Young people should be buying property

[EboBebo]

Not sure why people think owning property is a bad deal. If you own the place for 5 years you could have over 20% equity assuming a 3% annual increase in home prices.

You could buy a $200k condo for $1241/month with a $295 HOA and insurance included in that figure and actually build equity (I factored 1.2% prop tax, 3.75% rate, and .15% insurance, 25% tax bracket, zero down no PMI but could run $150 a month).

So if You bought, you could have $40k equity in 5 years assuming prices increase at inflation.

In my situation, assuming prices don't crater, a 3% annual increase will leave me with $90k equity in 5 years after factoring 5% agent fee.

There's no way I could SAVE $90k with a $75k a year job in 5 years. Real estate is where it's at. Buy a place that could rent for what you pay in mortgage and you're set. Worse comes to worse and you rent. You have savings so you could survive a month here and there without a tenant. The housing crisis happened because prices well outstripped the price of rent, so the base support wasn't there.

[ScubaStevo]

LMFAO

SO many things the OP isn't considering into the equation.

News flash: there is more to owning a home than just thinking about it as an investment.

[jeffl1980]

Not sure why people think owning property is a bad deal. If you own the place for 5 years you could have over 20% equity assuming a 3% annual increase in home prices.

You could buy a $200k condo for $1241/month with a $295 HOA and insurance included in that figure and actually build equity (I factored 1.2% prop tax, 3.75% rate, and .15% insurance, 25% tax bracket, zero down no PMI but could run $150 a month).

So if You bought, you could have $40k equity in 5 years assuming prices increase at inflation.

In my situation, assuming prices don't crater, a 3% annual increase will leave me with $90k equity in 5 years after factoring 5% agent fee.

There's no way I could SAVE $90k with a $75k a year job in 5 years. Real estate is where it's at. Buy a place that could rent for what you pay in mortgage and you're set. Worse comes to worse and you rent. You have savings so you could survive a month here and there without a tenant. The housing crisis happened because prices well outstripped the price of rent, so the base support wasn't there.

Most youngsters don't make 75K plus a year to afford a house........

[MisterVegas91]

Personally, I couldn't agree more. It's a great investment, and at some point I plan on renting out my condo I currently own.

[Dxohamah]

Younger people should buy homes....but where is that money suppose to come from?

Most young people are already paying a mortgage called Student Loan Debt. This isn't the 1970's anymore.

[Wh1teDyn0mite]

A 2 bedroom house on my chitty council estate costs £290k. Its not happening.

However i could by a farmstead in rural France for 60k euro.

[94beastmode]

lol at A 200 K house. Where do you live in the hood?

[mrc19888]

As a 27 year old who makes 36k a year who owns a rental property I can tell you. This post is ridiculous. Owning property is a mess. Tenants are a mess. Getting phone calls at 2am when a pipe burst is a mess. Having to drop $2800 on a furnace on a random Tuesday because the old one crapped out is a mess. Taxes are a mess. Fixing a property is a mess. Investments properties require with most banks bare minimum 25% down,pristine credit, and operating expenses on your current home and the investment property for 6 months or you won't get approval. Not to mention repairs etc.

Stay away from property until you have a lot more money coming in or you are mentally/physically prepared to work your ass off and have an extremely stressful few months ahead of you.

[earwax]

In on daily thread where a dude in his 30s offers financial advice that doesn't apply to young people anymore

[FeaRaLiS]

It's hard right now to get started, but if you can it's not a bad time dependent upon the areas you're buying in. I bought my house a year and a half ago, the property increased 30-40k across the board so that was nice. It was a foreclosure and I remodeled quite a bit of it, and was on a first time home buyer, etc. The PMI sucked dik, so because of the inflation in values, I had it reappraised, refinanced from a 4.2 to a 3.875 and dropped the PMI. It dropped my payments from 1000 to 750. I can rent it out at 1095, easily. That's enough to cover the mortgage and put 300 away in an account for repairs, vacancy, etc. I'll be looking for another house here very soon.

[FeaRaLiS]

As a 27 year old who makes 36k a year who owns a rental property I can tell you. This post is ridiculous. Owning property is a mess. Tenants are a mess. Getting phone calls at 2am when a pipe burst is a mess. Having to drop $2800 on a furnace on a random Tuesday because the old one crapped out is a mess. Taxes are a mess. Fixing a property is a mess. Investments properties require with most banks bare minimum 25% down,pristine credit, and operating expenses on your current home and the investment property for 6 months or you won't get approval. Not to mention repairs etc.

Stay away from property until you have a lot more money coming in or you are mentally/physically prepared to work your ass off and have an extremely stressful few months ahead of you.

Why not just hire a property manager?

[bigswolelite]

As a 27 year old who makes 36k a year who owns a rental property I can tell you. This post is ridiculous. Owning property is a mess. Tenants are a mess. Getting phone calls at 2am when a pipe burst is a mess. Having to drop $2800 on a furnace on a random Tuesday because the old one crapped out is a mess. Taxes are a mess. Fixing a property is a mess. Investments properties require with most banks bare minimum 25% down,pristine credit, and operating expenses on your current home and the investment property for 6 months or you won't get approval. Not to mention repairs etc.

Stay away from property until you have a lot more money coming in or you are mentally/physically prepared to work your ass off and have an extremely stressful few months ahead of you.

You need something like this man.

https://homewarranty.firstam.com/

Much easier to manage costs. I have one on every house I have ever purchased and it has saved me a ton. New water heater, $75. New A/C compressor, $75. Completely new A/C unit, $75. It's a dream if you are tight on a budget. If I had more money, I would probably self insure but this is piece of mind at an affordable price for anyone. Yes, they cover rental properties as well.

[S13HATCHY]

I pay more in social security than I am able to save.



Advice?

[jeffl1980]

lol at A 200 K house. Where do you live in the hood?

Depending where you live, 200k will by a decent house.

This is a $189K house in Texas, and this is an overpriced area



http://www.zillow.com/homes/for_sale..._zm/?3col=true

[Scoobz121]

We had a good run, but the housing market in the US will likely correct in the next year or two.

A 3 bedroom starter house here in socal will cost you about $450k in a decent neighborhood.

[mrc19888]

I profit like $370 /mo off my property. There isn't extra $ for a manager.

[MisterVegas91]

As a 27 year old who makes 36k a year who owns a rental property I can tell you. This post is ridiculous. Owning property is a mess. Tenants are a mess. Getting phone calls at 2am when a pipe burst is a mess. Having to drop $2800 on a furnace on a random Tuesday because the old one crapped out is a mess. Taxes are a mess. Fixing a property is a mess. Investments properties require with most banks bare minimum 25% down,pristine credit, and operating expenses on your current home and the investment property for 6 months or you won't get approval. Not to mention repairs etc.

Stay away from property until you have a lot more money coming in or you are mentally/physically prepared to work your ass off and have an extremely stressful few months ahead of you.

Yeah it can a be a real nightmare but it will pay off eventually.

[antiwhitekn1ght]

lol at A 200 K house. Where do you live in the hood?

this. 200K in my area would buy you a box.

also most people in their 20s are living paycheck to paycheck.

[FeaRaLiS]

You need something like this man.

https://homewarranty.firstam.com/

Much easier to manage costs. I have one on every house I have ever purchased and it has saved me a ton. New water heater, $75. New A/C compressor, $75. Completely new A/C unit, $75. It's a dream if you are tight on a budget. If I had more money, I would probably self insure but this is piece of mind at an affordable price for anyone. Yes, they cover rental properties as well.

Lmfao. Those are such a fuking scam it's unbelievable.

I profit like $370 /mo off my property. There isn't extra $ for a manager.

Say you have a 1000/month property, that's 100.00 from the 370 leaving you with 270 and the property manager to deal with all the bullchit you mentioned.

[TrueBromance]

You legit couldn't buy anything with 200k where i live

[.aeterna]

lol at A 200 K house. Where do you live in the hood?

you can buy a pretty nice house in a low-crime suburban neighborhood in most parts of the US. Will it be in the most desirable location close to major cities? nope, but you can get an almost brand new house in that price range

[Hemunit]

inb4 tesitifer rent rant




but srs, we bought in 2011. About to sell now, looking to walk away with 100k profit and drop a good portion down on our next home. No PMI, low mortgage payments, we bout to be house rich. Das it mane.

[LesMiscerables]

lol at A 200 K house. Where do you live in the hood?

Median home price in the US is $189k, breh.

[StrongScience62]

Sure I'll just get out of student loan debt while saving money for a 40k down payment while getting raked over the coals on rent. Solid plan OP.

[mrc19888]

Say you have a 1000/month property, that's 100.00 from the 370 leaving you with 270 and the property manager to deal with all the bullchit you mentioned.

So cut my profit by 25% to make my life a little easier? No thanks. I would consider it at maybe 5-10 properties. Not 1.

[mrc19888]

Sure I'll just get out of student loan debt while saving money for a 40k down payment while getting raked over the coals on rent. Solid plan OP.

Also what this guy said. I had 30k cash over 800 FICO, and still almost didn't get approved for a 50k home.

The financial world is completely different than it was even 8 years ago. It's hard as hell to get loans because so many people defaulted.

[FIREnICE]

Median home price in the US is $189k, breh.

that would buy a nice shack here

[RocknRollMuscle]

good luck being a first time homeowner ina big city.

Have fun putting down payment on a $1.3 million starter home.

[GainzMcgee]

you dont buy at the top *******

[CHARBACK]

Horrible advice OP - this only a good idea if you are going to sell in a couple years for a quick profit.

For long term, the lack of mobility and stress/headache as a homeowner is not worth for any person in their 20s. Know from experience.