Post # 1
To the point: Have any of your bees jump into homeownership instead of renting an apartment/house, even though it was not the home you wanted in the long-run, just to have a place of your own meanwhile you keep saving for your “forever” home? and how was your experience? Have any of you purchased a home and stayed in it for just 2 years or less and did you take a big loss from that? Have you purchased a starter home, and rented it instead of selling when you found/purchased your long-term home?
Background story: I have been with my SO for 4.5 years, and we live in two different cities about 15-20mins from each other. I never liked the idea of renting an apartment because I feel like it’s “wasted” money, and rent is actually way higher than paying a mortgage in my area… For the past year we have been talking about moving in, because it’s such a hassle how things are right now, with the distance & other things, and we *need* our own space, and I do especially for my work. When we started talking about it we realized we did not have enough for a down payment & closing costs. Now we have enough, but only for a “starter” home, not the type of home we want or in the location we want to settle in for the long run, but it’s still nice to have our own privacy and yard for our dog, and the mortgage is almost half the amount of an apartment rental in a similar area (I’m not even considering the ghetto ones, too many robberies and kidnappings happening lately!). To put into perspective, the home would have a mortgage of about $800 including insurance & tax, and an apartment with same bedrooms & ok area would be $1,500 a month only including trash and water bill.
We expect to have enough for our “forever” home in 2 years and since if we sell the “starter” home too soon we’d end up losing money, I’m contemplating the idea of renting it until selling it wouldn’t be a huge loss (We’re ok with losing about $13,000 max, like if we don’t get that back after the sale and paying realtors, from the down or closing $ we invested, because it would be like if we were renting but cheaper and on our own property). I’m just not sure how realistic this is. Sometimes what I plan out in my head doesn’t actually work out in real life. Has anyone else done this and what was your experience like? Is it as “easy” as it sounds?
Post # 2
We don’t consider our house to be our forever home, because it’s 3 bedrooms and when we have kids we’d like to have at least one more. But our house is in a rapidly gentrifying area, according to Zillow it’s currently worth over 20% more than what our offer was.
Have you reached out to any realtors in your area? We found our realtor at an open house, and he was great. A local real estate agent can offer a lot of insight, and you don’t have to pay a cent unless he or she finds you a house!
Post # 3
My ex husband and I bought our house for 300K in 2006 at the height of the housing bubble. Two years later we were divorcing and tried to sell it and it appraised for $210,000. My current husband bought his house in 2007. Now, 8 years later he is still underwater for what he owes for it. Luckily we aren’t needing to move any time soon. I realize that those were bad times in the real estate industry- but it’s not always easy to sell a house when you want to- so you may be stuck in your house longer than you planned.
Post # 4
We purchased a brand new build townhouse in an upscale development knowing it wouldn’t be our forever home. We fortunately made about $40k in equity when we sold it a year later to buy bigger (again not our forever home. What we are okay with until we pick out land to buy and build on). I hate the idea of renting and homes (in our area at least) sell quickly making them a great option.
Post # 5
I think owning is almost always better than renting. my first home was not my forever home. The one we are in now was a fixer but I love they way it is now. We put a lot of work in it. I think VERY few people buy their forever home first time out.
Post # 6
unicornphish: For us our “starter” home that we can afford is basically a 2-3 bedroom manufacturer home (not the kind in trailer parks, but these come with they’re own property & have foundation & wood walls/frame) and that’s nowhere close to what we actually want to own in the long run, but to me it’s better than sharing a wall with someone else, I just don’t know if it’s that much worth it. We haven’t talked to any real estate agents, but I’m thinking we should go see a broker to get a closer estimate of what’s the max house we can afford at this point & also to help us start planning for our long-run future home.
eeniebeans: That’s what worries me, about not being able to predict the market or knowing when it’s the “right time”. We have the idea of possibly renting the home for a few years instead of selling it (when we find our long-term house & are able to afford it). But we’re so new at this, I don’t know if that can actually work out or what can go wrong with that plan.
Post # 7
I don’t think there is anything wrong with buying a starter home before you buy your forever home, but you need to be prepared to stay in that home for longer than expected if the property market doesn’t go the way you hope.
Post # 8
We bought our first home at the end of 2013 knowing it would only last us through 2 toddler aged kids. Rent is expensive and a home is a good investment in our area. we will most likely rent it out when we move to a new place in 5 or so years.
Post # 9
I think it’s crazy talk to just buy your “forever” home outright unless youre a trust fund bebe. I dont know anyone who’s done that.
Post # 10
Ours is sort of both. The way it is right now is not how we want it to stay forever. We’re pretty much planning to “flip” it to our dream home. I have drawn up the blueprints and my husband’s pretty handy so we plan to remodel and add onto the home we have now. We also bought it because renting is such a major waste of money and our mortgage is ridiculously cheap (half the cost of renting a 2bd apartment).
Post # 11
bellanotte11: We bought a starter home for $127,500 (1500sq ft, built 2007, 3bd2bath, nice neighborhood) because in order for us to buy our forever home the way we envision it being would require us to save up quite a bit as we’d like to live on a bit of land.
When buying our starter home we did make sure to account for resale value (our house could probably sell for about $20k+ more than what we paid for it just 2.5 years ago), and it needed to be able to house us until we do find/save for our forever home (for us that meant we needed the space to house at the very least us and 1 child comfortably). I didn’t want to be forced out of a home because we ran out of space.
I personally wouldn’t buy a home unless I was planning on being in it for at least 5 years. Unless you are REALLY committed to the idea of renting this home out after you move, I wouldn’t. Being a landlord can be much more stressful/expensive than you’d expect.
Post # 12
Several years ago, long before we even met, my now husband moved out of his parents’ house and into his own, which he purchased. It’s a great house, you could easily raise a family here with room to spare. I would definitely call it a forever home.
However, neither of us like the state that we live in. We’ll be moving in about a year. The only thing I’ll miss is our house!
Post # 13
You certainly don’t have to buy a forever home, but it is almost never a good idea to buy a house you only intend on staying in for a few years. There are calculators you can google, but closing fees, realtors cuts, taxes, any home maintance. You will not get any equity in a year.
Post # 14
My SO owned a house for about 2 years, he only JUST broke even when he sold it (even with new floors, window coverings, kitchen and bathroom) but that was due to the property market at the time, and he couldn’t wait any longer to sell it.
We currently rent the unit we live in ($300pw), but once we are both working full time we will be saving for our first (read: start up) house. Even a shitty house that needs extensive renovations will cost us at least $400k. We don’t want to live in this area for ever, but probably will for the next 10-15 years. After that we plan on purchasing acreage and building our dream house a couple hours drive out of the city.
The average mortgage in my city is apparently $600 a week (for a $400k mortgage). Rent is AT LEAST $200 cheaper than that.
Post # 15
We are searching right now for a home that wil last us 5-7 years. If we cannot find that, we will rent until we can.