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You can buy a nice house in a safe area in Elpaso, for around 200,000 I looked at Phoenix prices for 200,000 you don’t get as much at all.
That's true. In Phoenix, it seems like you can still get "decent" houses for about $300K on the outskirts of town. However, the property taxes in Maricopa county are much lower.
Do you think I could get approved for a loan and get a house in the upper 200s in this market? I've seen some homes in some of the outer suburbs going for about 290K, but they don't stay on the market long.
I recommend buying a townhouse or a condo in an affordable area. That’s what I did when I started out.
You should already be in touch with a realtor when you’re looking to buy. Jump on a listing you like as soon as it comes up.
I'm 25 and have a relatively low income. I have no partner to split expenses with, but I really want to get my own house. The market is hot, so I'm not sure if I can even afford one right now (looking in both El Paso and Phoenix). Houses in El Paso are cheaper, but the property taxes kind of wash out with the higher price tags on homes in the Phoenix Valley.
Do you think I could get approved for a loan and get a house in the upper 200s in this market? I've seen some homes in some of the outer suburbs going for about 290K, but they don't stay on the market long.
About me:
- $57K annual income at my W2 job. I also make about $1,000 a month with my side job but the income isn't always consistent.
- $150K in the bank and in my personal investment account
- $15K in my 401(k)
- 740 credit score
Thanks for any tips! I'd also be willing to rent out a room to help with the mortgage.
May I suggest landwatch.com?
Quick search gets this
Check out this property I found on LandWatch.com: 15210 Radlite Drive, Texas, El Paso, 79928
I don’t really have anything to add except you are doing great for a 25yo. I wouldn’t consider your income (+ side money) low at your age. Your savings are also impressive. Keep up the good work!
What do you get for that HOA fee? HOA fee inclusions/exclusions are all over the map.
My HOA fee is ~$210/month and the HOA maintains and insures the roof and exterior walls/structures (~$100/mo value) and does all the landscaping outside my unit and in the common area (~$200 value assuming I can even find someone to mow the lawn these days). I've seen some communities cover trash and water too which can add up to $50-100/mo. There's a second master HOA that maintains all empty land in the area and parks and stuff.
First, while $57k is "high/rich" income in Podunk Missouri, and "below poverty" in the bay area, overall hour income is not "low", though it may be for your field, regardless where you reside.
Next, you're only 25, so don't sell yourself short.
Third: buy only the house you NEED right now. I'm going to be 58 shortly, and I live in a 2br/1ba 750sqft "starter home" bungalow..it was the lowest priced house in a very good neighborhood, as well as the smallest.
My one neighbor has 800 sqft, with a second floor expandable "attic" (you can't stand up in mine), the other side is a 1400 sqft 3br/2 ba brick ranch.
I'm in the north, so I have full basement and attached garage. Behind garage was loosely enclosed screened porch which I finished off into 4 season room.
Taxes will reflect what you own. A smaller house with no pool on the hot south, will be lower on taxes. Smaller footprint will result in lower taxes.
The decision should be WHERE you WANT to live, WHERE you have the most salary growth, not so much on taxes.
If your income doubles in 5 years, a tax struggle now may be of little consequence in 5 years.
Also, you make no mention of future plans... marriage (or did I miss you are already married? But I don't think so), Kids, number of kids...when you want to retire (hopefully)...etc.
A home is nice to own (unless you like to rent), but it's not a necessity.
What about renting a 2 br apt and sharing it with a roommate? And save more for the Eventual home?
Sure, I'd love a 3rd br, a formal dining room (my bonus room corner works), even a two car attached garage, but I own what I NEED (there was two of us.. spouse and I are separated).
I live in NY, a high tax state, and 62% of my mortgage payment is tax escrow...at only 10% down. It is for neighbor s, too.
And my 800 sqft neighbor said the town wants to up the taxes to "ASSUMED current market retail" pricing. Ugh. She got a letter about it, I didn't.
Maybe it's because she has full height expandable second floor (in back, front is angled roof, but stand up able).
I live here because, fir now, I'm needed to look after my father, who is alone, as he nears 90 and is going blind.
Where I plan to move to in the south for retirement (not TX or AZ) is a joke on property taxes compared to here!
I laughed out loud at the property taxes the first time I investigated that area!!!
The taxes I pay come WITH the state I reside in and the size of the property I own.
~~The one rule of real estate; after "location, location, location" is: buy the smallest crappiest cheapest house in the best neighborhood you can find.~~
Follow that,maybe do some diy, (learn as you go), and you'll find something that works.
I'm already seeing houses in our neighborhood sitting and looking at the listings online they are reducing the price. I'm in the northern Virginia market and it's was really hot here for a while, and still is in most regards but it definitely has slowed down.
Feel free to not listen, but just remember the last housing run up was caused by people thinking they had to buy a house today because they would be priced out forever. At least loan standards are stricter but that's not stopping people from waiving inspection and appraisal contingencies.
The house I'm living in was a byproduct of the housing crisis. In 2000 it sold for 130k, in 2005 315k, in 2006 390k, in 2008 the bank bought it back at 270. I bought it in 2009 for 162k, fixed it up and rented it out for 10 years. Fortunately I had ended the lease and took it back before COVID-19 because I wanted to live in it. I put hardwood throughout, new kitchen and master bath, fully painted and now Zillow has it for 416k. I refinanced late last year at 1.875% and now my principal and interest is $309 a month with 74k on the mortgage lol
Buffet's adage of being fearful when others are being greedy, and greedy when others are fearful come to mind.
OP what makes you want to buy a house right now? Your young, single, make a decent salary and have good size assets so now it's the time to grow those assets. You can still have a large net worth without being a homeowner as well.
Two things, and for sure there is some self-selection bias in play, in the aggregate homeowners are many times more wealthy than renters.
The Great Recession was more about people who were abjectly unqualified taking out loans anyway.
Personally I wouldn't buy a $300,000 house if I were in your shoes. That's an example of stretching yourself beyond your means. I would spend less than $200,000 if possible. A house will also sock you with unexpected maintenance expenses. I also HIGHLY recommend not getting a house with a HOA monthly expense. This monthly expense will end up only increasing--it will NEVER go down. It's part of the budget that has NO wiggle room, unlike a cell phone or cable TV that you can eliminate if you get in a bind. It also makes selling the house much more difficult, because a lot of people don't want to pay HOA expenses.
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