintain it would be tough. So you would eventually lose the car or it would stop running because you can't service it. So someone will come along and offer you a pittance for it. Same applies to a house.

People are going to do whatever they feel like. I have friends who are in forever debt. They chose that road. And I have friends who go on vacations for 20 days every 4 months because they can afford to.

[DawnW]

Originally Posted by HB2HSV

Perhaps you DON'T buy that $800K house with your $100K income but you buy that $500K condo and live there for a few years, save your money in the meantime, then sell it for $800K in the next upswing so you can buy that $1M SFR. Maybe by this time your salary has increased, or you have met someone who also earn a good income, and you can combine your resources for your "upgrade".

That's how people in the "good old days" do it. I had "friends" who told me that they would not live in this $hitty neighborhood even if I pay them only to have them jealous with envy when I sold my fixer upper and bought a nice house in a very desirable neighborhood.

Those who are not "determined" will always have excuses why they can not afford to buy a place of their own. Sell that $50K Lexus and don't spend more than $50 on a date. You'll find a way.

Unfortunately, those $500K condos and townhouses coming with steep HOA fees. And those can be raised on you without warning.

We had a friend who bought a $500K condo for his family and the HOA fees were $250/mo. Within 5 years of living there, they had gone up to almost $700/mo.

I would rather put that $700/mo towards a mortgage and get a $700K house.

The good thing about LA is that you can buy fixer uppers in decent areas and, if you are willing to get some sweat equity, you will do just fine.

That is not an option in a lot of cities where the older sections are actually no longer decent areas to live in and there is so much new construction that people don't want older homes, even if they are fixed up.

[man4857]

Originally Posted by HB2HSV

. I think my approach is consistent with SERIOUS home buyers today.

If you're only making $50K and living in OC, I doubt you can afford anything but a beater car. You can DREAM about a Ferrari but your energy are better utilized on something achievable, like save your money, work hard, and plan seriously for your future.

Don't spend money you don't have trying to impress some girls. You'd be more impressive if you are careful with your money and plan for your future, to the right girl and to her parents.

How is your credit score? I'd imagine it's pretty low if you are living it up and NOT paying your bills

Well, Americans in general are deeply in debt, so I don't know what "serious" homebuyers is anymore. More than 75%(I forgot the exact percentage), of Americans cannot come up with the cash for a $1000 emergency... That says it all.

Credit only means you're paying your bills on time. It doesn't say whether you made a good financial decision. One can buy a Lexus on a 25K income, but if they pay every month, then their credit score is good, even if they're homeless.

My point was, some people don't want to spend more than a reasonable amount of their income on housing... (as the rule of thumb says, do not buy a house over 3x your annual income.) If one follows that rule of thumb, you can expect them to actually pay off the mortgage and then do the whole "live it up" with less bills to pay

And if you really wanted to know, my credit score is over 800.

[DawnW]

And yeah, $150K income going to be difficult with a family for purchasing a home. Maybe as a single or a young couple.

[Electrician4you]

Originally Posted by DawnW

Unfortunately, those $500K condos and townhouses coming with steep HOA fees. And those can be raised on you without warning.

We had a friend who bought a $500K condo for his family and the HOA fees were $250/mo. Within 5 years of living there, they had gone up to almost $700/mo.

I would rather put that $700/mo towards a mortgage and get a $700K house.

The good thing about LA is that you can buy fixer uppers in decent areas and, if you are willing to get some sweat equity, you will do just fine.

That is not an option in a lot of cities where the older sections are actually no longer decent areas to live in and there is so much new construction that people don't want older homes, even if they are fixed up.

That HOA must of had some major financial issues or was horribly financially devastated. Maybe not enough money in reserves etc. I've own properties in HOAs and I have NEVER had such hikes. And I've owned for 23 years. We had a few assessments fir about a year for roofs 15-18 years ago but those went away. And NOBODY wanted to raise rates. We all understood why it had to be done. We had wood shake roofs and they were all bad.
Sure we had some hikes over time but it was due to raises in trash, water, pool services, maintenance. All expected. And I'm talking $15-25 hikes every 3-4 years not hundred a year.
It sounds like your friend is in a very badly ran HOA.

[teqp]

Originally Posted by Electrician4you

Be careful with accepting that kind of amount of money up front in California.

Why is that, if you don't mind me asking? I had a prospective tenant offer to pay 1 year up front. It was tempting, but they had dogs, so that ended that conversation.

[man4857]

Originally Posted by Electrician4you

That HOA must of had some major financial issues or was horribly financially devastated. Maybe not enough money in reserves etc. I've own properties in HOAs and I have NEVER had such hikes. And I've owned for 23 years. We had a few assessments fir about a year for roofs 15-18 years ago but those went away. And NOBODY wanted to raise rates. We all understood why it had to be done. We had wood shake roofs and they were all bad.
Sure we had some hikes over time but it was due to raises in trash, water, pool services, maintenance. All expected. And I'm talking $15-25 hikes every 3-4 years not hundred a year.
It sounds like your friend is in a very badly ran HOA.

I would think the whole point of purchasing property is to get away from the HOA as much as possible. But HB2HSV suggestion of buying a condo just seems silly to me.

[Electrician4you]

Originally Posted by teqp

Why is that, if you don't mind me asking? I had a prospective tenant offer to pay 1 year up front. It was tempting, but they had dogs, so that ended that conversation.

Because depending how it's paid it could be considered a deposit not payments. I had a few offers as such. You need to specify the payments and differentiate between what is security deposit and what is rent.

CA Civil Code 1950.5
https://leginfo.legislature.ca.gov/f...tionNum=1950.5

It also creates a issue if the tenant breaks the lease or violates it.

Originally Posted by man4857

I would think the whole point of purchasing property is to get away from the HOA as much as possible. But HB2HSV suggestion of buying a condo just seems silly to me.

It's a personal choice. Some people won't be caught dead buying in a HOA others run embracing them. If houses are unaffordable and you don't want to rent but still want to buy you go to what's next in the affordability totem pole. You can always sell and use the additional increase in value to leverage buying a house.
HOAs aren't for everybody. As a rental property I love them. I can project costs and (if needed) rent increases

[DawnW]

Originally Posted by Electrician4you

That HOA must of had some major financial issues or was horribly financially devastated. Maybe not enough money in reserves etc. I've own properties in HOAs and I have NEVER had such hikes. And I've owned for 23 years. We had a few assessments fir about a year for roofs 15-18 years ago but those went away. And NOBODY wanted to raise rates. We all understood why it had to be done. We had wood shake roofs and they were all bad.
Sure we had some hikes over time but it was due to raises in trash, water, pool services, maintenance. All expected. And I'm talking $15-25 hikes every 3-4 years not hundred a year.
It sounds like your friend is in a very badly ran HOA.

Actually he isn't the only one who reported high hikes, not as bad as the post I put on earlier, but others whose HOA went up significantly, not $15-$25 every 3-4 years, more like $50 per year or so.

But I hate HOAs of any kind.

[Electrician4you]

Originally Posted by DawnW

Actually he isn't the only one who reported high hikes, not as bad as the post I put on earlier, but others whose HOA went up significantly, not $15-$25 every 3-4 years, more like $50 per year or so.

But I hate HOAs of any kind.

Rates go up when services go up. And as for hating HOAs that's fine. They aren't for everybody. Best thing to do when you belong to a HOA is get and stay involved. It's amazing how many people are NOT involved and just sit and complain about "the board"

One of the HOAs had their "own" people. A bunch if us got together and questioned it. Now? Fir any major repairs they need three bids. contracts only run for a year. Then they gave to go out for bid again. Simply because we found that vendors are really good at the start. Then they get comfortable and the quality lacks. So this way we avoid that