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I bought my first home recently in a gentrifying/gentrified area in Houston. I am a single man without kids who makes about $200k/yr gross. I didn’t want to buy a condo because I thought that an old bungalow SFH would appreciate faster and I wanted to buy before the nasty Californians come and make this new home unaffordable for native Texans like me.
What nasty Californians? You're talking about nasty Texans, right? Cause that's all I see there.
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Originally Posted by Hopelesscause
I put a sizable down payment (45% of the cost) and now pay about $1,300 in monthly loan costs and another $1,200 in extortionary taxes and insurance. I still have about $550k remaining in cash.
Since you're single it doesn't hurt to have speculative home purchases. I'm in the process of selling my home (where I'll get a $250,000 capital gains tax credit having lived in it 2 of the past 5 years, actually been here 6 years) and building another where I'll live in it two years and rinse and repeat until I need to settle down.
I can't really comment on Houston as I'm on the east coast. From what I've heard Houston's a good market. I know my market I've recently had a couple go under contract in under 48 hours.
I personally would've just put the minimum down and financed it in this interest rate environment.
Quote:
Originally Posted by Hopelesscause
When I compare my property to others who are my age (friends, acquaintances), I am noticing that they bought less expensive properties, some of those with 2 incomes vs my 1.
and I have the biggest, most expensive one in my neighborhood and I'm one of the youngest.
It's not about what you have, it's about how you use it.
Most people my age would rather be traveling and out experiencing things, not taking care of a big home. Half my home is empty right now. 4000 sq ft is a lot of room for my dog and I. I certainly don't like paying for it, but it was an investment. I got three "free" buildable lots out of it.
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Originally Posted by Hopelesscause
I’ll admit that certain monthly expenses are higher than what I’d like ($310 electric bill, $84 util bill) and I feel pressure to reduce them. Maybe it’s the way that I was raised? I kind of feel like I should have bought a cheaper home, but have more $$ to blow on fancy vacations. I’m not materialistic in the slightest and feel like I have what I want. Fancy cars don’t interest me at all. My thought was to get home ownership out of the way while I deemed still “affordable”. Of course, I would have been better off if I had bought much earlier, but “coulda, woulda, shoulda”- can’t cry over spilt milk.
If it's an older home, that tends to just be how it is. My electricity bill is is $200-$250 (I figure you're using more A/C) and it's all LED lighting, nothing much more to do about it to try to get it lower without adding insulation, which is moot for the purpose of the property. If it was my forever home, I'd put in the proper insulation, update everything maybe not at once but eventually, change out the windows etc. Instead I've only done things I deem necessary to re-sell it. Only thing I wish I didn't do was upgrade the heating since that was a more personal thing. At least I still got it done for 1/3 the price a bunch of contractors I had look at the place bid for systems I didn't want. Had to do it myself obviously.
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Originally Posted by jencam
Your taxes are as much as your mortgage? Do you have your homestead exemption?
He put a lot of cash down, which is going to lower his mortgage payment relative to what it'd typically be.
Comparing ourself to our peer is one of those evil things we can't get rid of. I often have the feeling OP has, often see what my peers did and feel little left out by doing things differently. It always feels good when there are few other people who took similar path, the road is less lonely. For older millennial, housing and what is right move is a big debate and central of it all unfortunately is keeping pace with our peers.
My husband and I had the desire for big house when we saw many of our friends buy newly build houses. But we honestly were happy in our tiny old house in a poor neighborhood where we grew up in. most of our friends have moved out to the burbs. We both knew the only reason we wanted a house in suburbs was because everyone else had the big house with big yards. Like OP we though about appreciation value & what is best in long term. The conclusion we came to is, it is best to buy as much as house one can because
1) it appreciates better in value &
2) One can grow in place instead of having to change house as one gets older and needs more sqft. Eventually your friends with smaller house will move into a bigger house when they have kids. You will be in same page as them in few years
So we brought a big house, lived in it for very short bit and threw few parties & then realize it wasn't worth it for us. So we moved back to our tiny house, put our big house on rent. Have amazing tenants for 4 years. The house is paying for itself & our goal is one day when we need that space, we will move in to the house & mortgage will be far less. Yes tenants can make house messy and I am willing to put money for renovation when we do move in.
I made about the same as you but I always bought homes below what I could obtain a mortgage for. For instance, I was approved for a home that costs a little over $500,000 and yet I bought a home for $275,000. Nice Colonial on a corner plot backing up to a farm. I recently retired and my home costs me $209,000. Corner plot which I seem to prefer and a 6 foot Stucco wall around it for privacy. No mortgage and three bedrooms, big yard and lanai are perfect for the two of us. Less walking and cleaning plus our utilities cost much less. You will find that when you buy a house that is not near a big city or source of a lot of employment, you get a lot more for your money.
I think it much better to just get what you need and use that other money for other things. Serious medical issues can cost hundreds of thousands of dollars at times. We have no idea of what the future holds so best live with what you need and enough for some luxuries so you never have to worry. We almost went over to the dark side and were looking at large houses with an elevator in it and two kitchens and living rooms. His and hers Mercedes. In the end we got our ranch house and an Honda CR-V and it does not bother me at all because I can live my life without even investing in the stock market although I have 3% of my money invested just to have something to follow every day for fun.
My buddy struggled to buy a waterfront house 10 years ago (it was nice but easily 400K too much). He lived there for 10 years struggling to keep up and never had money left to actually buy a nice boat!
My buddy struggled to buy a waterfront house 10 years ago (it was nice but easily 400K too much). He lived there for 10 years struggling to keep up and never had money left to actually buy a nice boat!
Insurance and taxes alone were 3K a month!
But did it appreciate wildly in value? Mine is a quaint 17oo sq ft 100-year old bungalow on a lot of 5,000 square feet in an area where they can’t tear down buildings like these quickly enough to make way for condos. I just found out that the kindly older man next door is selling his bungalow to be razed for condos!- ugh. I don’t think that we’ve seen the end of the high-cost staters fleeing their sheetholes to live over here. At least, I am now locked in to today’s costs as another poster said.
I'm not a fan of spending at the limit you can afford unless you have to. IMHO it's better to spend what you can very comfortably afford and save money for emergencies and the future and fun things.
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