Just curious how you guys are invested in your houses. After the post last week about if your house was paid for it made me think.
Our home was purchased for less than 1 year annual salary. We should be paid off completely this year after living here for 3 years. Wife wants to move to the country. Houses are more expensive but I would like to have a little more room to roam for the kids. Looking at 5-10 acres mostly.
My question is guys that are mortgaged on houses how much over or under your yearly income is it. And if you are 2x-3x yearly income do you feel like it keeps you from enjoying other activities?
Not trying to pry, just don’t want to be balls deep in a house and give up some of the other outdoor activities we enjoy.
David
Heard today that rates edged up to just under 3% which is still historically low.
Not much help but you should be able to stretch things a bit with rates this low especially if you believe inflation is about to rev up any.
House has got to fit the budget. I have always bought much less of a home than what the banks were willing to give me. Didn't want to be "House" poor.
i was told 3-4 times your salary. but i grew up with depression era parents who scarred me with horror stories so i always bought way less than i could afford. i spent more money on property than house.
House has got to fit the budget. I have always bought much less of a home than what the banks were willing to give me. Didn't want to be "House" poor.
Same here. I moved eight times in 39 year career. Always was conservative on house cost. Paid the last one off half way through a 15 year mortgage. Now retired and have lot more expensive house. Was able to pay cash cause I was not stretched over the years and saved a lot.
My house right now is worth about 3x my annual income. When I bought it five years ago it was worth about 1.5x my annual income.
2x my annual income. I’m in my mid 40’s and getting divorced I wanted something close to my 4 year old daughter to lesson the impact on her. I found a home 5 blocks away on the other side of the same subdivision in a town of only a few thousand people so somewhat limited housing options. For me it was about location over anything else it’s an average middle America home in a good neighborhood but to me it’s just a place to store my guns and toys until my daughter is grown and I can retire up North.
It was on the upper end of what I wanted to spend at my age and place in life. I considered mortgage options and decided to go with 30 years due to the very low rates and that it allows me to continue investing 22% of my gross income. I liked the idea of a shorter mortgage and having it paid off by retirement age but felt that given the interest rates now and the market over the past several years that I was better off with a long mortgage and investing as much as possible right now. IDK if that was the right decision or not but that was my reasoning when I did it.
My quality of life is good. I’ve had most of the hunting and fishing toys I want for years. I blow money going out for meals more than I should. Gun collecting is my biggest weakness finance wise but I view that to some degree as a partial investment.
I paid 15% of my annual salary but then again I'm cool with a cabin. Leaves more money for toys👍
Paid about 80 percent of annual income for my house in the country. Around here lately, any decent house with even two or three acres of ground is going for an absurd price. Its a seller's market now. I don't regret buying well below my income level but do admire people who are less conservative than I am. They have nicer homes than me.
I've regretted buying every house I've owned other than the land with the cabin I currently have. First place was in the early 1990s in Oakland, paid $110k while making $30k a year. I've made a few bucks on each place I've bought (and they all seem to have cost 3-4x my annual income), but the headaches of maintenance, repairs, never-ending costs and bad neighbors outweighed any profit. The bit of land with a single room log cabin has given me more satisfaction than all of the houses combined, and out of pocket was less than $100k all in.
About 30% of my take home salary. Not a large lot or home but one that’s comfortable with the wife and 4 pups. City water and sewage but country living. I’m satisfied since I have the cabin to escape to where I can have the well and septic headaches.
I paid 15% of my annual salary but then again I'm cool with a cabin. Leaves more money for toys👍
If not for location proximity to my daughter I’d be in the same situation.
Something clean and with running water/flush toilet is good enough for me.
Paid 72,000 for 2200 sq ft in 97 & paid it off two weeks ago.
Never thought of price if it suited me, only thought of getting busy and paying them off, absolutely no regrets.
At current mortgage rates, you've got to have a mortgage or two or three. u
I paid $95,000 for my 1bedroom1bathroom1cargarage condo in 2018.
Last year I bought 25 acres, that ran $107,500.
Eventually I will get around to building on the land and the condo will be a rental property.
I've regretted buying every house I've owned other than the land with the cabin I currently have. First place was in the early 1990s in Oakland, paid $110k while making $30k a year. I've made a few bucks on each place I've bought (and they all seem to have cost 3-4x my annual income), but the headaches of maintenance, repairs, never-ending costs and bad neighbors outweighed any profit. The bit of land with a single room log cabin has given me more satisfaction than all of the houses combined, and out of pocket was less than $100k all in.
Hard to put a price on serenity and satisfaction.
First house $65,000 (did all the work ourselves) was making $32,000/year combined.
Renovated and added on to it, paid cash. Built shop, paid cash.
Best plan for my situation was to borrow minimal, live beneath our means, save and pay cash as we went to get it where we wanted.
Cabin, paid cash as we went. Rentals, put down what was required, renovate as time snd $$ allowed, build equity over time.
Real estate, for me, is preferred. It’s what I know and feel comfortable with.
Interesting.. Guess I am in just over 25% of gross. It's a bit much, but, location is everything, 309 yards from the folks, front door to front door. First house. Zero regrets.
I ho I ho I ho off to work I go.
Talk to lender. It is not only what your annual salary is but how much of that is committed to other payments.
When I was in the business if i remember correctly it was 40 of your annual income.
Our area had lots of service men & women returning from overseas assignments and the first thing many did was buy a new car/truck. Sorry no loan while committed to this.
I've regretted buying every house I've owned other than the land with the cabin I currently have. First place was in the early 1990s in Oakland, paid $110k while making $30k a year. I've made a few bucks on each place I've bought (and they all seem to have cost 3-4x my annual income), but the headaches of maintenance, repairs, never-ending costs and bad neighbors outweighed any profit. The bit of land with a single room log cabin has given me more satisfaction than all of the houses combined, and out of pocket was less than $100k all in.
Hard to put a price on serenity and satisfaction.
Plus 1
MT is a massive upgrade from CA.
Paid about 1.5 our annual salary. Is connected to my wife’s grandparents farm. Neighbors are folks we went to high school with and are some of the best friends I could ever ask for. I would have paid twice the amount to get this location. Our farm is about 8 miles away and joins my son in law’s family farm. I see us eventually building there.
1 1/2 times the annual income. 15 yr loan. We built our house. The wife got all of the bids. Plumbing, drywall, HVAC, siding,etc. Her brother is an electrician, so he showed me a few tricks, Pulling wire, where to drill the holes so they were up to code, etc. but he did the main box hook-up.. A friend (that was a framing carpenter) offered to frame the house for cash if I helped. The 2 of us framed and roofed it. (Putting in the beams and floor were the worst) My boy and dad helped stone the front of the house. Have 5 acres, 4 miles from town.
The biggest obstacle was finding a bank to give us a loan, as we were the general contractor with zero experience. Applied at 12 banks before we got an O.K.
Place is worth 3x what we paid. My sweat equity is part of that value. Best we could figure is it cost $80,000 less to do it ourselves.
No regrets, but I would not be physically able to do it now. Too old.
Close to 2 years salary in 2000.
Paid it off around 2017.
I wanted to own a home, not be owned by one.
Our payments took some cash, but we weren't pinched
We enjoy living modestly, with the cash to do
what we want. I laugh at friends who earn more than i, and
fret buying a gun for a grand. Can't imagine enslaving yourself
Like that.
Comparing home price to income and affordability is
fraught with danger if you use it for decisions.
Living costs everyone the same amount of money.
But those costs are absorbed differently considering income.
A family of four might live comfortably on $60k for instance.
Modest home, older but good cars, good food but not premium.
And they aren't saving much(or paying a big mortgage).
Same family, and income, if they have to drive new cars/big
entertainment, they cant afford to buy a home.
Give them $120k, and now they can buy a$500k home. If they
live like the first example.
It's all about priorities.
We are in eastern Iowa and lots of places not in town start at about $260k. We have looked at a few in the 300k - 350k range. No other debt and wife drives a 2 year old Toyota.
My biggest worry is I grew up in a house where they never took on debt. Lived in run down places and drove junk. Don’t want to be like that. Just turned 35 and we have 5 kids ranging from age 10 to 14 months, yes we know what causes it, I’m just thrilled I found something I’m good at. Lol.
As of now we invest about 20% of income. Just freaks me out talking to the lenders and hearing the numbers they are willing to “give” you. Just trying to see how others out there look at things.
David
When we built our first house at 24yo, my uncle who I worked for told me never spend more than 20% of gross income on mortgage. Sound advice, but not possible in a lot of situations these days. Every area and personal situation is a different animal. Do what’s best for you.
I was looking to buy earlier, since the house I'm in is a schithole that the previous owner duct taped together.
Looking at existing houses, the market is insane- basic 3 bedroom going for $350-$400K.
I decided to go for new construction. Getting a 2700 sq foot house with a 3 car garage built for $250K on land that I paid cash for. Plans appraisal came back at $475K. House prices are nuts right now. Now I can't wait till June when I can move in. Gonna have natural gas for the first time ever- I'm excited.
“I want” is way better than “I owe.”
Get a bigger house than you think you need. They shrink over time.
Get a bigger house than you think you need. They shrink over time.
Disagree- get a small house than you think you need. You accumulate chit to fill whatever house you live in... smaller house, less chit.
(I'm moving from a 3400 sq foot house to a 2700 sq foot one... I have no idea what I'm gonna do with all this chit.
Ours was almost 3x my salary when we bought it 7.5 years ago. We went with a 15 year note for the better rate and because it was doable. More than I wanted to spend, but worth it to us for the location. We are in the middle of a bunch of farm land 2.5 miles down a [true] dirt road. Most people would despise living where we do and the occasional headaches of access, but we wouldn’t trade it. We get to raise the girls in an environment where they just have to “make do” sometimes, which we think will benefit them in the long run. I’ve got a range right behind the house, and neighbors are few and far between.
For us, the financial strain (compared to previous houses) doesn’t come from the mortgage, taxes, or insurance; the square footage and energy-inefficient construction methods of the time equal some hefty utility bills.
No one but you can know what’s best or most important for you. Good luck!
Ours was almost 3x my salary when we bought it 7.5 years ago. We went with a 15 year note for the better rate and because it was doable. More than I wanted to spend, but worth it to us for the location. We are in the middle of a bunch of farm land 2.5 miles down a [true] dirt road. Most people would despise living where we do and the occasional headaches of access, but we wouldn’t trade it. We get to raise the girls in an environment where they just have to “make do” sometimes, which we think will benefit them in the long run. I’ve got a range right behind the house, and neighbors are few and far between.
For us, the financial strain (compared to previous houses) doesn’t come from the mortgage, taxes, or insurance; the square footage and energy-inefficient construction methods of the time equal some hefty utility bills.
No one but you can know what’s best or most important for you. Good luck!
Another note-worthy item. We had a decent chunk of equity built up from our previous house, so we were able to make a pretty decent down payment, so I guess our loan amount was about 2x the salary.
Buy as much or as little as you want. Just have enough down to where your monthly payement isnt more than 25% of your monthly income on a 15 year fixed. I'm down to where I pay more into escrow for taxes and insurance every month than I do P&I. Hope to have it paid off in 2-3 years, I bought it 7 years ago this April.
We were approved for way more than need be.
Bought a 30 year old house for about 1.3 times our combined income.
Put some sweat equity into it, been a good deal.
Our house is about twice our annual income. I feel like this is a guy v. gal question. If it were up to me I’d be living in little more than a plumbed shack with more room to roam.
I've regretted buying every house I've owned other than the land with the cabin I currently have. First place was in the early 1990s in Oakland, paid $110k while making $30k a year. I've made a few bucks on each place I've bought (and they all seem to have cost 3-4x my annual income), but the headaches of maintenance, repairs, never-ending costs and bad neighbors outweighed any profit. The bit of land with a single room log cabin has given me more satisfaction than all of the houses combined, and out of pocket was less than $100k all in.
If only you had bought 3! How close to BART were you?
Our house in the lower mainland of bc was 160.00 when we bought it and we bought a house in Kelowna for 642.000 in 20020, then sold our house on the coast for 953.000 and then retired and moved permanently up here.
Never thought of price if it suited me, only thought of getting busy and paying them off, absolutely no regrets.
This has always been our approach. We stretched, both as to land and house, but most importantly location. We were always optimistic and confident that we could make it work. And it has - twice.
Current home is worth roughly 10x annual income, we owe about 2.5 yearly incomes on it. We'll be here at least until retirement age (20 years), then hopefully move out of the suburbs to more of a country setting with more land.
Mine have always been about 2x my income and every one netted me 100k when I sold it 5-7 years later. My last one is 1x my income. I paid it off in 4 years and now is worth 5x my annual.
The feeling of financial freedom is something you cannot explain to someone.
Just curious how you guys are invested in your houses. After the post last week about if your house was paid for it made me think.
Our home was purchased for less than 1 year annual salary. We should be paid off completely this year after living here for 3 years. Wife wants to move to the country. Houses are more expensive but I would like to have a little more room to roam for the kids. Looking at 5-10 acres mostly.
My question is guys that are mortgaged on houses how much over or under your yearly income is it. And if you are 2x-3x yearly income do you feel like it keeps you from enjoying other activities?
Not trying to pry, just don’t want to be balls deep in a house and give up some of the other outdoor activities we enjoy.
David
So what do you want a cookie
Timely thread as we just got pre-approved Monday cause why not buy a house when inventory is historically low in our locale. Current full time house was about double our yearly income when we bought it. Up north house (retirement home/vacation place) was about 2.5X.
New place we're looking to keep around 2.5 - 3X annual salary after down payment.
Current prices are, in a word, gross. $369+/- for a new build 3 bed/2 bath unfinished basement on 1/2 to 1 acre. Many of those w/ a two garage (not sure why they aren't extinct). Basically anything under $450K-ish pending within a week. Asking price is essentially the opening bid, aint no one taking the first offer at asking currently, forget about under asking Get into the $600K range they sit for a bit but still sell. Fu.ckin' crazy - would have laughed in your face if you told me todays prices 18 months ago.
The one thing on our side other than in no way needing to move or being under any time constraint is that we're willing to go further rural than those that want to see deer in the backyard but still get to target in 15 minutes (85% around here).
Mine was about 3 times my income 3 years ago. It's now appraising for twice that. I'm worried home prices will start to drop as interest rates rise. I think people by based on the monthly payment more than the total price. Low interest rates seem to drive house prices up.
Bb
First house was about 1.6x our annual wages, last house was less than 1.5x annual wages. House is paid for and is worth approx 1.75x original price. 3 houses in between were in similar purchase price/wages range. Dates from 1976 to 2002. We are both retired and not planning to move again . . . They'll have to haul me our of here on a gurney.
And NO, don't regret any of them.
X annual? Hmm about 3.2x...
Do wives' money count?
My last house was less than 1 years salary. The peace of mind having a really low payment on a 15 year note that I could pay off quick with some belt tightening if I had to was really nice. I have a good job, but it was nice to know if I lost it I could pay my note working a couple less well paying jobs if I needed to. My current house was 3x my salary. Definitely adds pressure knowing if I lose the job the house is going on the market, but then again it’s a place my wife and I have been working towards for almost 20 years when I got it. And like some others have said, right now in my locale, it’s worth more than double what I paid.
Mine was about 3 times my income 3 years ago. It's now appraising for twice that. I'm worried home prices will start to drop as interest rates rise. I think people by based on the monthly payment more than the total price. Low interest rates seem to drive house prices up.
Bb
Ironic as hell, but low interest hurts buyers.
Like you said, people buy all the payment they can afford.
And today's folk have no $ restraint.
That drives prices up until you are buying the house you would have bought
based on price, but now at your max payments.
My house (paid for) is worth about 3x my current annual income. We always lived "small" as mine was the only income in the house as my wife stayed home to home school the kids. We moved into a larger (not huge) home 10 years and paid it off with the proceeds from my father's estate.
if I'm say between 27 - 37 and buying a house, knowing what I know now, I'd probably buy a little more expensive house than what I'd be comfortable with , mainly because I know 10 years from now my salary would most likely be 20% more than what I am currently making. I also could handle most home repair issues so I wouldn't be calling up a handyman to deal with stuff. I'd happily accept driving a 15 year old car to be in a nice home.
probably opposite if I'm in my mid 40's or older. I"m looking to get into something I can pay off quickly, I don't really care about school district because my kids are out of school, so I'd be looking affordable, low maintenance because a big part of my life isn't related to living in the house anymore.
I'll be making a change soon, moving from a house that has supported me working and raising a family to me focusing on a house that has more to offer than access to an interstate and schools
Just curious how you guys are invested in your houses. After the post last week about if your house was paid for it made me think.
Our home was purchased for less than 1 year annual salary. We should be paid off completely this year after living here for 3 years. Wife wants to move to the country. Houses are more expensive but I would like to have a little more room to roam for the kids. Looking at 5-10 acres mostly.
My question is guys that are mortgaged on houses how much over or under your yearly income is it. And if you are 2x-3x yearly income do you feel like it keeps you from enjoying other activities?
Not trying to pry, just don’t want to be balls deep in a house and give up some of the other outdoor activities we enjoy.
David
So what do you want a cookie
nice
I paid 15% of my annual salary but then again I'm cool with a cabin. Leaves more money for toys👍
If not for location proximity to my daughter I’d be in the same situation.
Something clean and with running water/flush toilet is good enough for me.
That's it exactly. But to each their own I am happy so I guess that accounts for something.
if I'm say between 27 - 37 and buying a house, knowing what I know now, I'd probably buy a little more expensive house than what I'd be comfortable with , mainly because I know 10 years from now my salary would most likely be 20% more than what I am currently making. I also could handle most home repair issues so I wouldn't be calling up a handyman to deal with stuff. I'd happily accept driving a 15 year old car to be in a nice home.
probably opposite if I'm in my mid 40's or older. I"m looking to get into something I can pay off quickly, I don't really care about school district because my kids are out of school, so I'd be looking affordable, low maintenance because a big part of my life isn't related to living in the house anymore.
I'll be making a change soon, moving from a house that has supported me working and raising a family to me focusing on a house that has more to offer than access to an interstate and schools
That's a good plan but, inc it up a bit. You'll benefit from appreciation on your home (investment).
Buy as much or as little as you want. Just have enough down to where your monthly payement isnt more than 25% of your monthly income on a 15 year fixed. I'm down to where I pay more into escrow for taxes and insurance every month than I do P&I. Hope to have it paid off in 2-3 years, I bought it 7 years ago this April.
this is good advice. sounds like what dave ramsey would say. the only thing i changed was i always took a 30 with the idea that i would pay it off in 10 but if SHTF, my payment would be lower than a 15. being the only one working, i was always very cautious.
I wish I still had my first house, it was super cool.
I'd started saving for it when I was 12, I just didn't realize it at the time but it wasn't long until I figured it out.
I was buying bicycles, fixing them up and selling them, I went through dozens. I quickly graduated to motorcycles.
My parents encouraged me to buy US savings bonds with my earnings.
By the time I was 15 it was cars.
It was 1973 when I bought my first one, I'd cashed in a savings bond to buy it, I though my dad was gonna kill me.
It was a 1965 Mustang fastback, it looked like hell but it was just dirty from sitting under some trees, I paid 25 dollars for it.
I cleaned it up and sold it, you had to be 16 to get a license so I never got to drive it..illegally.
It wasn't long until my parents front yard looked like a used car lot.
They had to be muscle cars, the 60s was the era, there were a lot around in the mid 70s that sold for cheap.
By the time I was 18 it was inevitable, it'd be houses.
My bank sold me my first foreclosure, I'd never had a job but I had plenty in savings by then for a down payment.
My go to teller at the bank when I'd opened my first account there at 12 was now the banks vice president, we had a working relationship.
He set my loan up so my first payment wasn't due for 12 months.
It was a older home that sat under some big oak trees on a double lot that had a killer view looking over Tampa bay in what was then the sleepy little town of Safety Harbor.
I fixed it up and sold it in six months so I never even made the first payment.
I went through two to three houses a year after that, all of them being beat up POS.
I lived in a lot of places where only one room would be livable, if you consider room for a bed, a couple boxes of clothing and tools and room for a Coleman stove livable, a working bathroom was often a luxury.
It was 1980 before I had a home that sold in the 6 digit bracket.
After that there was no looking back, it was game on.
I'd still never had a job in the traditional sense.
Now, in 2021 the only things that have changed is the numbers.
I've paused for a few years at a time here and there, even worked a couple part time, seasonal jobs but seem to always get back into it.
I just can't pass up a deal where there is easy money to be made.
I guess the moral of my story is if you are willing to work hard and forgo some comfort and luxury, there isn't any reason you can't flip a few houses until you own one outright inside of 3 to 5 years.
I know the supposedly American Dream is the job, wife, house, family scenario.
It can also be viewed as a rut the bulk of people willingly trap themselves in so they can spend endless years working their way out of it.
A couple months a year off to hunt a few different states and a few weeks here and there in the summer for fishing, camping and traveling has been rather sweet, I suppose it's not everyone's cup of tea.
Bought it after 9/11 for about 2X annual. Refinanced to a 15 year and will pay it off a few years early. Currently the mortgage is only about 12% of our monthly net income. It's never stopped us from doing what we want.
At the time, the banks were willing to give us a lot more, but I didn't want to be handcuffed to a huge mortgage.
My house was 45K 30 years ago. My salary then was 35K. I wish my lot was bigger but now that I am older not so much. I could have afforded nicer but am glad that I have never felt the need to show off. I am happy with my paid off belongings. I can do,eat,and drink what I want within reason.
Properties are investments. It’s no different than sinking a lot or a little into a business or stocks. Properties are not toys.
If you’re predictions and efforts are sound, you’ll get a nice return. If they’re off, you won’t.
The whole comparison to your current annual salary is pretty short sighted. Some Dave Ramsey schit.
Built mine 25 years ago, 2400 living area, all brick. I formed, installed plumbing, got slab ready to pore, framed, wired, installed AC, everything except finish concrete, insulation, lay brick, and hang Sheetrock. I have 64,000 in it. I wish I had made it a little bigger, but only two of us now.
Someone was told me 25-28% of your budget should be housing costs,inclusing utilities. I don't know where that comes from but seems high. Depends where you are in your career, I guess.
we paid our first house off...and I was fine with it, but the area was getting overrun if you catch my drift and it was time to move. Sucks to have a house payment again but we were able to put a big chunk down and payments are less that most car payments I hear about these days. Taxes are also half what they were from the county we moved from so that also helps. Utilities about half also. Its real close to the kids school so I guess we are stuck here until they get out of highschool. We have some land about 30 minutes away where we hunt and I'd like to build something on it at some point. Just wasnt convenient for us with kids now.
The only thing I regret about the new house is its big...lot of upkeep. Also takes over an hour on the ztr to mow the yard and thats going all out.
Get a bigger house than you think you need. They shrink over time.
Disagree- get a small house than you think you need. You accumulate chit to fill whatever house you live in... smaller house, less chit.
(I'm moving from a 3400 sq foot house to a 2700 sq foot one... I have no idea what I'm gonna do with all this chit.
^^^^^^^^^^
That's right!
I've down sized twice. Its hard to part with some stuff but as I get older I realize I can't swap transmissions or engines. The place we're in now is very small but we got it cheap and had money to upgrade the things that matter like bathrooms and kitchen. It was all paid for up front.
My wife is soon gonna be working from home full time, that might put us in a pinch for space again but we'll make it work.
trying to build now but building prices per sq ft, if you're lucky enough to find a builder, are ridiculous.Getting quotes of 235 to 255 a sq ft to build now
This parcel was $135,000 a year ago and more than doubled in price, Any house under 800 k is gone in under an hour or there is a bidding war.
https://www.zillow.com/homedetails/11941-N-Avondale-Loop-Hayden-ID-83835/204488393_zpid/
I’d depends -
1. do you or your wife like cleaning .... if not don’t buy a bigger house.
2. Does your wife buy so much crap (Hoarder) until you are pilling stuff on top of each other ... smaller is better.
3. Big open spaces = more comfort inside, but high heating & Air Conditioning bills
We have up sized and down sized a couple times, I like the bigger open spaces but things can bite you in the arse.
Indeed. We get letters from realtors here (Texas) wanting to purchase our two properties outside Sandpoint. A few recent full cash well over asking price sales nearby.
Indeed. We get letters from realtors here (Texas) wanting to purchase our two properties outside Sandpoint. A few recent full cash well over asking price sales nearby.
Just put a bid on 5 acres s of Sandpoint last weekend just for an investment, Unimproved Land is going now for 50k to 70 k an acre now if you can find it. Supposedly the fastest growing Realestate imarket n the US.
Properties are investments. It’s no different than sinking a lot or a little into a business or stocks. Properties are not toys.
If you’re predictions and efforts are sound, you’ll get a nice return. If they’re off, you won’t.
The whole comparison to your current annual salary is pretty short sighted. Some Dave Ramsey schit.
Yep.
It all comes down to what you enjoy... many really do not know.
I enjoy land, elbow room and doing my own thing in my own time and place.
Some prefer a penthouse in NYC with 30 great restaurants within 3 city blocks.
Some prefer a long commute to work to clear their mind... some do not.
Just like a well paying job that you hate... many stick with it because of the vacations and future it provides... but some live in a wilderness camp in a converted shipping container.
My first home was a 48' Ketch in Key Largo. Pros and cons.
My plan has always been to buy a distressed house in a great neighborhood... fix it up and exit to the next.
My last purchase was a 340 acre proposed 20-30 acre "farmette" WV subdivision that fell on it's face. NOT for most, but it gives me elbow room... and enjoyment.
Good luck.
Properties are investments. It’s no different than sinking a lot or a little into a business or stocks. Properties are not toys.
If you’re predictions and efforts are sound, you’ll get a nice return. If they’re off, you won’t.
The whole comparison to your current annual salary is pretty short sighted. Some Dave Ramsey schit.
Yep.
Exactly...
Everything is either a "Consumable" or a "Commodity".
When a "Consumable" (car or shelter) can become a "Commodity"... it is a double win.
Homes typically fit this definition... so do 12 valve Cummins trucks... and 1985 Toyotas.
Properties are investments. It’s no different than sinking a lot or a little into a business or stocks. Properties are not toys.
If you’re predictions and efforts are sound, you’ll get a nice return. If they’re off, you won’t.
The whole comparison to your current annual salary is pretty short sighted. Some Dave Ramsey schit.
The salary thing is hanging your hat on a moving target. Better to hang that hat where you will land. Finance the just in case accounts, Insurance separately.
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
If he was able to hold on to it it would have doubled in value
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
If he was able to hold on to it it would have doubled in value
+3x. Literally, three times the purchase price.
I'm in too deeply according to Mr. Ramsey
2400 Sqft with full basement built for 3 of us.
House was built in 1999 for $120K on 100 acres at another $150K
It now sits on 72 acres and would sell in the $750K range[mostly due to land & location].
But my kid grew up hunting & roaming safely on OUR land. Now as a grown adult he lives for hunting.
These days our mortgage floats back and forth depending on what properties we own or don't own anymore. We always have at least one income producing property and are also always looking.
Kind of waiting for this current bubble to burst or at least settle down before making any moves.
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
If he was able to hold on to it it would have doubled in value
+3x. Literally, three times the purchase price.
probably. Like any investment have to ride the highs and lows for the long term
About 4x my salary and don't regret it for a second. A mile of city owned woods next door, critters in the back yard, quiet cul-de-sac, good neighbors, outskirts but with city amenities, in the safest city in America according to US News and World Report. What's not to like? Paid cash because Sweetness paid for half. We aren't going to lose a dime on this place. Location, location, location.
I wish I had enough liquidity to buy a second home in 2008
There were some serious bargains to be had from people that were upside down, I knew of two in a neighborhood I couldn't normally afford to buy into that were firesale prices. One in particular the guy was asking $299K. Today its a $600K home.
I'm in a better position today. Who knows, maybe Biden tanks the worlds economy and I can jump on something that catches my eye.
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
If he was able to hold on to it it would have doubled in value
+3x. Literally, three times the purchase price.
probably. Like any investment have to ride the highs and lows for the long term
My daughter sent me her address of her new home they bought in the mountains. I used Bing maps to see where it was. Bing does a real estate history on the address. The home sold for $2,8M.
Certain geographic ares are only going to grow in the US in the future, while others areas die and become high crime and unemployment ghettos and people flee urban areas especially on the east and west coasts and the mid west. Texas, AZ, ID, MT, WY, UT, FL, NC, SC are only going to get more expensive as new people flood in from socialist schitholes. Covid really accelerated the immigration
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
If he was able to hold on to it it would have doubled in value
+3x. Literally, three times the purchase price.
probably. Like any investment have to ride the highs and lows for the long term
My daughter sent me her address of her new home they bought in the mountains. I used Bing maps to see where it was. Bing does a real estate history on the address. The home sold for $2,8M.
Our house is a pretty standard 4br/2ba, 2100SF. I bought it 9 years ago after my divorce. I paid much less than I was approved for. Which bothered the mortgage companies. But piss on them. I paid $170k. Home values for this style of home in our neighborhood have literally doubled what I paid and they sell fast! I live across from a school. There is some swamp land behind it.
Someone bought it, filled it and built about 15, 3500sf + houses on it. They range in price from $685K-$900K. We toured some when they had a parade of homes last year. The quality was no better than anything else, maybe even worse, and they're built in a swamp. Keep building them as far as I'm concerned. The value of ours will keep going up and we'll buy our next one for cash when we get out of this tax hell.
You going fishing this weekend or do you own your own home. Something to consider. Edk
I keep hearing about people getting 'pre-approved' for mortgage loans. If they borrowed that much, they'd never pay it off and would be tied to a high mortgage forever. NEVER borrow anywhere close to your pre-approved amount. It's just plain stupid.
In hindsight, I wish I had bought a bunch nicer house on more land with better neighbors. I had no idea I'd still be living in this house 24 years later.
No regrets.
If it's paid off the day you retire, and you are able to save enough to retire when you want to, fuuck what anyone else thinks.
No regrets.
If it's paid off the day you retire, and you are able to save enough to retire when you want to, fuuck what anyone else thinks.
Yep.
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
If he was able to hold on to it it would have doubled in value
Basically, what I was going to say !
Only if he sold it.
I had a friend who let a realtor talk him into dumping a huge amount of money to upscale and buy a huge house in Coloraodo in 1999, and his new job, and the house it market imploded in 2007 - he lost his a huge amount of his life’s savings.
If you don’t know realistate make sure you do your due diligence.
That being said - loan rates are pretty low right now.
If he was able to hold on to it it would have doubled in value
Basically, what I was going to say !
Only if he sold it.
When I go to Canada Im always shocked how much Realestate costs up there. Seems about 25 to 30 per cent higher than the US. This is BC, Alberta and Saskatchewan . How are they in Ontario?
I keep hearing about people getting 'pre-approved' for mortgage loans. If they borrowed that much, they'd never pay it off and would be tied to a high mortgage forever. NEVER borrow anywhere close to your pre-approved amount. It's just plain stupid.
You gotta be preapproved these day, they wont take an offer without a preapproval.
The loan process is way more involved than it was 15 years ago. Those easy approvals for crazy money dont happen anymore. I bought my first house in 2006, absolute worst time. I was making squat and all I took was a w2 and they preapproved me for 400k, I was maybe making 30k at the time. I knew better and only took out a loan for 135k...but I'm sure folks took all the money offered...thus the housing crash a year or so later.
"If he was able to hold on to it it would have doubled in value."
Not always the case and depends on the location. Wife's friend's daughter has a forth floor walk up with a leaky roof in NYC and they thought they got a bargain at 1.5 mil. Favre owned the place on the end of the cul-de-sac and it was on the market for 1.4 mil. It sold last year for $605,000. The market here in the Midwest just isn't as vibrant as in other places. We've had management guys transferred from the coast and they can't even find an equivalent priced place.
Right up the street from me....supposedly the largest land owner in the state of Ga, estimated monthly payment...70k
https://www.zillow.com/homedetails/5327-Us-Highway-41-S-Macon-GA-31210/250625826_zpid/
I don’t know how young people are going to progress in this new America. When houses start at $350k and you have to be prepared to bid over asking in many cases, I know the wife and I couldn’t have afforded something like that when we were younger. In my area $500,000 is a median house price, that’s insane!
34 years ago we built a new house, 2600 sq. ft. 4 br, 2 baths, 2 half baths in a subdivision with a great view of the water. With the down payment from profits from our other house I remember is was about 1 1/2 times our income. Back then the interest rate was 11.5% and through connections I built the house for 74K on a 14K lot.
Over the years the interest rate went down and the value went up, we put all three sons through 4 years of college by refinancing the house but keeping our same mortgage , just getting a better rate. Paid our 15 year mortgage off in 18 years, that was about 15 years ago. Our 88K house is now valued at over 400K. Our kids all bought houses before things started to go crazy around here, #3 son had a house built 11 year ago on a nice lot for 165K, in a sub made up of very similar size homes. His neighbors are selling there homes now for high 300K, he's sitting very well with a 2 5/8 % mortgage.
I design homes for 4 different builders in my area, range from 350K to over a Mill. These are usually young professionals and they usually go 2.5-3 X their family income, their monthly payment and taxes just blow me out of the water, but they survive.
For young couples I tell them to build a house they can afford 5 years down the road, the ones that build based on their current income tell me they should have listened to me, as the now feel they missed getting the house they really wanted.
One thing where I have swam against the current on homes.
It is not the biggest investment you will ever make.
It's the biggest expense. (Keep cars out of this)
People lie about the price of their homes.
They like to say, I paid x, and it's worth XXXX now.
Bullshit.
Principal + interest, you paid 2 or three times sale price.
You only gained 1/3, not 4x.
And you paid maintenance, taxes, and insurance.
Probably improvements too.
And your house ain't word a dam nickel until you
sell it.
Then, you are homeless until you buy another.
At current prices.
Or rent, at current rates.
Yes, buying is normally the best move.
But don't be fooled into thinking it's gonna make you rich.
Unless, you buy junk, rehab while living in it, and sell.
Working your way up.
Even then, consider labor and expenses.
You will earn every cent you gain.
I keep hearing about people getting 'pre-approved' for mortgage loans. If they borrowed that much, they'd never pay it off and would be tied to a high mortgage forever. NEVER borrow anywhere close to your pre-approved amount. It's just plain stupid.
You gotta be preapproved these day, they wont take an offer without a preapproval.
This - and around here banks are about 4-6 weeks out on getting you in due to everyone and their brother doing refi's and looking to take advantage of low interest rates. Houses sell in 24 hours with multiple offers over asking - if you look at a house before having your financing in order realtor/seller are gonna tell you go piss up a rope.
Only house I regretted buying was the one in Colorado Springs. It was 4500 sq feet, 4 bedrooms, 4 baths, and a 4 car garage. Just to much for 2 people. Taught me a lesson though. When we moved to TN we went to 2200, 3 bed, 2 bath with a detached 1,000 sq ft workshop. For the most part we only use half the inside of the house. We have collected two out door sheds, each 8x16. Hard not to when the local Mennonites sold and delivered them for $1600 each.
The older we get the more space we need outside the house, not inside.
Hard to go wrong on quality property. Our present home was about 2x my annual income, in a snob knob development, and we were debt free in 3 years. Value now is about 3 times what we paid.
If one expects to stay for a considerable time, should be a good investment unless ones local economy crashes.
On Rock Chuck's comment:
I keep hearing about people getting 'pre-approved' for mortgage loans
Yes. When we were house hunting the bank handed me a slip with a number they were willing to preapprove. They would have owned me for the rest of my life, but I would have been in the finest home in our community. That was before the housing crash, however, and I don't know if they'll go that far today.
When I bought mine it was 1.5X my income. Paid it off in 1.5 years. Don't like to be beholding to anyone. For anything.
One thing where I have swam against the current on homes.
It is not the biggest investment you will ever make.
It's the biggest expense. (Keep cars out of this)
People lie about the price of their homes.
They like to say, I paid x, and it's worth XXXX now.
Bullshit.
Principal + interest, you paid 2 or three times sale price.
You only gained 1/3, not 4x.
And you paid maintenance, taxes, and insurance.
Probably improvements too.
And your house ain't word a dam nickel until you
sell it.
Then, you are homeless until you buy another.
At current prices.
Or rent, at current rates.
Yes, buying is normally the best move.
But don't be fooled into thinking it's gonna make you rich.
Unless, you buy junk, rehab while living in it, and sell.
Working your way up.
Even then, consider labor and expenses.
You will earn every cent you gain.
I have a friend that had this same philosophy. Homes are a liability not an asset he used to always say. They don't bring in any money and there's always another expense. When I sold my residence that was almost paid off 3.5 years ago I had around $250,000 in equity that went into my bank account when the deal was done.
I moved into one of my own rentals and started building my dream home. Not a dream home by many standards but for a guy who grew up in a singlewide it is a dream home. Said friend told me I should just invest the money and then rent. He said rent was a fixed cost and I didn't have to worry about repairs or other things. He made a bit of sense almost but I told him I was worried that inflation was coming and I wanted money in a home to tie me to the market. I said if homes get really expensive the only way I'll be able to afford one is if I was already in one and rode the market up.
I built for $350,000 which was a bit more than I had in cash but I paid the rest off quickly. Now the home is appraising close to $700,000. If I want to move or buy a new house now I've got a good size chunk of cash to put towards it if I sale the one I'm in. Meanwhile my friend continues to rent and told me the other day that if the market stays this high he will probably never be able to buy a home.
First time home buyers have it rough in this market. Those of us that have been building equity for years can role that equity into something new and often still afford to buy in this market. I'm glad I'm not trying to buy my first home now. I'd be worried to spend $600k plus because there is room for lots of downside if things get bad. For years my home and house payments and expenses felt like pure liabilities. Now that I own it and in this market it feels a lot like an appreciating asset.
Bb
Bought my first house in 1977 for $80,000. Upgraded to a bigger house with a bigger mortgage in 1984. Paid off the mortgage in 1993. No debt since then.
Bought two houses since then. Both were fixer-uppers. Paid cash and remodeled them using earned income, then sold for a profit.
All major purchases are done with cash. No house payments. No car payment. Pay off the credit card every month. Mostly use the credit card because it's convenient and to get air miles.
My son is 45 and was paying double house payments for about ten years. Paid off his mortgage last year.
Daughter is stationed out in San Antonio and says many of her coworkers are buying homes with a 50 year mortgage! Insane!!
Says their plan is to rent home out when they get stationed elsewhere.
Bought my first house in 1977 for $80,000. Upgraded to a bigger house with a bigger mortgage in 1984. Paid off the mortgage in 1993. No debt since then.
Bought two houses since then. Both were fixer-uppers. Paid cash and remodeled them using earned income, then sold for a profit.
All major purchases are done with cash. No house payments. No car payment. Pay off the credit card every month. Mostly use the credit card because it's convenient and to get air miles.
My son is 45 and was paying double house payments for about ten years. Paid off his mortgage last year.
Anarchy like that is going to get you cancelled! You must be in debit to be free. The interest paid is the measure of your freedom.
My grandfather died in 1965. His house was worth $8.5k, per when we sold it.
That house is now worth $450k in 2021 per Zillow
2021- 1965 = 56 years
56th root of [$450/$8.5] = 1.073 -> = 7.3% return compounded annually over 56 years
My grandfather built that house with cash, so that is realistic.
But if the had a 20% down 3% interest 30 year loan, his return would have been more like 20%.
Neighbor offered me way to much money for my house a few months ago. About 25% more than a reasonable market could bear. He swore he was dead serious. The wife and I laughed about it but didn't consider it very long because the replacement cost for our home would probably be 25% more than he offered.
Waiting for this real estate bubble to burst.
I’d depends -
1. do you or your wife like cleaning .... if not don’t buy a bigger house.
2. Does your wife buy so much crap (Hoarder) until you are pilling stuff on top of each other ... smaller is better.
3. Big open spaces = more comfort inside, but high heating & Air Conditioning bills
We have up sized and down sized a couple times, I like the bigger open spaces but things can bite you in the arse.
Spotshooter, good points but it depends on where you live regarding heating and cooling costs. My dad and step mom retired and moved to Ecuador several years ago. They built a 5700 square foot house, all on one level and have no heating or cooling costs since the house is 100 yards south of the equator and at 8900 feet elevation.