Wwyd RE BUYING A HOUSE

Posted: Thu, Jun 18 2009, 3:44 am Post subject: wwyd RE BUYING A HOUSE

say rent in your area is like 800 for a two bedroom apartment. And you had the option of buying a duplex renting out half for 750 and living in the other half. Oh and you had the money for a down payment. So the rent of the rented part would pay for the morgatage.

Or u could spend the down payment on a single family house, and then have to pay the morgatage each month.

Or u could rent for $800 but u would have to put someo f your stuff in storage and pay that as well.

Also one spouse is attending college and your income is fairly small but you have absolutly no debt before u purchase the property.

WWYD? Any landlords out there?

Gold Member Joined: Mar 28 2005 Posts: 1069

my dh is very into owning if you can. it's yours, you have equity etc. now that I own- I agree! if you're putting in the same amount of money, it may as well be yours.

I'd say the responsible thing to do is to go for the duplex, so you're mortgage is covered. I would prefer the single house personally, but prob would go with the double.

Posted: Thu, Jun 18 2009, 10:01 am Post subject:

if you can get renters in the duplex go for it ... also consider becoming handy - because owning consists of a lot of work on the property ...

I've had people tell me to leave my house - just because I'm divorced and struggling ... they don't get that it cost the same to rent and the space is tighter in an apt ...
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Posted: Thu, Jun 18 2009, 10:11 am Post subject: re: wwyd RE BUYING A HOUSE

I would totaly buy owning is always urs, and ur not paying someone elses mortgage, also if u need the rental $$ to pay for ur mortgage then go for the duplex, and maybe one day when u will have $$ u can turn it into a one family.
good luck

Posted: Thu, Jun 18 2009, 10:14 am Post subject:

We just got a call from our landlord... when we signed the lease last August he said he and his family were planning on staying in Petach Tikvah for 2 years minimum... maybe even as long as 4 years.

Yesterday he called and said they're moving back when the lease is up, August 17th.

In the meantime my girls had been planning on doing a Kaytana (day camp) in July at the house and we were planning on going to the US for most of August.

Now the Kaytana is canceled and the trip is on hold and I'm trying to find yet another new place.

Had I known our lease would only be for a year I wouldn't have unpacked half of what we did and I certainly wouldn't have planned a vacation...

If we had the money for a down payment, we'd buy a house as soon as we could. I'm so tired of being at the mercy of landlords.
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Gold Member Joined: May 05 2008 Posts: 1970

I say if u have the money to but the house go for it.
why would u wanna pay someone else is morg.?
as for if u she rent it out if u need the space and
u don't need the rent to help u with the morg.
hen go for the house.if u need help to pay morg.
take the tenant.u can always make it in to 1 family house.
good luck!!!!

Posted: Thu, Jun 18 2009, 10:34 am Post subject: Re: wwyd RE BUYING A HOUSE

Platinum Member Joined: Jan 01 2006 Posts: 48159

Banks don't give mortgages based on a maybe rental.

Diamond Member Joined: Nov 14 2007 Posts: 2569

Silver Member Joined: May 05 2008 Posts: 925

You're leaving out a lot of details or failing to consider a lot of things in your post.

1. There are other expenses involved with home ownership besides the mortgage. What about property taxes, utilities, insurance, funds for an emergency, like if your furnace breaks?

2. Do you really know what's involved with being a landlord? It's not as easy as collecting rent. You have to do credit checks on your tenants and make sure they are able to pay. And if they don't pay it's not so easy to get rid of them and find someone else. Any problem they have (like a leaky faucet, a stuck door handle etc. - they all become your problem.

I'd consider finding a 3 bedroom, bigger apartment for now and keep saving. Wait until your schooling is finished and then pursue home ownership.

I'd also be very weary of bankers/mortgage brokers who implore you to buy and insist that you can afford it. I don't know what kind of down payment you have, but if it's a minimum 5%, then that means you still have a big mortgage. Thh whole economic crisis happening now started precisely because people bought what they couldn't afford.

Silver Member Joined: Mar 20 2006 Posts: 964

I don't know if you were just using numbers as an example, or they're real, but it seems pretty unrealistic. Anywhere that you can buy a ouse that leaves you with an $800 mortgage, probably won't bring in that much in rent. Unless you're paying more than 20% down. Or did you mean that renting out the duplex would cover the difference in what you're paying now in rent, to your total mortgage payment.

Also, as Barbara said, keep in mind taxes and insurance and extras. We have tenants, brings in more than $800, and that's just to cover our taxes.

Google mortgage calculator and plug in your numbers, so you get an idea of what it may really cost.

Moderator Joined: Dec 26 2005 Age: 33 Posts: 11430

Posted: Thu, Jun 18 2009, 11:12 am Post subject: re: wwyd RE BUYING A HOUSE

Also if you're counting on rental income to pay part/all of your mortgages, you need to consider the risk of the rental unit sitting empty without a tenant. You'll need to have some buffer funds in case it takes xxmonths to find the new tenant. (That's why you get lower loan-to-value % or higher mortgage cost% for a buy-to-let property).

If you have $ for a downpayment, you know you can invest that into something else more liquid.

On the other hand, you won't have to worry about being evicted by the landlord (assuming you won't fail mortgage payments). If the housing price go up, you won't also worry about "being priced out".

just my 2 cents.

Posted: Thu, Jun 18 2009, 11:20 am Post subject: re: wwyd RE BUYING A HOUSE

OP here

we have 20% we can put down and yes the morgage will be the same as the rent we just then have to pay upkeep taxes insurance etc.. which are costs regardless. Also the property is in tip top shape and when we move when the schooling is done we would probably keep it and rent out the whole thing. My only concern is that with kids the space is a bit tight but at least we'd have storage.

Oh and my tuition is being paid 100% so we wont have to take out loans for that.

Additionally the property has had the same tenant there for over 10yrs and being that she is an elderly lady is unlikely to move now, unless she passes away. Her rent is actually paid by the city so its pretty much guaranteed. In the past yr properties here have gone down about 20% and just now are sales picking up. But its the type of area that we will always have renters I"YH. Rented places are hard to come by here and people dont tend to move around while new ones are always moving in.

I am concerned though ( and would like to hear from other landlords) that while if I had something broken in a single home that I owned I might push it off until it was financially convenient I couldn't do that with a renter. That does worry me though. Like what if she breaks the washing machine and I have to replace it the next day, or call an oven repare person at the drop of a hat.

Platinum Member Joined: Sep 22 2004 Posts: 9754

Who pays your tuition?
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Posted: Thu, Jun 18 2009, 11:25 am Post subject: re: wwyd RE BUYING A HOUSE

a wealthy family member sponsers me as long as I keep up a certain GPA. Its a huge chessed that takes a ton of worries off me. Though tuition isn't all that much. For all my schooling it will amount to $5,000/yr

Silver Member Joined: May 05 2008 Posts: 925

I think if an appliance repair job frightens you and will throw your budgeting off, then you can't afford it.

Also, an elderly lady, though a good type of tenant on the one hand, may become burdensome eventually. I don't mean to be callous - just thinking about it from your point of view. As she gets older, if she has no help, are you going to feel the need to shop for her, pay her bills, run her errands, take her to the doctor? If that's OK with you - great. You're a better person than me.

I'm just reluctant to get into a situation where you become a property manager. It could be great - but the potential down sides scare me.

Posted: Fri, Jun 19 2009, 10:46 am Post subject:

you'd probably have to keep money aside for emergency repairs ... or charge the tenant - if they're at fault ...

house being in good condition and a renter's area - are both positive ...

tight space - maybe moving again - sounds like a pain - but then again can be an easy income added to your later life - renting out 2 apts ...

I really think it sounds doable ...

good luck !!!

Platinum Member Joined: Sep 22 2004 Posts: 9754