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I hope this helps people who are considering buying houses, it's not about how much you make, rather it's how you are spending the money
I started in socal in 2010, less than 20k between me and my wife, and currently have one kid
I was making 50k, and she was making 30k, today I'm making 90k from the same job, she changed several jobs but still making 35ish k today, so as, you can see, our income is between 80k to 125k, as mine is graduately increasing while wife is fluctuating between 20 to 50k
so with that income alone, I was able to purchase a condo for 240k (down 20%) in 2013, and then purchase a SFR house for 720k (down 15%) in 2018 and renting out the condo
so how can you not afford to buy good homes if you make more than me?
To be honest, a gross salary of 125k sounds like a stretch for a mortgage loan between 550-600k before you even factor in property taxes and home maintenance. I like to put 12-15% of my income in retirement and investment funds plus set aside some into a sinking fund for any repairs or new car purchases. Banks may qualify and approve people for these loans but it doesn't mean it is a good practice that everyone should follow.
To be honest, a gross salary of 125k sounds like a stretch for a mortgage loan between 550-600k before you even factor in property taxes and home maintenance. I like to put 12-15% of my income in retirement and investment funds plus set aside some into a sinking fund for any repairs or new car purchases. Banks may qualify and approve people for these loans but it doesn't mean it is a good practice that everyone should follow.
no it's not, it's no where near a stretch, let's just forget about the second property, and my wife's income for the time being
from my 90k income, I take home about 5k every month, after max 401 contributions/deductions etc.
my monthly payment for the 720k house is 3.3k piti
so I still have 1.7k to spend monthly on everything for a household of 3, and keep in mind that doesn't even considering whatever my wife or the second property is making from rents. The reality is that I pretty much spent all my income monthly, but my wife's income can be saved 100% for emergencies
I hope this helps people who are considering buying houses, it's not about how much you make, rather it's how you are spending the money
I started in socal in 2010, less than 20k between me and my wife, and currently have one kid
I was making 50k, and she was making 30k, today I'm making 90k from the same job, she changed several jobs but still making 35ish k today, so as, you can see, our income is between 80k to 125k, as mine is graduately increasing while wife is fluctuating between 20 to 50k
so with that income alone, I was able to purchase a condo for 240k (down 20%) in 2013, and then purchase a SFR house for 720k (down 15%) in 2018 and renting out the condo
so how can you not afford to buy good homes if you make more than me?
Where did you get the 48k downpayment? Did you have any college debt?
2010 is was during the recession after the housing crash. You were lucky to have a job. But making 80k? Yeah, 240k was right in the sweet spot of affordability for you, 25% of your take home. You had a good job and bought something in the middle of your range. Congrats?
240k was extraordinarily cheap for a SoCal condo. From what I see, there are some properties in the San Bernadino area for about that price, they are all 2-1s, <1000 sf.
You graduated college around the same time I did
College was about half as much for us vs. today. It is double as expensive now, and it will probably cost 40k a year for your kid. Hope you're prepared for 2035 level college prices because they will be out of this world.
The problem for someone today is that there's nothing currently in the Los Angeles area at that price range or close to it.
So the 2021 version of the 2010 younger you, would be in double the college debt trying to get a unit that costs twce as much, maybe making 10-15% more salary.
Last edited by redguard57; 07-19-2021 at 08:17 PM..
Where did you get the 48k downpayment? Did you have any college debt?
2010 is was during the recession after the housing crash. You were lucky to have a job. But making 80k? Yeah, 240k was right in the sweet spot of affordability for you, 25% of your take home. You had a good job and bought something in the middle of your range. Congrats?
240k was extraordinarily cheap for a SoCal condo. From what I see, there are some properties in the San Bernadino area for about that price, they are all 2-1s, <1000 sf.
You graduated college around the same time I did
College was about half as much for us vs. today. It is double as expensive now, and it will probably cost 40k a year for your kid. Hope you're prepared for 2035 level college prices because they will be out of this world.
The problem for someone today is that there's nothing currently in the Los Angeles area at that price range or close to it.
So the 2021 version of the 2010 younger you, would be in double the college debt trying to get a unit that costs twce as much, maybe making 10-15% more salary.
no, my income was only 50k in 2010, it was close to 80k combined with wife, so it wasn't hard at all to save and extra 30k in additional to the close the 20k that I had in 3 years while making 80k right?
the condo was purchased in 2013, it's was worth less than 200k in 2012, 1000sf but it's an okay rental these days
I didn't have much college debt because my parents are poor and I did work study while in school.
if you are talking about today's prices, you can still get a decent condo for 400 to 500k or house for 600k, even the price raised a bit, but the rate is like 1% higher when I purchased
I'm not worried a bit about my kid's college funds, first they have to graduate high school, and I believe it's their responsibility to pay for their education when they are 18. they could do what I did and do work study or part time jobs while in school, my parents didn't pay for my college.
no, my income was only 50k in 2010, it was close to 80k combined with wife, so it wasn't hard at all to save and extra 30k in additional to the close the 20k that I had in 3 years while making 80k right?
the condo was purchased in 2013, it's was worth less than 200k in 2012, 1000sf but it's an okay rental these days
I didn't have much college debt because my parents are poor and I did work study while in school.
if you are talking about today's prices, you can still get a decent condo for 400 to 500k or house for 600k, even the price raised a bit, but the rate is like 1% higher when I purchased
I'm not worried a bit about my kid's college funds, first they have to graduate high school, and I believe it's their responsibility to pay for their education when they are 18. they could do what I did and do work study or part time jobs while in school, my parents didn't pay for my college.
Well, the reason it worked out well for you is because you didn't have college debt, you got a decent job out of the gate, your wife is apparently an asset and makes you money not cost it, and property was more affordable when you bought.
Work study doesn't cover college by a long shot. I'm still confused how you came out of that without debt. Your kid will NOT be able to what you did. That was my point. He or she will be paying 40k a year for a mediocre state college, peoperty will cost 6-800k minimum, and salaries for middle clsss jobs might be 65k by that time. Indon't know about your college but mine has more than doubled since I left, and the first house I bought has since tripled.
Well, the reason it worked out well for you is because you didn't have college debt and you got a decent job out of the gate.
Work study doesn't cover college by a long shot. I'm still confused how you came out of that without debt.
I actually did have a debt, because I chose to get a master. it was only 40k though, because as I said, I did work study and part time job starting my third year undergrad, that obviously helped a lot.
I see people are telling others to start doing side jobs or doordash in additional to their current job in order to afford a house. I don't see that being the case, however, they should be doing these side jobs or door dash while in college, in order to minimize the college debt.
no, my income was only 50k in 2010, it was close to 80k combined with wife, so it wasn't hard at all to save and extra 30k in additional to the close the 20k that I had in 3 years while making 80k right?
the condo was purchased in 2013, it's was worth less than 200k in 2012, 1000sf but it's an okay rental these days
I didn't have much college debt because my parents are poor and I did work study while in school.
if you are talking about today's prices, you can still get a decent condo for 400 to 500k or house for 600k, even the price raised a bit, but the rate is like 1% higher when I purchased
I'm not worried a bit about my kid's college funds, first they have to graduate high school, and I believe it's their responsibility to pay for their education when they are 18. they could do what I did and do work study or part time jobs while in school, my parents didn't pay for my college.
Quote:
Originally Posted by maomao
I actually did have a debt, because I chose to get a master. it was only 40k though, because as I said, I did work study and part time job starting my third year undergrad, that obviously helped a lot.
I see people are telling others to start doing side jobs or doordash in additional to their current job in order to afford a house. I don't see that being the case, however, they should be doing these side jobs or door dash while in college, in order to minimize the college debt.
Makes more sense. You and I had a very similar debt load as well, and we both bought our first houses around the same time, mine was 2014.
I think you're not realizing at how what we did at the price we did it is not possible in current context even if someone tried. College cost me about 12k a year. It is now 26k. No amount of door dashing is going to defray that much. My first house cost me 125k. The same house is now 350k at least.
My starting salary was 45k. Someone new with those skills would come in now at about 57k.
It doesn't compute. The 25% in salary increase does not cover the 110% in college costs nor the 185% in housing cost.
Last edited by redguard57; 07-19-2021 at 09:43 PM..
Buying a second home is one way to do it, but you don’t necessarily have to go that route. You do have to plan things out. When your children are born, you make it a goal to move to a location closer to a state university by the time your oldest child reaches college age. You start planning from day one. 17 years is ample time to save up enough money and build enough home equity to make the move happen.
So everyone with kids needs to move to a college town huh? Read your post out loud and see if that suggestion doesn't sound completely asinine.
A lot of people can't afford homes due to inflation, investors, and a housing bubble.
I've read that one way to tell that we're in a housing bubble is that prices are so high that houses are not affordable to the average middle income family, and a large percentage of real estate is being bought by investors rather than owner-occupants.
However, it could be also argued that houses have not been affordable for decades.
Makes more sense. You and I had a very similar debt load as well, and we both bought our first houses around the same time, mine was 2014.
I think you're not realizing at how what we did at the price we did it is not possible in current context even if someone tried. College cost me about 12k a year. It is now 26k. No amount of door dashing is going to defray that much. My first house cost me 125k. The same house is now 350k at least.
My starting salary was 45k. Someone new with those skills would come in now at about 57k.
It doesn't compute. The 25% in salary increase does not cover the 110% in college costs nor the 185% in housing cost.
but if I could buy a 720k house in 2018 at rates at least 1% higher than today, while making less than 120k combined, not to mentioned having to already bought once in 2013, people making more than me should have no problem buying properties at 600k to 800k at today's rate
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