Author Topic: Deciding on a primary house purchase budget  (Read 3030 times)

Drit99

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Deciding on a primary house purchase budget
« on: December 23, 2015, 06:53:24 AM »
I'm torn and looking for input.

I'll start by saying I've owned 5 houses in 3 states at varying price points. All had pros and cons,
All were eventually offloaded (sold)  at a loss after renting them (also at a loss). I thought I'd be a committed renter after that, but now that my kids are getting older, constant moving is costly and disruptive. So, here I am.. Looking to buy and settle for at least 10 years.

The hard part is deciding how much to spend. I live in a suburb of Orlando, the entire county is generally safe with top rated schools. You'd have to drive nearly an hour to find a "bad" neighborhood.
Seems like that would make my decision easy- go cheap! Right?
Buuuuut.. I'm afraid I'm being a snob. I live in an upscale rental currently. House prices
Here are 400k+. I've only ever lived in working class areas before.  This neighborhood- is amazingly quiet. Well kept yards. Retired people. Curteous drivers who watch out for kids on bikes. People who bring you misdirected mail. Just.. Nice.

I never really experienced this "other" side, but now that I have, I don't know if it's worth putting up with the old headaches to save money. In my less expensive houses.. 8+ cars belonging to one house piled up on either side of my street. Drunk neighbors playing Cornhole loudly at all hours.. Teenagers routinely denting vehicles with rowdy pickup games in the street.. Adult children living at home blowing through stop signs. Latchkey kids at the bus stop with phones trying to show graphic content to my gradeschoolers..

What do you guys think?

$ wise, We have saved up 850k and have no debt. Combined we bring in about 160k a year, but are not ready to retire as we have a desire to travel extensively as empty nesters and send our kids to college without loans. I currently spend $2600 in rent, which is the equivalent of a 450k mortgage payment. The cheapest house I could possibly get in this are is 375k, which is still going to cost me about $2200. I was looking at houses in the 250k-300k range, which would only be about $1800  and allow us to Reach our "magic number" in 6 years, instead of 12... Is it worth it?

matchewed

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Re: Deciding on a primary house purchase budget
« Reply #1 on: December 23, 2015, 06:59:10 AM »
Just find the lowest cost housing that suits your needs. Define your needs first then match up the houses that fit that. Don't put the cart before the horse by trying to figure out the cash first.

Drit99

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Re: Deciding on a primary house purchase budget
« Reply #2 on: December 23, 2015, 07:06:34 AM »
-.- but is hating your neighbors worth saving money? That's the question.

matchewed

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Re: Deciding on a primary house purchase budget
« Reply #3 on: December 23, 2015, 07:13:43 AM »
-.- but is hating your neighbors worth saving money? That's the question.

Why is hate necessary?

Assuming you'll hate your neighbors seems a silly thing to do. That is not about needs or values. You're just coming up with some random thing that you can't control and is in fact independent of your actual neighborhood (I'm sure you know assholes can be found anywhere).

Again, define your needs. Then find a house that fits that. If you're so scared of assholes then before signing any papers walk around the neighborhood and interview the neighbors (in a subtle not interview type way; strike up a conversation).

Another Reader

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Re: Deciding on a primary house purchase budget
« Reply #4 on: December 23, 2015, 07:35:37 AM »
Hmmmm....bought and sold five houses in marginal areas at a loss after renting them out at a loss....  that might be your answer right there.  Although folks like Justin at Root of Good make a go of it in less than great neighborhoods, it's not a good way of investing in a primary residence for the long term.  In your shoes, if you value the type of neighborhood where you live now, I would make a conscious decision to place that at the top of the priority list.  Then I would shop for the least expensive house that meets your other minimum requirements in those neighborhoods.  Maybe buy a fixer, accept a smaller house, or wait to pounce on a bargain, but buy where you (and other high income folks that are willing to pay up for amenities) want to live.

pbkmaine

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Re: Deciding on a primary house purchase budget
« Reply #5 on: December 23, 2015, 07:44:40 AM »
I say go for it. Quality of life is important. Just do as the others have said here. Look for the best deal you can get in an excellent neighborhood.


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Drit99

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Re: Deciding on a primary house purchase budget
« Reply #6 on: December 23, 2015, 08:04:54 AM »
You're right- as soon as I typed my first reply .. It was a "duh" moment. Quality of life does matter..especially once I factor in 10 years of daily dealings with those in my immediate vicinity...

zephyr911

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Re: Deciding on a primary house purchase budget
« Reply #7 on: December 23, 2015, 09:02:20 AM »
Wow... your options must be a lot different than mine.

A year ago, we moved from a $180K townhome in a $4-500K median neighborhood (IOW, we were the "poor" ones) to a mostly blue-collar street where $122K got us by far one of the nicest homes. People here are still gainfully employed, majority owner-occupants who maintain their properties well. They look out for each other just as much as the executive types - maybe more. I like my neighbors better, can walk to 10x more useful services, feel every bit as safe, and am no longer subjected to petty bullshit and HOA complaints.

I don't advocate living in a place you hate just to save money, because QOL in the here and now is absolutely as important as tomorrow, but it seems like there should be a happy medium somewhere.

Drit99

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Re: Deciding on a primary house purchase budget
« Reply #8 on: December 23, 2015, 10:00:25 AM »
There is no explaining it better without being jumped on.. But essentially. You get what you pay for in my particular area. If I pick somewhere super affordable, i won't get shot- but my car will be broken into And having my mail stolen ..  First world problems, I know. I just realized the kind of stuff I dealt with before wasn't worth the trade off. In my "cheap" hood, dual working parents meant unsupervised packs of children roaming/getting into trouble and general level of rowdy I'm not interested in reliving.  It's also worth mentioning it that there is a definite  political  shift in the higher income bracket in my area, and somehow I had failed to factor when first formulating my post.  Do I really want my highschooler surrounded by Peers who think college is optional? The same ones who pick "southern rights" as a debate topic in English? Eeeeeh. Probably not.

zephyr911

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Re: Deciding on a primary house purchase budget
« Reply #9 on: December 25, 2015, 04:31:24 PM »
Gah! Yeah, my realm has its share of that. At least I don't have to deal with your home prices!
Buying a home is a business deal, but it's also intensely personal. Your "needs" list is clearly an expensive one, but it's yours. So... only you can decide if it's worth the cost to own something that qualifies.
In your shoes, I'd be looking for the nearest condo. If you wanna retire early and travel, downsizing right now is a permanent and potentially huge accelerator. And the easiest way to make quality living space affordable is to need less of it.

BPA

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Re: Deciding on a primary house purchase budget
« Reply #10 on: December 25, 2015, 06:43:51 PM »
It seems like your mind was made up in your first post.  Good luck.

cawiau

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Re: Deciding on a primary house purchase budget
« Reply #11 on: December 25, 2015, 07:33:22 PM »
All depends on how important is your overall quality of life to you... And I agree, you've answered your own question in the OP


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Bearded Man

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Re: Deciding on a primary house purchase budget
« Reply #12 on: December 29, 2015, 02:21:25 PM »
I moved three times in three different houses. Really what I've found is that the pink cloud syndrome will follow. People playing pickup football in the street? Happened in the C+/B- neighborhood I lived in and happens now at my ritzy subdivision.

Loud music? Check. HOA is USELESS. They don't do anything. In fact I wished I had read the reviews before I bought. One star ratings consistently, almost entirely.

Pretty much the same issues as old neighborhood. Less seedy or section 8 neighbors, but I have a ton of renter neighbors that are douches and a couple of owners that are douches as well. In reality, there are aholes everywhere. In fact on another forum I saw a thread where several people where in the same boat as me, no matter how much you vet your situation, even if you rent a few houses down for years then buy, only when you move in will you see the daily crazy. I've seen this consistent theme on a number of forums and from A LOT of people. I'm at the point where my GF and I decided we are not happy in the ritzy community and were happier in the old neighborhood with ghetto neighbors. Heck in some ways the neighborhood has improved. Two of the douches moved out.