What's a good age to be a homeowner? How old were you when you bought your first house?

[BD2003]

Originally posted by: Jzero

Originally posted by: BD2003
Yeesh, renting isnt THAT bad. Thats like saying eating is just crapping all your money away, and getting gas is like burning it up.

The difference is that there is no way to eat or fuel a car and gain equity. Growing your own food requires a lot of land, time, effort and luck. Refining your own fuel is out of the questions for just about everyone on Earth.

You HAVE to live somewhere, and unless you are crashing with someone for free, you will inevitably have to pay to live there. Would you rather pay your own mortgage, or someone else's?

From a financial perspective, there is little argument that renting really does amount to throwing money away.

From non-financial perspectives, there are situations where it might be better to rent, but those situations, similar to leasing a car, are few and far between and they always require sacrificing the larger financial incentive of owning in order to gain some minor convenience benefits.

Selling a house is not as easy as selling a car. Buying a house is only an option when youre willing to settle. I certainly am not willing to settle. It is both a practical and financial decision to pay 500 bucks a month to rent a place with roomates, compared to buying a house that would cost at least 2000 dollars a month, along with maintaining it. For my current situation, buying simply is not an option, although I may not exactly be the target audience. Taking into account the housing market in my area (new york city), I dont see how any 24 year old could possibly be expected to afford any sort of house, even with a wifey.

 

[Ryan]

Buying my first next week at the ripe old age of 19 Will post a thread later

 

[BD2003]

Originally posted by: Epoman
Fvck man most of you people are saying you bought a home at 20-25 years of age. GODDAMN you all must not live in Southern CALIFORNIA! Theres not a house for under $350,000 unless you want to live in a very gang poplulated, Cockroach infested area. At $350,000 a mortgage after P&I and Taxes, Insurance would be $2,000+ A month. I'm 32 and my dream is own a stinking house. I could afford it if I move out to the sticks.

I hear that. One of my friends parents just got offered 400,000 for the biggest dump POS house I have ever seen in my life. The apartment my parents have been renting for 30 years is worth 300,000 as a condo, and its in a dirty, disgusting area.

Where do all you people live that you can afford to buy a HOUSE at 25 and under?

 

[psydancerqt]

i'm getting a house asap... i hope within a year. i'm 22.

 

[phreakah]

Originally posted by: Epoman
Fvck man most of you people are saying you bought a home at 20-25 years of age. GODDAMN you all must not live in Southern CALIFORNIA! Theres not a house for under $350,000 unless you want to live in a very gang poplulated, Cockroach infested area. At $350,000 a mortgage after P&I and Taxes, Insurance would be $2,000+ A month. I'm 32 and my dream is own a stinking house. I could afford it if I move out to the sticks.

I hear ya

 

[Kroze]

bought the single home rancher with 3 bedroom. no basement when i was 20. I'm now 21.

the yard is 3 times bigger than my house. took me 1 1/2 hours to mow it every freaking 2 weeks. PITA.

Buy a house as soon as you can afford it. doesn't matter whether it's a single house or a condo. at least you got something to show after all the payments.

not only that, if you were to sell it, you get all of your money back that you've been paying every months.

 

[Quixfire]

I bought my first house at 19, my second at 21, my third at 24, and continued to buy houses over 15 years until the last couple of years I have been developing apartment complexes.

My first personal home I bought at the age of 32.

 

[Kroze]

Originally posted by: Quixfire
I bought my first house at 19, my second at 21, my third at 24, and continued to buy houses over 15 years until the last couple of years I have been developing apartment complexes.

My first personal home I bought at the age of 32.

could you tell me how are you getting the money to buy these? rich parents? if not, what was your strategy for getting the financial backing?

 

[tranceport]

Bought a house at 21.

 

[Jzero]

Originally posted by: BD2003

Originally posted by: Jzero
From non-financial perspectives, there are situations where it might be better to rent, but those situations, similar to leasing a car, are few and far between and they always require sacrificing the larger financial incentive of owning in order to gain some minor convenience benefits.

Selling a house is not as easy as selling a car. Buying a house is only an option when youre willing to settle. I certainly am not willing to settle. It is both a practical and financial decision to pay 500 bucks a month to rent a place with roomates, compared to buying a house that would cost at least 2000 dollars a month, along with maintaining it. For my current situation, buying simply is not an option, although I may not exactly be the target audience. Taking into account the housing market in my area (new york city), I dont see how any 24 year old could possibly be expected to afford any sort of house, even with a wifey.

Selling it is not the only consideration, but selling a house is probably EASIER than selling a car in many respects.

You only have to stay in a house about 5 years to break even on fees. How long do you plan on staying in NYC?

You say right now you pay $500/month to rent with roommates. Someone somewhere paid or is paying for the space you live in using YOUR money. Why not turn the tables? If you had a $2000/month mortgage payment and got 3 roommates to pay $500/month, you'd be in much the same situation you're in now, except now the renters are paying YOUR mortgage. Live in a condo or a townhome complex that covers exterior maintenance, distribute maintenance costs across your tenants, and the maintenance won't be much either.

If housing prices in NYC are too high for you (they are too high for most everyone) what is the reason you can't move outside the city proper?

 

[BD2003]

Originally posted by: Jzero

Originally posted by: BD2003

Originally posted by: Jzero
From non-financial perspectives, there are situations where it might be better to rent, but those situations, similar to leasing a car, are few and far between and they always require sacrificing the larger financial incentive of owning in order to gain some minor convenience benefits.

Selling a house is not as easy as selling a car. Buying a house is only an option when youre willing to settle. I certainly am not willing to settle. It is both a practical and financial decision to pay 500 bucks a month to rent a place with roomates, compared to buying a house that would cost at least 2000 dollars a month, along with maintaining it. For my current situation, buying simply is not an option, although I may not exactly be the target audience. Taking into account the housing market in my area (new york city), I dont see how any 24 year old could possibly be expected to afford any sort of house, even with a wifey.

Selling it is not the only consideration, but selling a house is probably EASIER than selling a car in many respects.

You only have to stay in a house about 5 years to break even on fees. How long do you plan on staying in NYC?

You say right now you pay $500/month to rent with roommates. Someone somewhere paid or is paying for the space you live in using YOUR money. Why not turn the tables? If you had a $2000/month mortgage payment and got 3 roommates to pay $500/month, you'd be in much the same situation you're in now, except now the renters are paying YOUR mortgage. Live in a condo or a townhome complex that covers exterior maintenance, distribute maintenance costs across your tenants, and the maintenance won't be much either.

If housing prices in NYC are too high for you (they are too high for most everyone) what is the reason you can't move outside the city proper?

I just graduated college a year ago. Everything I know and love is in this city, I have been here my entire life. I am getting ready to move out of the city sooner than later, but right now I do enjoy living with the people that I live. That alone is worth the $500 a month. They might stay here in the long run, but I certainly am not.

There is not a single realtor or house seller in this entire city that would allow me to do what you suggest. They would laugh in my face. Maybe on long island somewhere, but certainly not here.

Its kind of like a catch-22 in stuck in here. If I want to move, I need a car and a job wherever Im moving to. But I cant afford a car where I currently live. And therefore I cant get a job, or even really scout out apts wherever Id move to. And Im not leaving my gf, just to move somewhere else. Maybe in a few years she can come with me, but not right now.

I have considered moving to southern CT, but I dont even know where to begin to find a job there, especially without a car.

 

[Kelemvor]

Originally posted by: minendo
As soon as you can buy one, buy.

That's pretty much right. Owning a home doesn't usually cost that much more than renting but it's HUGe benefit as you actually have something to show for it. We bought our house about 3 months after we were married and were 26. Best decision we ever made.

 

[Trey22]

My ex-wife (thank goodness) and I purchased our first home when I was 22. Too bad she got it in the divorce, lol.

 

[AmphibSailor]

I was 37. I'm in the military and frequently transfer (about 10 times in the last 22 years) so it didn't make much sense for me to buy. I just sold my home in Virginia after about 4 years. No problem getting my money back plus more...

I have just transferred to Seoul, where it will be impossible to buy a home.

I agree with the others and say go for it when you are stable enough and know that you will stay in the area for a few years. Age doesn't matter.

 

[SuperMachoMan]

How is "throwing money away" on rent any different than "throwing money away" on mortgage interest, association fees, insurance, maintenance, and taxes?

In Southern California, it costs roughly $1500 to rent a 2 bedroom apartment. An equivalent condo would cost roughly $400K. The annual interest on a $300K+ mortgage would be roughly $18K a year. Add a another $3K for association fees, $3K for insurance, and $6K for taxes. Then you are paying roughly $2500 a month BEFORE gaining any equity on your home. Even after accounting for tax benefits, that is a significant amount of money saved each month that could be invested in a less inflated asset class. Not to mention the opportunity cost of tying up the ~$100K necessary for a down payment. From a cashflow perspective, it often makes sense to rent rather than own.

Of course everyone is going to have positive things about homeowning following such a tremendous bull market in housing. It is dangerous advice though in this market when very few young people in Southern California make the $100K+ salaries necessary to responsibly purchase a home.

 

[imported_Tomato]

Originally posted by: SuperMachoMan
How is "throwing money away" on rent any different than "throwing money away" on mortgage interest, association fees, insurance, maintenance, and taxes?

In Southern California, it costs roughly $1500 to rent a 2 bedroom apartment. An equivalent condo would cost roughly $400K. The annual interest on a $300K+ mortgage would be roughly $18K a year. Add a another $3K for association fees, $3K for insurance, and $6K for taxes. Then you are paying roughly $2500 a month BEFORE gaining any equity on your home. Even after accounting for tax benefits, that is a significant amount of money saved each month that could be invested in a less inflated asset class. Not to mention the opportunity cost of tying up the ~$100K necessary for a down payment. From a cashflow perspective, it often makes sense to rent rather than own.

Of course everyone is going to have positive things about homeowning following such a tremendous bull market in housing. It is dangerous advice though in this market when very few young people in Southern California make the $100K+ salaries necessary to responsibly purchase a home.

Well-written and all too true. For those who bought a home when they were 18-28, what were your yearly incomes (combined if you purchased it with a spouse). Right now I'm making about $32k/year and my fiance is in grad school, there's no way we're even close to buying a home anytime soon. Especially living in Southern California. I wonder if the real estate in Atlanta is cheaper...

 

[cHeeZeFacTory]

Yea I live in So Cal and buying a house coming right out of college is pretty tough. A descent house (not central LA, compton, etc) will cost > $500k. As SuperMachoMan said, you really do need a stable ~$100k total income to get a nice house in So Cal. If you live in like Washington state or something that will be a different story, you can probably buy a farm sized piece of land for <$250k.

 

I'm so sick of you southern california whiners.

 

[SuperMachoMan]

Originally posted by: Tomato

Well-written and all too true. For those who bought a home when they were 18-28, what were your yearly incomes (combined if you purchased it with a spouse). Right now I'm making about $32k/year and my fiance is in grad school, there's no way we're even close to buying a home anytime soon. Especially living in Southern California. I wonder if the real estate in Atlanta is cheaper...

I make $75K/year in Southern California and don't anticipate ever being able to afford a family sized home ($500K+) in Southern California if things keep up. I do believe that Southern California real estate prices are unsustainable at their current levels and am hoarding cash in the event of a correction. Otherwise I am prepared to move to Nevada or Oregon when I am ready to settle down.

 

[Mill]

Originally posted by: SuperMachoMan
How is "throwing money away" on rent any different than "throwing money away" on mortgage interest, association fees, insurance, maintenance, and taxes?

In Southern California, it costs roughly $1500 to rent a 2 bedroom apartment. An equivalent condo would cost roughly $400K. The annual interest on a $300K+ mortgage would be roughly $18K a year. Add a another $3K for association fees, $3K for insurance, and $6K for taxes. Then you are paying roughly $2500 a month BEFORE gaining any equity on your home. Even after accounting for tax benefits, that is a significant amount of money saved each month that could be invested in a less inflated asset class. Not to mention the opportunity cost of tying up the ~$100K necessary for a down payment. From a cashflow perspective, it often makes sense to rent rather than own.

Of course everyone is going to have positive things about homeowning following such a tremendous bull market in housing. It is dangerous advice though in this market when very few young people in Southern California make the $100K+ salaries necessary to responsibly purchase a home.

Because most of us here don't live in the super-inflated market of Southern California. Secondly, the tax savings from mortgage interest is VERY nice. I don't have an association fees, my insurance is not high, and neither are my property taxes. My Property taxes+insurance are less than 1500 a year. California is a market that is inflated and unreasonable for most people. From a cash flow perspective it might make sense, but not from an asset management or investment perspective. You are throwing away money no matter how you might try to rationalize it. Having the extra cash doesn't help that much, because it is very likely it will be spend and not saved. Buying a home is a good investment and helps build your networth.

Tomato - Atlanta, especially the suburbs and any urban "renewal area" are cheaper than Southern California. However, there are some very expensive parts of Atlanta, and Atlanta is still not as cheap as some of the other Southern states or the Midwest.

 

[dullard]

Originally posted by: SuperMachoMan
How is "throwing money away" on rent any different than "throwing money away" on mortgage interest, association fees, insurance, maintenance, and taxes?

In Southern California, it costs roughly $1500 to rent a 2 bedroom apartment. An equivalent condo would cost roughly $400K. The annual interest on a $300K+ mortgage would be roughly $18K a year. Add a another $3K for association fees, $3K for insurance, and $6K for taxes. Then you are paying roughly $2500 a month BEFORE gaining any equity on your home. Even after accounting for tax benefits, that is a significant amount of money saved each month that could be invested in a less inflated asset class. Not to mention the opportunity cost of tying up the ~$100K necessary for a down payment. From a cashflow perspective, it often makes sense to rent rather than own.

It all depends on the area you choose to live in.
1) Some places that condo you describe is $80k, some places it is $400k.
2) Association fees (if applicible) vary widely. I just bought my house and when I was looking 95% of houses had no association fees and those that did were ~$100-$300 annually. $3k may association fees may exist where you live, but that certainly isn't true in most places.
3) $3k is high for insurance. That $400k condo would insure for ~$1200 in areas where earthquakes don't cause lots of damage.

Lets do the same numbers in another area of the country. A typical 800 sq ft apartment in Nebraska is $600 a month in good condition. A typical 2000 sq ft house here is $175K in good condition. Interest + insurance + tax + association fees is $800 a month on that house (then of course $200 a month in principle which you are essentially paying yourself). So for $200 a month more you get 3-3.5 times the living space (remember that 2000 sq ft doesn't include fully finished basements). That doesn't even include tax benefits. After tax, or if you get a slightly smaller house, it costs the same or less per month to buy than it does to rent.

Over time, that $600 a month in interest and $200 a month in principle, those numbers start changing. The interest drops to zero and the principle increases toward $800. Thus if you were even at the beginning, after 10 years you are much better off with a house.

Of course this assumes the house price doesn't decrease (which after inflation DID occur in many locations in the late 80s).

 

[Dacalo]

Bought my first at 22, second, third, and fourth at 23, and working at my 5th right now at 24.

It's all about timing and exploiting the market.

 

[imported_Tomato]

Originally posted by: Mill

Originally posted by: SuperMachoMan
How is "throwing money away" on rent any different than "throwing money away" on mortgage interest, association fees, insurance, maintenance, and taxes?

In Southern California, it costs roughly $1500 to rent a 2 bedroom apartment. An equivalent condo would cost roughly $400K. The annual interest on a $300K+ mortgage would be roughly $18K a year. Add a another $3K for association fees, $3K for insurance, and $6K for taxes. Then you are paying roughly $2500 a month BEFORE gaining any equity on your home. Even after accounting for tax benefits, that is a significant amount of money saved each month that could be invested in a less inflated asset class. Not to mention the opportunity cost of tying up the ~$100K necessary for a down payment. From a cashflow perspective, it often makes sense to rent rather than own.

Of course everyone is going to have positive things about homeowning following such a tremendous bull market in housing. It is dangerous advice though in this market when very few young people in Southern California make the $100K+ salaries necessary to responsibly purchase a home.

Because most of us here don't live in the super-inflated market of Southern California. Secondly, the tax savings from mortgage interest is VERY nice. I don't have an association fees, my insurance is not high, and neither are my property taxes. My Property taxes+insurance are less than 1500 a year. California is a market that is inflated and unreasonable for most people. From a cash flow perspective it might make sense, but not from an asset management or investment perspective. You are throwing away money no matter how you might try to rationalize it. Having the extra cash doesn't help that much, because it is very likely it will be spend and not saved. Buying a home is a good investment and helps build your networth.

Tomato - Atlanta, especially the suburbs and any urban "renewal area" are cheaper than Southern California. However, there are some very expensive parts of Atlanta, and Atlanta is still not as cheap as some of the other Southern states or the Midwest.

Thanks for the helpful post, Mill. Atlanta isn't set in stone yet (it'll be a few more years before I can even leave SoCal), but it seemed like a really nice place to live. More research will definitely follow as time draws nearer.

 

[SuperMachoMan]

Originally posted by: Mill

Because most of us here don't live in the super-inflated market of Southern California. Secondly, the tax savings from mortgage interest is VERY nice. I don't have an association fees, my insurance is not high, and neither are my property taxes. My Property taxes+insurance are less than 1500 a year. California is a market that is inflated and unreasonable for most people. From a cash flow perspective it might make sense, but not from an asset management or investment perspective. You are throwing away money no matter how you might try to rationalize it. Having the extra cash doesn't help that much, because it is very likely it will be spend and not saved. Buying a home is a good investment and helps build your networth.

Tomato - Atlanta, especially the suburbs and any urban "renewal area" are cheaper than Southern California. However, there are some very expensive parts of Atlanta, and Atlanta is still not as cheap as some of the other Southern states or the Midwest.

I won't argue the fact that purchasing a home has traditionally been a sound financial decision. But for people living in an inflated housing market like myself and Tomato, I believe it makes more financial sense to rent rather than own due to the facts:

1) You save a significant amount of money monthly that can be used to invest in better performing financial instruments.
2) I believe that housing prices will decline significantly in the next few years as they did in the early 90's
3) It would be financially irresponsible to leverage myself into such a huge purchase while making only $75K a year.

 

[NumbersGuy]

Originally posted by: minendo
As soon as you can buy one, buy.

26, doubled my money on sale.

After taxes and with equity building up you'll be way ahead of renting, as well as the great feeling of ownership. Nowadays you can buy with a minimum down payment and lock in low rates.

Due to the big "D" I had to rent, then bought another house. After taxes I pay less than the rental, have about triple the space. Doubled the money again.

Buy - an investment, not an expense.