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Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: justconfusdme on March 10, 2016, 06:43:05 PM

Title: How much to spend
Post by: justconfusdme on March 10, 2016, 06:43:05 PM
I've been looking for a new house for a couple months and nothing's come on the market. Everything is going pretty quickly because of that too (which is also scary because I feel like it's forcing the price up). I decided to go ahead and list mine and got two offers the day it was listed. I'm happy with the offer, but now I don't know where to live. I want to be within biking distance to work and want a yard for my dog to run around in and for a garden, but I'm not picky otherwise. I'm looking in the Richmond, VA area. I love the style and price of the houses in the areas that are not so great, but I keep hearing to stay away from those areas. The ones in the better areas are fairly significantly more expensive. The contract on my current house is allowing me to rent it back until 6/20, so I do have 6-8 weeks to play with to make sure I can close on time.

I'm half tempted to buy a cheap house in a crappier area of town so that I can be mortgage free quickly. The resale value of doing something like this isn't really there though. Am I better off in spending (a lot) more in a better area for safety and investment reasons? I'm not looking for my forever house, so this needs to make sense 5 years from now too when I'm wanting something different/ready for the more dream hosue. I'm almost 29 and have been in my current home for 3.5 years.
Title: Re: How much to spend
Post by: GrowingTheGreen on March 11, 2016, 07:51:53 AM
This is a very personal question that you must decide for yourself :)

One thing though: Don't think of your house as an investment. It isn't. The one way to change this is either by buying a SFR and renting out the extra rooms or by buying a duplex and renting out the other side. You may have luck doing this in the nicer side of town and could possibly reduce your mortgage obligation to almost nothing depending on what your rental market looks like.
Title: Re: How much to spend
Post by: Thinkum on March 11, 2016, 08:58:49 AM
With a timeline of 5 years of less, why wouldn't you rent instead of buy? Your primary residence should never be looked upon as an investment because it is not. You have property taxes, insurance, and maintenance to pay for that you wouldn't have to if you were renting. A house would be an investment if you were renting it out since you can write off so much of your costs including depreciation of the building. Also, by renting, you can usually pay less to live in nicer areas.
Title: Re: How much to spend
Post by: freeat57 on March 11, 2016, 10:26:03 AM
I assume that you currently live in Richmond and know the area?  Sometimes in an urban area, a few blocks can make a huge difference in crime/safety and property values.  In a couple of my moves to new cities, I have rented for 6 months or a year to get to know the different neighborhoods better.  By doing that, I have found great places that the real estate agents never guide people to. 

Trulia had crime maps that will show you a heat map of crime in an area along with a list of reported crimes.
Title: Re: How much to spend
Post by: Thinkum on March 11, 2016, 12:27:55 PM
Forgot to also mention the cost of buying and selling a home, which is pretty expensive.