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Topic ClosedIs Buying A Home Wise?

 
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insomniac76 View Drop Down
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Direct Link To This Post Posted: Oct 30 2007 at 10:22am
Hi I actually know quite a bit about this subject. To be honest your paranoia is correct. The housing bubble is the issue. your house will soon be worth less than what you paid for it. on the upside you may lose money if you dont rent smart so its a catch 22. I was in that predicament also what i chose to do was rent out my home and moved into a cheaper second property that i purchased. The rent I collect from the first home pays for its own mortgage and 50% of the mortgage on my second home. so this way now i own 2 properties and im only coming out if pocket a few hundred dollars each month. I have very smart advisors, they have told me that if you want to consider home buying as an investment (which should ALWAYS be the foremost thing on your mind) , then the first property you buy should NOT be for YOU to live in but rather a property that you can rent out as RENTS are more stable in increasing than real estate prices so you are likely to actually make more money renting out your home than you would save by living in it yourself. THEN you decide based what you have left over, how much home YOU yourself can afford to live in. this will usually be something less expensive than the first home you're renting out. So for me NOW with this arrangement I am spending less money than i was when i was renting and I have much more property.
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AlabamaKinks View Drop Down
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Direct Link To This Post Posted: Oct 30 2007 at 9:01pm
 
Wait till your neighbors go for broke & start renting their condos out to Section 8'ers........I bet it won't be worth half a million then.
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Direct Link To This Post Posted: Oct 31 2007 at 9:48am
Originally posted by insomniac76 insomniac76 wrote:

Hi I actually know quite a bit about this subject. To be honest your paranoia is correct. The housing bubble is the issue. your house will soon be worth less than what you paid for it. on the upside you may lose money if you dont rent smart so its a catch 22. I was in that predicament also what i chose to do was rent out my home and moved into a cheaper second property that i purchased. The rent I collect from the first home pays for its own mortgage and 50% of the mortgage on my second home. so this way now i own 2 properties and im only coming out if pocket a few hundred dollars each month. I have very smart advisors, they have told me that if you want to consider home buying as an investment (which should ALWAYS be the foremost thing on your mind) , then the first property you buy should NOT be for YOU to live in but rather a property that you can rent out as RENTS are more stable in increasing than real estate prices so you are likely to actually make more money renting out your home than you would save by living in it yourself. THEN you decide based what you have left over, how much home YOU yourself can afford to live in. this will usually be something less expensive than the first home you're renting out. So for me NOW with this arrangement I am spending less money than i was when i was renting and I have much more property.
 
I agree, in my parents neighborhood its mainly military families who buy their house and then when it gets time to move they rent it out.  Some come back to the house later if they choose to retire, but most retire/ live somewhere else and just rent out the house in the neighborhood.  And the main people they rent to are soldiers who rather live in a house than in the barracks or an apartment, because they feel they have more freedom (play music loud, have barbeques, things like that) and its cheaper for them because they usually have roomates who are soldiers too, so everyone benefits. 
 
My first house I'm going to buy, its going to be for renting only.  (i still need to send you a house warming gift lol, I'll wait till Korea to get something nice for ya)
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Direct Link To This Post Posted: Oct 31 2007 at 3:18pm
well suze o. is on oprah talking about the housing bubble....this is an interesting thread bc i really would like to buy a condo next year wherever i go to grad school
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naijasbeauty View Drop Down
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Direct Link To This Post Posted: Nov 03 2007 at 9:32pm
This is a great article to read:

http://www.realgroup.com/Asset_Management/FinancialPlanning-Mortgage.pdf
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gapeach1978 View Drop Down
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Direct Link To This Post Posted: Nov 09 2007 at 11:35am
Honest i don't see the point in buying a house because you still don't own it until you make that last payment 40 years down the road so you are still renting, miss a house payment if you want to and see what happens they will put your stuff out just  as quick as if you where living in an apt. i think it's a waste of money if you are not able to pay for it right out in cash for the simple reason that zoning changes all the time one day you are living in a nice house and the the next day they are building a super plaza across the street and that makes your value drop
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Direct Link To This Post Posted: Nov 12 2007 at 9:24pm
Here is my two cents plain and simple.....
 PLain and simple yes a house can have its ups and downs but in the end this is where I live. I pay double payments so that I can pay my house off sooner and pay out less money. 15 years is def better than 30.
When I have paid it off ...yes I will have still have property tax but no payment...so I will be rent free.I plan to pay myself my own mortgage to save. Who wants to continue to pay out rent with no stability....you own nothing in the end that is the long and short of it. People must also live within there means, buy a house that is right for them, be sure of the type of loan you are getting.......you dont want an interset only mortgage, which is why loads of people are foreclosing now,you want a fixed rate if you plan to live in the house more than 5 years...This conversation could go on forever. In the end you have to decide what will be best for you and your future(family,etc).
 
A House or Apartment
Something to your name or rent for the rest of your life
In either case anything could happen to either place but at this point in my life( even with a soft market) I love my house.
That is what I chose.
 
 
PS. Hey BFD long time no speak...when are you paying me a visit....or better yet I need to come see your new spot....from the photos it looks great
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insomniac76 View Drop Down
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Direct Link To This Post Posted: Nov 12 2007 at 10:04pm
Originally posted by gapeach1978 gapeach1978 wrote:

Honest i don't see the point in buying a house because you still don't own it until you make that last payment 40 years down the road so you are still renting, miss a house payment if you want to and see what happens they will put your stuff out just as quick as if you where living in an apt. i think it's a waste of money if you are not able to pay for it right out in cash for the simple reason that zoning changes all the time one day you are living in a nice house and the the next day they are building a super plaza across the street and that makes your value drop


This is not all true. The difference is if you buy it, its yours to sell which puts you in a much better position than someone who's renting. Also if it increases in value then that increase belongs to you. This goes back to my last comment. If you're buying with the mentality that you're looking for a nice place for YOU to live then yes... you might as well rent. BUT if you are buying as an investment then you will put other factors into play when you shop. for instance, is the home in an up and coming area? or have the homes in this area already topped off in value. Is someone else going to see the value in this home should i chose to rent or sell it? or am i JUST buying for ME. You should be looking at you home like your going to buy a pair or really nice popular shoes that may or MAY NOT be 100% your own style but you know they will warm your feet and retain their value when you're ready to move on. By purchasing, you can increase your credit and net worth. by renting you never gain anything. BUT if you buying for your own pleasure you may find yourself in trouble if you have not thought it out. My friend bought HER dream house then had three kids and now that house is too small for her. She didn't factor in what someone else would think of the home nor the area. now she basically is willing to take any offer she can get. The home was great for HER but it wasn't a wise investment. Truth is she couldnt afford an investment home at the time so in her case she should have waited and purchased a home later.
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Direct Link To This Post Posted: Nov 15 2007 at 9:05pm
I really think it depends on the deal.  I bought my house brand new built from the grown up.  My fixed interest rate is 5.5%.  My taxes are extremely cheap due to the fact I live in an empowerment zone which means I get the tax break for 15 years.  I now have a husband and 2 kids and my mortgage is way less then rent here in Michigan.  We pay 600.00.  We have 3 bedrooms, 2 full bathrooms, an attached garage and unfinished basement.  My mortgage makes perfect sense.  So it really has to do with the deal.  Also when I bought my home I only made 30,000 a year.  Together my husband and I make 4 times that now.   So it truly has to do with the deal and looking in the long run.    
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Direct Link To This Post Posted: Nov 17 2007 at 4:27pm
You have to live somewhere, so why not own your own home?

It is important to get the right house and not overstretch yourself.

At the end of the day, who wants to be retired and still paying rent?
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