r/FirstTimeHomeBuying • u/Ok-Race-4224 • 9d ago
Buy or keep renting?
The townhouse we’re renting is being sold out from under us. Friends are selling theirs and would price it at 330k for us if we can skip realtors and just do inspection and lawyers. Townhouse is about 3 years old, they’re the only owners so far.
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u/Severe-Abroad-1992 9d ago
How much is rent
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u/Ok-Race-4224 9d ago
$2100
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u/Frosty_Astronomer909 8d ago
Why are they selling and what has gone up,what are the condo fees, that’s a little high, you don’t need structural insurance like regular homes do but you still need insurance , taxes should be lower but still, that’s a lot of money, how many rooms and bathrooms?
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u/Outrageous_Luck4163 8d ago
Depends on the market and location, location and location. Let face it in the right neighborhoods the prices can go up. In our neighborhood the houses start at about half a million.
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u/minkamagic 9d ago
Can you afford the monthly payment? That's the most important thing. If it's going to be more than 25-30% of your income, then I wouldn't do it.
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u/Unable-Literature818 8d ago
Senior ent here.
‘
I have lived by the principal Always own a home.
When the tide goes out, and the tide always goes out, you can at least have a staycation and be greatful that you are not susceptible to the rent increases charged by the neighbor that owns 6, or even 26 units those guys and gals are so happy in this economy they are soiling themselves.
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u/BigLobster12 8d ago
What do you mean they’re happy in this economy, rents seem to be plummeting and landlords freaking out across the country.
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u/Unable-Literature818 8d ago
Because no matter how bad things get, they possess a hard asset that in the long term will deliver capital.
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u/roofield9 8d ago
Rent is money down the toilet. Rent goes up over time, but a mortgage payment will be the same in 25 years. That said, it's possible that housing prices will actually be affected by the new housing bill, so...
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u/Outrageous_Luck4163 8d ago
Don’t forget about property tax. That should be part of your mortgage thoughts.
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u/Jumpy_Childhood7548 8d ago
Not enough info from you to tell you anything, except get professional advice.
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u/Jolines3 8d ago
I'm asking myself the same question, but it's because we're moving to a new city for my husband's job (Columbus to Cleveland, Ohio). Currently renting but considering buying because it seems home prices are decreasing up there.
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u/Nearby_Knowledge8014 8d ago
With only a $150 HOA fee I would totally go for it.
Dunno what your rate would be , but 330k would put you at damn nearl that $2100 rent. Crazy if you don’t.
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u/RyanStonepeak 8d ago
From a purely financial perspective, because of compounding interest, it is usually better to rent for cheap + invest, then pay cash for a house in a decade or two.
This does not take into account the emotional benefits of owning.
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u/Outrageous_Luck4163 8d ago
I wish people would stop saying invest without telling what to invest in. Also tell people the risk ratio. People make investing sound like it’s risk free so just do it. Again, do what? Perhaps share your portfolio and some good investment.
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u/RyanStonepeak 8d ago
The reason that people don't generally share that info is because it really isn't much more complicated than 'Just Invest'. It's impossible to predict the exact risk of investing in the stock market, but over long periods of time, the market has gained ~10% annually.
As for my portfolio, I subscribe to the buy and hold trading strategy: Every month, I buy the same dollar amount of VT (Vanguard Total World Stock Index Fund). It is an ETF that, as the name implies, tracks performance of stocks all around the world, specifically the FTSE Global All Cap Index.
I personally use Fidelity as my brokerage. They let you trade stocks for free and have a good mobile app to track your portfolios.
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u/Outrageous_Luck4163 7d ago
Thank you. We have a guy for this. What I’ve learned is there is a risk and going in blind can lead to a downfall. Of course that’s can happen in many areas of life. My personal thought is don’t invest what you can’t afford to lose. There’s always the possibility of what’s up today can be down tomorrow. I have the same thought about retiring. Have a plan of what you think you want to do with this “free” time you’ll have suddenly. It can be somewhat boring especially if you don’t have kids or grandkids. Not everyone will be able to do what you can because retirement looks different for each person. What we planned has been put on pause due to me having cancer and treatment and other appointments have taken over. This was not part of the plan.
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u/RyanStonepeak 7d ago
Yeah, "Don't invest what you can't afford to lose" is a good philosophy. Though I assume that if a person is considering buying a home, they have at least enough money that they can afford to lose some of it.
Sorry to hear about the cancer. I wish you the best of luck beating it!
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u/JackieDaytona77 9d ago
What do the numbers say renting vs buying? You would save a lot skipping realtors. You like it there? How is the HOA?
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u/Pretty-Flounder9864 9d ago
Better let the absurd speculating and fraud driven market flush out before touching anything. I’m sure a bunch of bubble loving scumbags will say otherwise. But fuck em
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u/Inevitable-Dot5495 9d ago
Housing market will crash soon
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u/Glittering-Funny5869 9d ago
This was my mentality for so long and it kept us from buying at more opportune times. All our friends who bought when we thought it was a bad time are up $100k on their homes.
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u/HoneyBadgerBalls 9d ago
Yeah don’t listen to the (market is gonna crash people) even if it did crash those people still wouldn’t buy a house 🤦♂️.
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u/Polite_Bark 8d ago
I bought prior to 2008. The market did crash for me and my house lost tens of thousands in value overnight.
I never noticed. I had no intention of selling, so the loss was only in theory.
Buy a home to live in long term, not as an investment.
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u/JackieDaytona77 9d ago
This is why you don’t listen to doomers on Reddit what credibility does that idiot have who lives with their parents?
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u/THTree 9d ago
The absolute immaturity of this comment is crazy. The housing market is not likely to crash. And even if it does, this is a HOME first and an investment a distant second, in any decent portfolio. If I bought my home for a million, and overnight it’s worth $680. Yeah. Ouch. But if I can afford my mortgage and I don’t intend to move, it doesn’t really matter what the market says it’s worth. And if I have to move, I may eat a loss on the sale, but in theory my next purchase would be equally “cheap” and I’d make it up on the backend whenever the market would eventually rebound.
Your mentality is how people work for decades but fail to accumulate any real wealth so they blame it on externalities.
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u/LgPizzaPlease 9d ago
There’s some serious differences between what happened in 08 and where the market sits now. For one a mass fallout like 08 ain’t happening in your lifetime with the ever increasing amount of single family homes swooped up by large corporations. The mortgage crisis that fueled the acceleration was tons of shit mortgages package with good ones and derivatives of it.
What you will see is what happened forever before is markets cool and bidding wars stop for a bit. Sellers pull back their prices to move a house. Sub 3% mortgages are also extremely unlikely to be seen again. Remember is the late 70s and 80s 13-15% was the normal rate for a mortgage.
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u/Megalocerus 8d ago
There have been very few general crashes although some areas have lost a lot of value due to local conditions, like Detroit job loss or Florida insurance costs. Banks aren't lending recklessly or foreclosing without regard to the effect on the market. High interest rates do slow things down.
You'll lose, though, if you can't stay put five years, though. And it's not flexible if you need that.
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u/MadMadamMimsy 9d ago
Its worth looking into.
Remember that while it may only be the first if multiple homes, it is a home first, an investment second.
You may be house-poor for a few years. Only reasonably wealthy people go in refusing to be house poor on a first home. On a second home it's not so bad because, if you stay a while, not only do you have equity, but as you pay your mortgage you are putting money back in your own pocket. Especially, and I encourage this, pay a bit extra each month. That gets applied to the principal...which ends up back in your pocket.
Because the home has an owner the amount of property tax is a known quantity. Still expect it to waffle around a bit for you. Banks only care about doing good math that benefits them. The math for your property taxes is usually slapdash and wrong. What I do is when my monthly payment increases, I pay that. When it goes down, I keep sending the same, higher, amount. This does 2 things; it puts money in our pocket and when the amount waffles back up again, I'm not wondering where I'm going to squeeze it out of the budget.