The Home-ownership Thread

[French Collection]

My second home was in a stagnant market. Small town with 2 main employers. Mining operation shut down and 100+ jobs were lost. I got a job elsewhere but it took me two years to sell. I got 20% less than what we had paid for it 11 years earlier. Factor in interest, upgrades, taxes, etc... It was far from an investment.

 

Markets change all the time, certain properties can handle the downturns. Around here, waterfront always is in demand. Today's hot market can become cold in a hurry due to economic factors beyond your control, even your country's control.

 

I'm still in the ownership camp but I learned a lesson. I'm not in a hot market but it is stable.

[dudacek]

I've lived in the same home in for 20 years.

Over the years it's been worth less than I paid, and 2.5 times more than what I paid.

None of that really mattered because it became my home.

Kids were born and raised there.

It's seen and caused more than its share of joys and frustrations.

That's why it's the best purchase I ever made.

[darksabre]

Bumping this thread back up. As Josie and I approach our move to Buffalo when our lease is up at the end of May, I'm trying to figure out the best option for our housing. 

We're paying a little over $1000/mo for a 2 bedroom apartment with in unit laundry. To get those amenities in a rental in Buffalo looks like we're spending almost $1200/mo. I'm not sure I like that number, especially with Josie currently self-employed.

I think I'm back at buying a house, all things equal. My gross income is pretty good on its own, I have good credit, and it looks like even with taxes and insurance, I could probably easily afford a 30 year mortgage on a ~$90,000 house in Cheektowaga (maybe Cleveland Hill Area?). Downside to buying now is that I wouldn't be able to take advantage of the first-time homeowner stuff, or put as much down right away, but the alternative of finding a rental property that fits our needs/wants seems more difficult. I'd rather be splitting $600/mo than $1200/mo between the two of us. I'm planning to be in Buffalo for at least 2-3 more years, regardless of what Josie's plans are. If I can afford a house all on my own, then I don't have to worry about my living situation here if Josie decides to go on a career related adventure.  :blush: 

I guess my question is, does anyone around here have a real estate agent they like? I guess I wouldn't mind at least sitting down and talking to someone about all of this to see what I'm really looking at financially. And better to get a move on this before I have to cave and find an apartment or a house to rent. 

[nfreeman]

D4rk -- if you're only going to be in a house for as little as 2-3 years, you should not buy.  Leaving aside short-term market shifts, you will spend a ton in transaction costs, both coming and going, that will eat up any savings you might earn relative to renting.  There is also the high risk of being unable to sell in a timely manner when you are ready to leave.

[darksabre]

D4rk -- if you're only going to be in a house for as little as 2-3 years, you should not buy.  Leaving aside short-term market shifts, you will spend a ton in transaction costs, both coming and going, that will eat up any savings you might earn relative to renting.  There is also the high risk of being unable to sell in a timely manner when you are ready to leave.

Probably. I just want to see what those numbers look like. Rental prices are outrageous. 

[TrueBlueGED]

Probably. I just want to see what those numbers look like. Rental prices are outrageous.

Indeed. One of the downsides to the resurgence downtown.

[Doohicksie]

If you're going to buy, and if you can see that you might leave in as little as two years, you probably need to buy into a hot (quickly appreciating) neighborhood.  I grew up in Cheektowaga and while I haven't been there for quite some time I kind of get the feeling that it's not appreciating very quickly.  Maybe some parts of town are better than others.

[Doohicksie]

Consider what you get with the rental price.  If you buy, you are responsible for maintenance and repairs, property taxes, a higher level of insurance (not just your personal goods but also the structure), mowing the lawn, shoveling the driveway/sidewalk, etc.  Some of that stuff requires you purchase things to do the work (lawnmower, snowblower, etc.)  You save money on taxes because you can write off the taxes and interest, so that's a benefit, but you end up paying for a lot of ancillary things that are covered when you're in an apartment.

[josie]

I fear buying. This post is the first I've seen/heard you mention it seriously in a very long time. I wonder what the economy will do in the next few years. I don't want to get stuck in a home we expected to be a "quick little starter" forever. Happened to my parents. They are still unhappy. I don't think the smart money is on buying for that short of term right now. 

 

Rental is expensive, I know. I have money saved up. I don't plan to be worthless for long. Hopefully. Hopefully someone in Buffalo will actually answer me/hire me/take a chance on me/the Devil reduces his interest rates on my soul so I can happily sell it. 

 

Also, I do not plan on going anywhere. If I'm in Buffalo, I'm in Buffalo. I will avoid long distance unless it is absolutely necessary. 

 

Talking is good. Maybe there's a holy grail out there. I also expect more viable rental options to appear in the spring. I realize that's a crap shoot. Best to research now. 

[nfreeman]

Doohickie makes a great point about neighborhood.

 

I'd also suggest that if you consider whether you can swing buying a place in a hot neighborhood, with the idea that you would rent it out if and when you're ready to leave.  (Even better if it has a basement apartment or other rental unit.)  If you're handy and have the time and inclination, you can buy a fixer-upper and do the work yourselves over time.

 

That way you amortize closing costs, get the benefit of long-term appreciation and can sell as and when you are ready.

[TrueBlueGED]

I'm going to hijack the out of this thread with a rental queation (I really don't think my question deserves its own). For the first time in my life I may have to go apartment hunting without actually being able to visit the apartments in person. Anyone have advice on how to go about doing this without being stuck in a lease that make a you want to stab yourself in the eye with a spork on a daily basis for a calendar year?

[LTS]

If you are buying i would do so in the VERY near future.  However, you are going to run up a few trends.

 

1. You're going into the prime buying season.  This means more competition and less odds of negotiating a better deal.

2. Interest rates are going to go up.  This will change the financials of the deal quite a bit.

 

I would always want to buy over rent but unless you are going to be there over 5 years it's tricky.  Use the dinkytown.net calculators to do some preliminary estimations on your payback period, etc.

 

You also need to factor in wanting to buy a house when the interest rate is back at 7% as opposed to it's current level.  So, weight it out and change your plans if need be for how long you'll stay.

 

I can reach out to get the name of an agent in Buffalo.  I'm sure the agent I rely upon in Rochester knows someone.

I'm going to hijack the ###### out of this thread with a rental queation (I really don't think my question deserves its own). For the first time in my life I may have to go apartment hunting without actually being able to visit the apartments in person. Anyone have advice on how to go about doing this without being stuck in a lease that make a you want to stab yourself in the eye with a spork on a daily basis for a calendar year?

 

Try to find a month to month arrangement ahead of time and then use a few months when you CAN look at the area to find what you really want?

[biodork]

Probably. I just want to see what those numbers look like. Rental prices are outrageous. 

You should see how bad it is in the Denver metro area... I was renting a 1 BR, 885 ft2 apartment (granted with full size laundry and a detached garage) without any utilities included for over $1500/month.  This was in the suburbs, too (maybe 20-30 min. from downtown).

 

Crazy rent prices are what changed my mind about buying a house again so soon, but the only reason I did it knowing I might not stay in this house very long is that I'm confident I can rent (or sell) the place when I'm ready to move again.  That would absolutely not have been the case back in PA, and whether it makes sense for you (d4rk and Jo) now depends very much on the market in Buffalo.

Edited January 6, 2017 by biodork

[Ogre]

I took a different path when I grew tired of renting. I paid cash for a mobile home in the nicest park I could find. I feared it at first but I paid $2500, put another $2000 into it over the 8 years I ended up there. Saved $30G and sold it for an easy $10G once the house was built. It was actually a fairly nice experience as well. Very eclectic neighborhood. Best part by far though was the cash.

[darksabre]

Doohickie makes a great point about neighborhood.

 

I'd also suggest that if you consider whether you can swing buying a place in a hot neighborhood, with the idea that you would rent it out if and when you're ready to leave. (Even better if it has a basement apartment or other rental unit.) If you're handy and have the time and inclination, you can buy a fixer-upper and do the work yourselves over time.

 

That way you amortize closing costs, get the benefit of long-term appreciation and can sell as and when you are ready.

This is certainly an option. I'm handier than most so I don't mind tackling big and small projects, plus I have many friends and resources when it comes to DIY advice and help.

 

I lived in a house for a while that was a rental. The owner lived in CA and had a contractor friend who would check in one in a while. It was a pretty good deal.

 

I'm really just exploring options. I'd like to just rent a house for a decent price, but selection is always a mystery.

I took a different path when I grew tired of renting. I paid cash for a mobile home in the nicest park I could find. I feared it at first but I paid $2500, put another $2000 into it over the 8 years I ended up there. Saved $30G and sold it for an easy $10G once the house was built. It was actually a fairly nice experience as well. Very eclectic neighborhood. Best part by far though was the cash.

I would do this if I could talk Josie into it. There are a lot of nice neighborhoods around now that offer mobiles that might as well be houses. I get shut down when I bring it up though. :ph34r:

You should see how bad it is in the Denver metro area... I was renting a 1 BR, 885 ft2 apartment (granted with full size laundry and a detached garage) without any utilities included for over $1500/month. This was in the suburbs, too (maybe 20-30 min. from downtown).

 

Crazy rent prices are what changed my mind about buying a house again so soon, but the only reason I did it knowing I might not stay in this house very long is that I'm confident I can rent (or sell) the place when I'm ready to move again. That would absolutely not have been the case back in PA, and whether it makes sense for you (d4rk and Jo) now depends very much on the market in Buffalo.

It's really more about our game plan. I'm hoping to hang around the area for maybe 5 years. I want to go back to school and get an MBA and put in as many years as possible at my current employer. It's a good situation that I have no plan to leave voluntarily.

[darksabre]

If you are adventurous, get a fixer upper on the East Side from the City auction with empty lots next to it. Figure the house will be 20k and the lots 5k each. People our age were doing that on the West Side last decade; bit it's pretty well picked over. You could put up a fence if you want. It would probably take 25k more to gut and fix the place., so about 60k all told for a nice small home and three lots in the City. That type of place would hold value and if you pay attention to Buffalo Rising you'll get an idea for what neighborhoods are going to appreciate most. Taxes will be cheap.

This is something I have huge respect for, but it's probably a little too much for us right now. I have a buddy who did this with a homesteader house on the west side and while very cool, it's essentially a full time job for him. I think if I were single and had lots of free time, a project over in Broadway-Fillmore or the like would be right up my alley. Right now though, we need something less involved.

[biodork]

Bankrate.com agrees with you, d4rk:

 

Wages Lag Home Prices, So Buy Soon

 

 

Doug Duncan, chief economist for Fannie Mae, says, “The improvement in labor force participation and rise in compensation are generally positive results for housing.”

 

Sounds kind of promising, I guess. But hourly earnings tell an incomplete story because people worked 12 fewer minutes per week than a year before. Average weekly earnings rose 2.3 percent in 2016, according to the Bureau of Labor Statistics. The average weekly pay went from $871.47 in December 2015 to $891.80 last month.

 

Is a 2.3 percent raise enough? Not if you’re a renter. And especially not if you’re a renter who wants to buy a home.

 

...

 

When home prices are rising faster than wages, I think it’s a good idea to buy a home. Does that apply to everyone? No.

 

If your job stability is shaky, or you think you might want to move to another city within a few years to chase opportunity, or if your domestic life is unstable, or if you’re rebuilding your credit, go ahead and rent. But if you’re ready for homeownership, don’t be led astray by outdated notions that small down payments are evil. They’re beneficial when home prices are rising faster than you can save for a down payment.

 

...

Edited January 9, 2017 by biodork

[darksabre]

Good stuff bio.

I think I'm going to start looking and talking to realtors. Maybe in a year we'll see where things are at. I have concerns about where the economy is headed under Trump, so I want to see what his first year looks like. 

[Jsixspd]

We bought a solar envelope home this summer.   It has a two story "greenhouse" on the south side - which is all windows with shades.  The idea being - open shades when sun is shining to heat up the 'greenhouse' which warms the thermal mass in the crawlspace (rocks added and covered with poly to prevent soil gasses, radon, etc) .  Then close the shades after dark to reduce heat loss through the glass.  The thermal mass retains heat energy overnight which helps reduce the heating system load on the house.

 While it's a wonderful home, I hadn't realized until actively LOOKING for sunshine to open the shades how absolutely dismal and almost sunless mid-Michigan winters are.  LOL.  I think we've had maybe 1 sunny day in the past 2 or 3 weeks.  A couple times, it's teased being sunny - I'll spend 10 minutes opening shades, only to find the sun disappears and it's just gray and cold - no heat gain through the windows. 

At least on the plus side - it's an extremely well insulated, air-sealed home, with minimal north-facing windows so that helps even without the sun. 

[darksabre]

We bought a solar envelope home this summer.   It has a two story "greenhouse" on the south side - which is all windows with shades.  The idea being - open shades when sun is shining to heat up the 'greenhouse' which warms the thermal mass in the crawlspace (rocks added and covered with poly to prevent soil gasses, radon, etc) .  Then close the shades after dark to reduce heat loss through the glass.  The thermal mass retains heat energy overnight which helps reduce the heating system load on the house.

 

 While it's a wonderful home, I hadn't realized until actively LOOKING for sunshine to open the shades how absolutely dismal and almost sunless mid-Michigan winters are.  LOL.  I think we've had maybe 1 sunny day in the past 2 or 3 weeks.  A couple times, it's teased being sunny - I'll spend 10 minutes opening shades, only to find the sun disappears and it's just gray and cold - no heat gain through the windows. 

 

At least on the plus side - it's an extremely well insulated, air-sealed home, with minimal north-facing windows so that helps even without the sun. 

Stuff like this is something I'm very conscious of. Being in the solar industry, my major goals for any home I live in is to spend time making them more efficient and more "in-tune" with nature. 

 

Someday I'd like to do a new build that makes use of features like you mention. I want to experiment with natural air flow for cooling in the summer too. 

[BMWR100RT]

Stuff like this is something I'm very conscious of. Being in the solar industry, my major goals for any home I live in is to spend time making them more efficient and more "in-tune" with nature. 

 

Someday I'd like to do a new build that makes use of features like you mention. I want to experiment with natural air flow for cooling in the summer too. 

Your in the solar industry? In what capacity? I went solar through my whole house using SED last summer. Awesome stuff.

[sabills]

More and more of my friends are going the route we went a few years ago, buy a two family home and rent out half. If you go to the right place you can effectively get your mortgage paid for by renting out the place. I've had two friends in the last 3 years buy homes in North Buffalo not far from Hertel and do just that. Our home we rent out and it pays for half our mortgage, but we really liked being in the Elmwood area and it was really the only way we could afford owning a home there. Part of me wishes we had waited a while and ended up on Hertel, too, but I digress.

 

I've been renting out half of my place for 3.5 years now and I don't have many complaints. We rent mostly to people in their mid-20's, kids in grad school or just getting their first job. We've had some trouble getting rent consistently on time from a couple tenants, but it hasn't been too bad. We might just have been lucky, though. Biggest downside is that with that age group is that they move around a lot, so we're on our 3rd set of tenants in that time.

 

I don't think its a long term answer for us. I plan on moving somewhere with better schools and an actual backyard at some point, but recently the wife has been playing more and more with idea of converting the place into a single family home. I'm...not sold on that idea, but its at least a few years before we have to really think about it. Personally I'd like to move, but keep the place (maybe even put a third apartment in the attic, though that would involve some work), eventually pay it off, then put the income right into college funds for kids. Or sell it outright later on and do the same.

 

Anyways, I guess in general I think its a decent option for people in a similar position to us or our friends. Housing is expensive these days, its a good way to defray costs.

[biodork]

Good stuff bio.

 

I think I'm going to start looking and talking to realtors. Maybe in a year we'll see where things are at. I have concerns about where the economy is headed under Trump, so I want to see what his first year looks like. 

 One more piece of advice; if you go down that route, make sure you have a good feeling about the loan officer you work with, because later in the process you'll spend as much time interacting with them as your realtor, and a good one can really make your life easier through the application process.  If you like your realtor and trust them, they should be able to recommend someone that they also trust and have worked with in the past.  Of course, don't feel obligated to go with someone just because your realtor recommended them, but it's worth checking them out.

[darksabre]

More and more of my friends are going the route we went a few years ago, buy a two family home and rent out half. If you go to the right place you can effectively get your mortgage paid for by renting out the place. I've had two friends in the last 3 years buy homes in North Buffalo not far from Hertel and do just that. Our home we rent out and it pays for half our mortgage, but we really liked being in the Elmwood area and it was really the only way we could afford owning a home there. Part of me wishes we had waited a while and ended up on Hertel, too, but I digress.

 

I've been renting out half of my place for 3.5 years now and I don't have many complaints. We rent mostly to people in their mid-20's, kids in grad school or just getting their first job. We've had some trouble getting rent consistently on time from a couple tenants, but it hasn't been too bad. We might just have been lucky, though. Biggest downside is that with that age group is that they move around a lot, so we're on our 3rd set of tenants in that time.

 

I don't think its a long term answer for us. I plan on moving somewhere with better schools and an actual backyard at some point, but recently the wife has been playing more and more with idea of converting the place into a single family home. I'm...not sold on that idea, but its at least a few years before we have to really think about it. Personally I'd like to move, but keep the place (maybe even put a third apartment in the attic, though that would involve some work), eventually pay it off, then put the income right into college funds for kids. Or sell it outright later on and do the same.

 

Anyways, I guess in general I think its a decent option for people in a similar position to us or our friends. Housing is expensive these days, its a good way to defray costs.

 

Our friends are doing this, but I don't think it's for me. If I own a house, I would rather have something smaller that is all to myself. I want to get back to playing saxophone again.  :P 

 

Hertel you say? We're trying to move somewhere near there. We'll see if I have any luck.

 

 

 One more piece of advice; if you go down that route, make sure you have a good feeling about the loan officer you work with, because later in the process you'll spend as much time interacting with them as your realtor, and a good one can really make your life easier through the application process.  If you like your realtor and trust them, they should be able to recommend someone that they also trust and have worked with in the past.  Of course, don't feel obligated to go with someone just because your realtor recommended them, but it's worth checking them out.

Good call. I know at least two people who had major problems with their loan providers halfway through the process. One of them was a former real estate agent too. Go figure. 

[sabills]

Our friends are doing this, but I don't think it's for me. If I own a house, I would rather have something smaller that is all to myself. I want to get back to playing saxophone again.  :P 

 

Hertel you say? We're trying to move somewhere near there. We'll see if I have any luck.

 

 

Good call. I know at least two people who had major problems with their loan providers halfway through the process. One of them was a former real estate agent too. Go figure. 

Kenmore/North Buffalo is a nice spot to look. Nice, older homes, good neighborhoods, houses are relatively inexpensive. If you're looking to be in the city without being too in the city its a good spot.