Author Topic: Buying a house as apartments don't have the amenities. Looking to keep long term  (Read 436 times)

zoochadookdook

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Has anyone purchased a residence to live in primarily with the intent to keep long term regardless?

I took a job 9 months ago. Moved 5 months ago. Finally sold my house back home and had decent equity (85k or so net). Didn't hate home ownership, gave me great experience budgeting etc etc. Only regret is the 10k realtor fees (i've FSBO a neighbors house before and knew the process but couldn't be accross the country to do all that).

That being said-there's a few factors that have me looking at buying

1) The ammenties. A washer dryer/garage/floor plan with over 600 sq feet seems hard pressed to find under 950 or so. Even then I haven't found a "good enough" temporary spot.

2) Mortgages. They're low. Really low. Saving on interests now vs speculating and waiting a year or so to buy?

3) I like the idea of keeping a rental long term. Always loved business/multiple income streams (churning cc's to pay off student loans, ran a LLC to pay through college and my first home, etc etc). This city is rapidly expanding and has a strong military base and college campus presence. This doesn't seem like a hard "loss" based on those metrics.

The pros of an apartment

1) no prop taxes. The biggest differentiator (aside from repairs/interest-which is a moot point low apr and long term investing the diff). It's around 4-5500 average a year. Plus whatever insurance is.

2) Flexibility. I keep telling myself that's value. I don't know the entire area. Then again I only go to work and my gym. So being 20 minutes away from either is fine by me. The urban sprawl is pretty large. Who knows how valuable that is.

3) Cheaper. No down payment. No prop taxes. trade off for space.


I'm wondering if I'm missing anything. Would I be crazy for attempting to buy in the next month or 2 vs rent for the next 9-12 in my current scenario?

Thanks

ysette9

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I said it on your other thread on this same subject: I really think it is wise to give yourself time to make sure you are settled in your job, you like the area, and your job likes you before committing to something as big as buying real estate.

If you go into instead as wanting to do a real estate investment property and look at it from that perspective (via all the rules you’d find on a place like Bigger Pockets; ask someone who knows about this because i sure don’t) then sure. My fear is that you would be less rigorous on that front and instead be drawn to something that will reduce your commute and make your current situation more pleasant and not necessarily prioritize what is best financially for you long term.

RE has high transaction costs and with leverage it is easy to get yourself into a big mess if you don’t choose thoughtfully. I’ve bought real estate three times and two times were definitely a mistake. Maybe this is the right choice for you but through my life’s mistakes I’ve learned that it really is wise to be slow and methodical about this particular decision.

Malcat

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^

I could not agree more.
There are huge advantages to renting in your particular scenario, and you've just made an enormous life change under intense circumstances.

Take some time and enjoy the process of getting to know your new life before locking anything in.

Cb1234567

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What do you mean by “intent to keep long term regardless?”? I’d say we ONLY purchase a residence with the intention to live in it long term. A rental/investment property is a whole other beast. Which are you after? [an accidental rental, where you own, live in it, move out, and then rent it, is just that - an accident]

I agree with ysette9. For me, it’s worked well to have a clear path before flailing or falling into albatross assets, like a house. This is a far cry from “churning credit cards” and finagling some kind of LLC to do school and a house purchase (???) - don’t tell me, I don’t want to know. This sounds like my FIl, who makes everything a thousand times more complicated than it has to be...thinking he’s doing something sophisticated. With love, I’ll say this man can analyze the “value” of something 92 different ways, recalculating interest rates and robbing Peter to pay Paul. If he’d just SAVED his money instead of spending all his energy trying to work the system, he’d be a wealthy man. This is a guy who made hundreds of thousands a year - base salary- and then gets a loan for a lawnmower in retirement. He refi’ed his house to roll an auto loan into the mortgage, “saving” $1 on the payment. He is super-smart, but not about finances. K.I.S.S Don’t be this way!

The biggest advantages of renting are: you control your costs, and you can easily walk away at the end of a lease. You write a check for $X amount every month. The landlord absorbs costs of vacancy, the new hvac that blew up, the cute kitchen that became dated, special assessment from the city, lawn care, failing appliances, pee from the cat that wasn’t supposed to be there (ewe), property management costs, etc.

If you’re putting down roots, it’s fine to buy. Property is an illiquid asset - It costs a lot to keep (1-2% of price on maintenance on *average), it costs a lot to sell (realtor commission + closing costs etc.). *You can have big cost outlays...roof, hvac, etc.

A few thoughts:
1. Military base usually means turnover in the housing market. This can depress prices and is more competition - good when you buy, bad when you sell.
2. Yes, interest rates are low and should stay historically low for the time being...so no rush there.
3. One big repair, one big market drop - due to virus, oil, the Fed sneezes - and your interest rate is irrelevant. The question becomes do you have the funds on hand to do the repair?
3a. Similarly, can you absorb a real estate market drop? If you’re sitting tight, it won’t matter except on paper.
4. Again, a rental property does not always equal what suits as a personal residence...because what renters are going to do to it is different.
5. Amenities is not a great reason to buy, imho. Look for small, privately owned rentals and be patient.

The tone in your post sounds very undirected to me, meaning it comes across as you feel like you should be doing something...with a vague sense of maybe to own a home again, but maybe it can be a rental later if you change your mind...and the amenities don’t quite suit. In that scenario, I would absolutely keep renting. Rent until you KNOW what your aiming at.

If you want an investment vehicle, the stock market seems to be discounted of late ;-)