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+--- Thread: ...and you thought Tysons had traffic now. (/showthread.php?tid=5352)
- .RJ - 01-23-2007
WRXtranceformed Wrote:Wow I'm really surprised you guys still think that renting is a better solution than buying =P
As predictible as the sunrise
I was waiting for you to chime in.WRXtranceformed Wrote:The key is to get in on a great deal in an area that is always going to be popular for relo's or that has a high rate of growth.
Thats my point. That isnt the market right now in NoVa. Prices are dropping and rent is cheap. If you are not willing to stay 10-15 years and make the most of the "investment" of the home then you are going to end up losing money when you sell. It has nothing to with what I think anyone should do, its black and white, dollars and cents. The numbers get skewed even further if you are taking the $$ you arent spending into a mortgage and invest it in a 401k. If you are not in a rapid growth housing bubble, you'll do better off with your $$ there.
Where you are looking to buy, further out in winchester where your work is it begins to make a lot more sense. I am not making blanket statements
- Apoc - 01-23-2007
.RJ Wrote:If you are not willing to stay 10-15 years and make the most of the "investment" of the home then you are going to end up losing money when you sell.
Let's be clear about this. You will not lose money when you sell, you will have spent more at the end of the term than if you were renting. The only way you lose in the conventional sense is if your house depreciates.
- .RJ - 01-23-2007
Apoc Wrote:Let's be clear about this. You will not lose money when you sell, you will have spent more at the end of the term than if you were renting. The only way you lose in the conventional sense is if your house depreciates.
No, I'm talking about losing money. As in, you have to come up with cash to get out and make the sale. I am also making a few assumptions - The market is flat, and your house gains very little (or no) equity, and you havent paid additional money into the mortgage, just the standard payments which are almost all interest for the first few years. Add in any repairs that have to be done to sell the house, realtor/closing fees, and you can see where you'd be upside down.
- Apoc - 01-23-2007
I think those assumptions are the error. I'm not of the opinion (bold because all of our market forecasts are opinions at this point) that it will take 10-15 years for your house to appreciate enough for the equity to cover sale/closing costs. I really don't think the market is nearly as bleak as you paint it. A 1% yearly gain over 5 years should easily cover that stuff.
With respect to repairs, just don't piece a piece of shit. :wink: Most things that sellers spend money on are returned 1-2 fold in the sale price... even in a flat market. If something is truly broken well then you'd be spending that money anyway even if you were staying.
The glass of
![[Image: kool.gif]](http://www.rr-ax.com/bbs/images/emoticons/kool.gif)
is half full!
- .RJ - 01-23-2007
What are the typical closing costs?
And how much of the principal will you have paid down in 10 years on a $600k mortgage?
- Apoc - 01-23-2007
$98k but you'd be retarded to take on a $600k mortgage.
After 10 years you would have paid $300k down to $251k.
Closing costs aren't gonna run you $49k.
edit: 3% is a good estimate for closing
- mrbaggio - 01-23-2007
.RJ Wrote:What are the typical closing costs?
And how much of the principal will you have paid down in 10 years on a $600k mortgage?
Closing cost run about 3% of the mortgage amount. Who here can afford a 600K house?
- Mike - 01-23-2007
mrbaggio Wrote:.RJ Wrote:What are the typical closing costs?
And how much of the principal will you have paid down in 10 years on a $600k mortgage?
Closing cost run about 3% of the mortgage amount. Who here can afford a 600K house?
the calculator i just ran says with my pretty healthy salary, i can afford a 200k house
- .RJ - 01-23-2007
mrbaggio Wrote:Who here can afford a 600K house?
I already explained that - I was just using it as an example.
- Apoc - 01-23-2007
An example of how closing costs are marginalized by staying in the house for 3 years assuming zero growth?
Mike Wrote:the calculator i just ran says with my pretty healthy salary, i can afford a 200k house
That sounds about right. Our combined salary in '01 was around what you make and we were pressed to pay for a $215k house. It's damn near impossible to buy anything in this area these days if you're single income and don't want to rent rooms out.
- HAULN-SS - 01-23-2007
I'm right there with you mike. I actually had my shit run through a lender, and it was a bit more than 200k, so I went on a search for HOUSEs in this area around 200k. Nothing, nada, zip. 250 MIGHT get you in the market for something in this area, 300 to be comfortable. 200 buys a 550sq ft condo on the eleventieth floor.
- .RJ - 01-23-2007
Apoc Wrote:An example of how closing costs are marginalized by staying in the house for 3 years assuming zero growth?
No, an example of getting alot more for your dollar by renting than buying.
- Mike - 01-23-2007
HAULN-SS Wrote:I'm right there with you mike. I actually had my shit run through a lender, and it was a bit more than 200k, so I went on a search for HOUSEs in this area around 200k. Nothing, nada, zip. 250 MIGHT get you in the market for something in this area, 300 to be comfortable. 200 buys a 550sq ft condo on the eleventieth floor.
actually, i lied. it said 250 w/ mine and my girlfriend's expected salaries combined. mine makes up 75% of that so i guess the estimate would be around 180. 180 MIGHT get you a shithole in winchester.
- WRXtranceformed - 01-23-2007
You guys also aren't taking into account that if you're smart, you won't be paying the whole mortgage amount yourself. You're mostly all renting with other people right? So if you find a few renters you can significantly reduce your monthly mortgage payments. A bunch of my friends do this, and they reap the benefits of building equity.
- WRXtranceformed - 01-23-2007
Mike Wrote:the link above takes everything you mentioned in to account. appreciation, tax breaks, etc.Keep in mind too that a generic calculator isn't going to give you a good preview of your financial situation. You really need to sit down with a loan officer to determine whether you can afford to own a new home and whether it works for your future plans. For 95% of the people I speak with, regardless of whether they're a client of mine or not, buying is the smartest thing in the world. Especially if you have a wife or renters to go in on it with you.
As long as you have stable renters or a wifey / fiance you'll probably end up paying as much as your monthly rent for a mortgage payment plus you're enjoying the benefits of homeownership. I'm in a worse boat than all of you guys as I'm looking to put a contract down with just me carrying the payment. If I can find renters, great... if not, my goal is to be prepared for it. You won't see me ever throwing away 800+ bucks a month to rent somewhere though, I'll stick it out at home with the momdukes until (*hopefully*) the end of this year.
- CaptainHenreh - 01-23-2007
WRXtranceformed Wrote:You guys also aren't taking into account that if you're smart, you won't be paying the whole mortgage amount yourself. You're mostly all renting with other people right? So if you find a few renters you can significantly reduce your monthly mortgage payments. A bunch of my friends do this, and they reap the benefits of building equity.
That's not really the case for all, or even really most of us if we wanted to be homeowners.
- .RJ - 01-23-2007
WRXtranceformed Wrote:You're mostly all renting with other people right? So if you find a few renters you can significantly reduce your monthly mortgage payments.
Lee, RTFT
Thats why I used $2350/$600k in my little java calculator.Renting out some rooms is a great way to cover your mortgage cost, but you still have to be able to afford the place on your own. If the house next to the one we are going to rent was selling for $400k ($2400/mo for a 30 yr loan @ 6%) , then I'd look pretty hard at buying and then rent 2 rooms out.
WRXtranceformed Wrote:As long as you have stable renters or a wifey / fiance you'll probably end up paying as much as your monthly rent for a mortgage payment plus you're enjoying the benefits of homeownership.
If you have stable renters AND a wife, MAYBE. Big maybe. The mortgage on the place we're looking at renting would be ~$3600/mo.
WRXtranceformed Wrote:You won't see me ever throwing away 800+ bucks a month to rent somewhere though
How much are you going to "throw away" on property taxes, HOA, interest, etc when you buy though? Thats the entire point of the discussion. Buying is a lot more complicated than just "writing a check to yourself every month". I know your perception is going to be a bit skewed since you sell new homes, but try not to let the
blur your vision I'm just looking at the hard numbers here.
- WRXtranceformed - 01-23-2007
CaptainHenreh Wrote:WRXtranceformed Wrote:You guys also aren't taking into account that if you're smart, you won't be paying the whole mortgage amount yourself. You're mostly all renting with other people right? So if you find a few renters you can significantly reduce your monthly mortgage payments. A bunch of my friends do this, and they reap the benefits of building equity.
That's not really the case for all, or even really most of us if we wanted to be homeowners.
Why not?
- CaptainHenreh - 01-23-2007
WRXtranceformed Wrote:Why not?
C'mon Lee. Who am I and my wife going to room with?
- Apoc - 01-23-2007
CaptainHenreh Wrote:WRXtranceformed Wrote:Why not?
C'mon Lee. Who am I and my wife going to room with?
Yeah but it's basically the same thing 'cause you have dual income.