Author Topic: Potential first time home buyers here. What do you consider when purchasing?  (Read 4536 times)

Onomatopoeia

  • 5 O'Clock Shadow
  • *
  • Posts: 17
  • Location: Boston, MA
Hello, potential first time buyers here! We are a couple currently renting a tiny, expensive apartment in Boston. We have begun looking at real estate in the area and found an affordable potentially "up and coming" area (East Boston for those familiar with the area). We ended up finding a place we absolutely love and if we want a chance at it we will probably have to act fast. It's an 1100 square foot free standing 2 bedroom 1 bath home build in 1900. It has a small yard, with a garden and shed. It's a .7 mile walk to the T and list price is 290k. I love the layout/uniqueness of the house and that the kitchen is older. It seems like a place with room for improvement in a good way.

Anyway, what factors do you normally consider when purchasing? We have the 20% down payment saved and our combined income is >200k. We have no debt. We would likely take a 15 year mortgage but plan to pay it off as soon as possible. Once it's paid off we like the idea of buying a second property and renting one of them out. How can you figure out whether that is a winning proposition?

Also, is there anything special to take into consideration with buying a home built in 1900? Nothing was falling down but I did notice that the floors weren't perfectly level. I know that part of buying a home is getting a home inspection, but are there specific things we should look out for that would be missed in an inspection?
« Last Edit: September 28, 2014, 03:17:37 PM by Onomatopoeia »

monarda

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 60
First, congrats on your income, lack of debt, saved-up down payment. You are more 'ready' for being a first-time homeowner than many.

Are you likely to keep your current jobs in Boston for quite a while? Or if not, find another job in the Boston area?
Check out the New York Times Rent vs Buy calculator.

Your home inspector will likely explain this all to you, but lead water pipes and knob-and-tube wiring are pretty much a given for a 1900 house. Those are relatively expensive to upgrade, and you'll want to upgrade if it hasn't been updated by previous owners (our city required lead pipe removal 10 years ago).  Insulation will probably leave something to be desired. Look up the past utility bills and consider an energy audit.

Good luck!

Many knowledgeable folks around here if you have other questions.

hdatontodo

  • Bristles
  • ***
  • Posts: 310
  • Location: Balto Co, MD
My relatives are from East Boston ca. 1900. Close to the airport noise?

Onomatopoeia

  • 5 O'Clock Shadow
  • *
  • Posts: 17
  • Location: Boston, MA
monarda, thank you! It's exciting and scary at the same time. I've played with that calculator before, and I think it looks like a good idea to buy overall. However, when I fill out the calculator I feel like I'm taking wild guesses on the "What does the future hold?, Taxes, and Maintenance Fees" sections. It's hard for us to predict how long we'll want to stay here. I'm thinking a minimum of 2-3 years and potentially many more years than that! I love the idea about looking up the past utility bills, thanks!

hdatontodo, this location is pretty close the airport (between orient heights and suffolk downs) so we will hear approaching planes. I don't expect it will bother us much, we live right near a big hospital and the helicopter/sirens/street traffic doesn't bother us.

SwordGuy

  • Walrus Stache
  • *******
  • Posts: 7369
  • Location: Fayetteville, NC
We make darn good money but $290,000 is a lot of money for a house.

What are the annual property taxes like? 

What happens if one of you loses your job?   Can you get by on one income without drawing down your savings?

Will you have any savings to draw down after you plunk down 20% plus fees?


windypig

  • Stubble
  • **
  • Posts: 159
  • Age: 35
  • Location: Vermont, Boston, Cape Cod
  • You are what you hate.
I think East Boston is a good investment.

I also think Dorchester, Hyde Park, Roslindale are good investments in Boston.

Boston of course, has great taxes with the residential exemption. I would be concerned in Eastie about the airport, the casino, and about my commute, whereabouts do you guys work?

290 is a pretty affordable single family in Boston, believe it or not.

Its an old house, are you handy? Contractors definitely charge a "Boston premium"

Are you opposed to being a landlord and buying a multi family / renting out half? Given your income you could swing it.

Check out Metro Credit union - they did my boston mortgage, have great rates and good customer service.

I also have a good inspector if you need a recommendation.
« Last Edit: September 28, 2014, 06:28:06 PM by windypig »

windypig

  • Stubble
  • **
  • Posts: 159
  • Age: 35
  • Location: Vermont, Boston, Cape Cod
  • You are what you hate.
I took the liberty of finding your property online.

Some things to consider, Boston Assesing office lists this property as only having 573 sq feet of living space, whats up with that? The listing online say 1100.

The asking price is almost 100,000 more than the citys assesed value. Now, they are almost never the same, and there is often a spread, but 100,000 is definitely a big spread.

The listing also says something about an encroachment, whats up with that?

monarda

  • Pencil Stache
  • ****
  • Posts: 861
  • Age: 60
ooh, 2-3 years is too short. I think you should be SURE of a 5 year minimum before you think about buying. 

I lived in the Boston area in the early 1980's. I'm not familiar with East Boston, I rented in Belmont and Arlington. OMG, I just looked up the two family house where I used to live, built in 1923. It's been converted into two condos.  The 923 sf 2BR apt I rented is now a condo on Zillow for $376K.  Upstairs is a 4BR 2ba 1800 sf condo for $560K.  (not on the market)  So living in half of a house like this and renting the other half might or might not work out. Perhaps crunch those numbers for available places?

Onomatopoeia

  • 5 O'Clock Shadow
  • *
  • Posts: 17
  • Location: Boston, MA
windypig, thanks for this info, I will contact Metro Credit Union when the time comes. We asked about the encroachment and whether there is an easement. The realtor said he will find out more information for us. It's really interesting about the 573 square feet of living space, we saw it today and the living space is definitely much bigger than that. Does that mean the last time the house was assessed it was actually smaller? Do you have to reassess if you increase the living space?

We are pretty handy but haven't had the opportunity to do a big house type project yet. This house is fine as is, but we would definitely consider updating the kitchen and floors ourselves. I would definitely be interested in buying a duplex and renting out the other half, I just wanted our first mortgage to feel "easy" if that makes any sense.

monarda, we will likely be here longer but I don't think I've ever been able to say with certainty how long I will stay in a place! It really all depends on job prospects and what makes sense at the time. Obviously owning a house will play into the equation!

windypig

  • Stubble
  • **
  • Posts: 159
  • Age: 35
  • Location: Vermont, Boston, Cape Cod
  • You are what you hate.
Onomatopoeia:

The encroachment is probably a fence, and either you or your neighbor is eating in to one anothers land. Considering its a rectangular lot, you might could just do a rough survey yourself, or consider hiring a surveyor.

I would consider the discrepancy in sq footage that the city knows about and what actually exists to indicate that work was possibly done to it without permit. Big problem, at a minimum you can expect the city to find out and your tax bill to ~double.

Another boston site to search for information regarding your property: http://www.cityofboston.gov/isd/permitsearch/default.aspx

This will tell you what sort of work was done to it (legally - with permit) - you can find out who did it and when.

Another site of interest to real estate owners: http://www.masslandrecords.com/



Freedom2016

  • Pencil Stache
  • ****
  • Posts: 753
Re: Potential first time home buyers here. What do you consider when purchasing?
« Reply #10 on: September 29, 2014, 02:07:12 AM »
FWIW, we own a condo in Roslindale and our property's assessed value for tax purposes is about $90k less than its market value (we had a bank appraisal 6 months ago as part of getting rid of PMI).




john6221

  • Stubble
  • **
  • Posts: 130
Re: Potential first time home buyers here. What do you consider when purchasing?
« Reply #11 on: September 29, 2014, 06:50:40 AM »
I recently purchased a home, and while I think a home inspector can give you a good general idea, in my opinion they miss a lot of important stuff.

If I were to do it again, I would hire three independent people to do walk-thrus. I would hire an electrician, a plumber, and a GC/re-modeler. You'll get much more detail from those three than from any home inspector.

With a 100+ year old house, there are a lot of things to consider, and spending a little more up front for a detailed inspection will save you in the long run.

escolegrove

  • Stubble
  • **
  • Posts: 164
    • Reluctant Landlord
What can the house rent for? What will your mortgage be? Do you really want to tie up 20% or fully paid off  when you plan on move on soon and interest rates are at a record low?

While we don't own houses in Boston,  we do live a transient lifestyle with my husband being active duty. We buy almost every duty station. We put as little down as possible financing everything. The goal is to have the tenant pay the houses off not us. We complete gutted our first house before we were transferred. We than rented it out when we left. While landlord management has had its moments. It has been very good for our growing stashe. It really depends on your goals and what you are looking for. On my website I give a completely honest opinion of the good, bad and ugly of landlordship. There is also lots of great resource if you might be interested in thinking about putting your foot in that water.