Small house vs. apartment

[DaveSimmons]

I didn't think that home in Bellevue, WA , because the real estate listing shown that there are detach houses around $300K, and $800K houses are much nicer than the average houses in better neighborhoods.

^ the west / downtown part of Bellevue is much more expensive than the outlying areas to the south and east. $300K will only get you a condo in my fancy-pants part of town.

 

[DrPizza]

I'm not going to get into the argument about townhomes vs. detached or wheter a townhome is a good buy or not. It is *entirely* market specific.

That being said here's all I have to say about buying...

Do you have $1500 extra laying around to pay for a new furnace/ac compressor/water heater/ect should one of those fail? How about money for a new stove or fridge if one of those crap out?

Also, do you have serious plans to stay there for 5+ years? If not you can kiss away $5000+ in realtor fees and state/city fees getting out of the place if you move.

Buying isn't a slam dunk no brainier idea. There are a lot of unnaccountable costs that you have to plan for and it's not any where as easy to pick up and leave if you aren't happy where you are.

I plugged your numbers into a mortgage calculator, included for PMI, took a shot at your annual insurance premium, 10% down, etc. Looks like just a bit over $450 per month to own. Since you're saving $200 per month vs. renting, after about 10 months, you should have $2000 saved up for such problems. If you learn to do things yourself, most of those problems would cost a fraction of what it would cost for a contractor; the exception, probably, is that the odds of you purchasing a furnace without the assistance of a contractor is slim - wholesalers often won't sell to joe blow off the street. Replacing a roof isn't one of those "unexpected" things - you can practically plan for it down to within a year or two. It's amazing how 15 year shingles will look nice after 13 years, and during the 14th year, start showing signs of decay, and after the 15th year, you think "uh oh." Another really important thing to know is your local rates for such things. I've noticed from threads here that the exact same type of construction/repair job can vary by a couple hundred percent in cost from one region to another.

 

[vi edit]

All I know is that Murphy guy is a cold hearted bastard and stuff rarely fails by itself. You'll go three years without a single thing going wrong and then WHAM! The bottom falls out of the water heater soaking your basement, the sump pump dies, a lightning strike knocks out both of your garage door openers and the thermostat thingy in the oven stopped working. In like 3 days time.

Thank god I had a home owners warranty that came with the purchase we could renew for cheap (like $350 a year) and it only cost us $150 in deductables for a lot of that. But without the warranty you are looking at a lot more.

Just saying...be preparred to shell out at the least opportune times.

 

[XZeroII]

Here's the biggest thing. If you're not planning to stay there at least 10 years (minimum), don't even think about buying a house. So when looking, ask yourself if you could stay there for 10 years or more. Everyone else has great info as well.

 

[alkemyst]

I think you will be paying close to 650 with mortgage taxes and insurance. A house that cheap has to be crappy will not last 30 years, house price for that elcheapo house will not rise, if you are 100% sure that you can sell without taking a loss, then go for it

Not necessarily true, but we don't have enough details to know anything.

There are tons of deals at or below $100k right now.

Prior to the boom, $60-75k bought a really nice townhome in many areas.

 

[JMapleton]

I would avoid a house, IMO. You have to buy all kinds of extra stuff that adds up like lawnmowers, tools, hoses, and then when something breaks, repair costs.

A house is nothing but trouble and a money pit.

 

[pontifex]

Not necessarily true, but we don't have enough details to know anything.

There are tons of deals at or below $100k right now.

Prior to the boom, $60-75k bought a really nice townhome in many areas.

yeah, you have to remember I live in a very rural part of of PA too. I'm not living in NYC or California.


as for renting, I hate paying that much money and not owning something in the end but it seems like that is going to be my best option. I'm not wealthy by any means so having to pay for stuff out of pocket sucks.

I have no idea what i'm going to be doing a few years from now. I'll probably be at the same job, etc with my luck.

 

[duragezic]

Well I'd only be buying a house, especially now, if I planned to stay there and raise a family. If you lost your current job, will you be able to find another decent one in the area? In a small or rural area, that answer can often be no.

Also a connected townhouse sounds like an apartment to me. I lived in such a place and had this total douchebag neighbor who pounded bass constantly, so no different than an apartment.

I don't mind renting now even though it's quite expensive. Main reason is I'm 25 and single and no way I'm ready to buy a house even if I could afford it. Also it's kind of nice not having to own much or worry about much. Something major takes a shit and maintenance is in ASAP. Last summer my roof started leaking but it was all quickly handled. My parents house has had a number of problems with a leaky roof, so it's great feeling to have a number to call and zero cost to me to have it fixed.

 

[TheStu]

yeah, you have to remember I live in a very rural part of of PA too. I'm not living in NYC or California.


as for renting, I hate paying that much money and not owning something in the end but it seems like that is going to be my best option. I'm not wealthy by any means so having to pay for stuff out of pocket sucks.

I have no idea what i'm going to be doing a few years from now. I'll probably be at the same job, etc with my luck.

Where abouts in PA are you?

 

[akshatp]

You can buy a house for $69k? Damn. I pay half that in rent in one year. I'm doing something wrong.

 

[zerocool84]

You can buy a house for $69k? Damn. I pay half that in rent in one year. I'm doing something wrong.

Na he just probably lives in an undesirable area.

 

[Lifted]

If you ever come to NYC, there are some great detached homes here as well.

http://newyork.craigslist.org/brk/reb/2168751583.html

 

[Bignate603]

And, let not forget the tax deductible on mortgage interest that associated with buying.

If his mortgage payment is only $400 a month and he doesn't have many other deductions it's possible he'll be better off just taking the standard deduction rather than itemizing.

 

[alkemyst]

You can buy a house for $69k? Damn. I pay half that in rent in one year. I'm doing something wrong.

He said it was a townhouse. You get a lot of 'economies of scale' with one.

Like I said, prior to the boom; it wasn't uncommon to find townhomes in even decent areas below $100k.

 

[dawp]

there is the option of renting a house.

 

[rcpratt]

You can buy a house for $69k? Damn. I pay half that in rent in one year. I'm doing something wrong.

You pay $3k/mo for rent, really?

 

[rcpratt]

I would never buy a townhouse...all of the disadvantages of an apartment with hardly any of the benefits of a house.

 

[pontifex]

there is the option of renting a house.

yeah but then i'll more than likely be paying even more than an apartment as every house I've seen for rent, even if it was in my price range rent wise would make me pay for oil too, which could add on a ton of extra money. Pretty much the rent + electricity and phone, and cable is what i can afford.

 

[pontifex]

Where abouts in PA are you?

I'd rather not say specifically but its central PA, not too far from Harrisburg.

 

[duragezic]

yeah but then i'll more than likely be paying even more than an apartment as every house I've seen for rent, even if it was in my price range rent wise would make me pay for oil too, which could add on a ton of extra money. Pretty much the rent + electricity and phone, and cable is what i can afford.

I lived in an oil furnace heated house for about a semester. It wasn't terrible considering heating a place with electric or natural gas in that kind of climate (northern UP of MI) is pretty expensive either way.

If you're that short and only being able to just meet the bills, why not stick around home until things improve? You're looking at being able to move out on your own versus being able to save a lot less money. Depends how much either means to you. But personally if I was at this point, I'd definitely not buy a house. Renting a small apartment would be a possibility though.

 

[the DRIZZLE]

Since you know the owners just ask them what the taxes and HOA fees are. Also ask them what how much they pay in the summer and winter for gas and electric. Find out if any utilities are shared with the other units. Once you have these numbers its easy to compare the two. For maintenance I would assume $1500/year just to be conservative but I would expect the actual number to be lower.

 

[EagleKeeper]

but then i have to pay for oil, taxes, insurance. Any problems have to be repaired by myself or I have to pay someone to do it. Plus any other maintenance costs.

wow, so if i can't put down 20% theres a mortgage insurance fee. no way i can put down 20%, maybe like 4-5%

Given the price and potential mortgage payment, you may not very little tax benefits out of the house.
For a Single, you will have to have $5400 in deductions.

At a $400 payment (as suggested by some), you would be at about $4400 in interest, $500 in taxes.
You will have to come up with another $500-1000 in income tax and charity each year to make itemization beneficial.

A $500 payment will cover the standard deduction for interest; the Schedule A will benefit you the taxes, and charity write offs.

Depending on when you purchase, you may get one years tax benefits if you purchase early in the year to get the max interest over the year. the closing costs for additional government fees/taxes also can be written off the first year.

Unless you have a $4-5K cushion after move in; you are skating on thin ice to make it and not pull out your hair.
You may need furniture and the reserve for any maintenance issues.

Right before Xmass, I recently had a water line valve let go.
$1600 for just the mopup; $300 for the plumber to replace the valve.
Insurance has a $1K deductible which I have to eat along with the plumber.

 

[M0oG0oGaiPan]

You could rent out a room if you picked up the townhouse and charge the person something like 300 plus utilities.

 

[pontifex]

You could rent out a room if you picked up the townhouse and charge the person something like 300 plus utilities.

Definitely don't want a roommate, especially a total stranger.

 

[pontifex]

I lived in an oil furnace heated house for about a semester. It wasn't terrible considering heating a place with electric or natural gas in that kind of climate (northern UP of MI) is pretty expensive either way.

If you're that short and only being able to just meet the bills, why not stick around home until things improve? You're looking at being able to move out on your own versus being able to save a lot less money. Depends how much either means to you. But personally if I was at this point, I'd definitely not buy a house. Renting a small apartment would be a possibility though.

I've been at home long enough. I really need to move out.

I wouldn't be just skating by on the apartment. I left myself a cushion there.

But I also need to buy furniture, dishes, etc.