Home buying thread

And had you been able to lock in a non-ridiculous interest rate, your payment would be like $1000 less.

Tmac said:

My landlord is raising my rent from $2000/mo to $2300/mo next year. It originally started at $1900/mo. So, morally I can’t stay here.

I can buy a house down the street listed at $240k for potentially $230k. I think it’s worth about $212k, but my payments will be $300 less than they are now and $600 than they’d be next year.

Now that I’m in the market until next May, what do?

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Why do you think it's worth less than what they will sell it for? Or are you thinking that is where the local market will fall back to?

The problem is planning. If you really want to live there for a long time, ultimately it's just a cash flow problem. If the down payment investment and mortgage and maintenance are significantly less than rent or give you sufficient value, it's worth considering.

If you're just looking for a place to live, you have to realize the there's a possibility you'll be under water or at least out a lot of equity. But there's also a chance inflation kicks into overdrive again and prices at least keep where they are even if the economy detonates.

There's so many factors it's hard to say. Some people should and some shouldn't be buying right now. If rates hold and continue to climb, long term, prices will probably slowly come back down but your payment won't really change dramatically.

Tmac said:

My landlord is raising my rent from $2000/mo to $2300/mo next year. It originally started at $1900/mo. So, morally I can’t stay here.

I can buy a house down the street listed at $240k for potentially $230k. I think it’s worth about $212k, but my payments will be $300 less than they are now and $600 than they’d be next year.

Now that I’m in the market until next May, what do?

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Assuming that the experience of renting and buying are equal (and that you're including all of the relevant costs in your monthly estimate, insurance, taxes, deductions, etc.), then regardless of what you think it's worth, you'd be up 3600 this year, 7200 next year... what the next year? 10k? more? Unless you're planning to move very soon or you very strongly think housing values will collapse similarly soon, I struggle to see why you'd be better off renting. If they only reason you're holding out is a perceived <10% price difference, I'd say pull the trigger. If rates drop bigly, you can refinance. If the market collapses, well, you may have timed it badly, but I don't remember my rent getting cut in half the last time the market collapsed.

Of course, renting and owning are very different experiences. If you're happy dealing with the ups and downs of landlords and increasing rent and think you'd be unhappy dealing with maintenance and relative inflexibility (or vice versa), then that might be worth more than the money.

I was in a similar situation last year. Due to quirks of the local market in my area it had been significantly cheaper to rent than own up until ~2021. Despite that it didn't feel like a particularly good deal, we sucked it up and bought this past March. Because really, if not now, when? I don't see the fundamentals of the US housing market changing meaningfully in the next 5-10 years. Better to get into a slightly sub-optimal ownership position now and have my debt inflated out than be in perpetuity at the mercy of landlord escalation and attendant location instability. (It had worked for us before because we were ideal tenants and hadn't seen a rent increase since 2014.) And it becomes a clear win if the Fed turns the money machine back on and interest rates drop.

ToeMissile said:

Pretty good bit of space, what are your plans for it?

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Nice try FBI, are you Lon?

Captain Suave said:

I was in a similar situation last year. Due to quirks of the local market in my area it had been significantly cheaper to rent than own up until ~2021. Despite that it didn't feel like a particularly good deal, we sucked it up and bought this past March. Because really, if not now, when? I don't see the fundamentals of the US housing market changing meaningfully in the next 5-10 years. Better to get into a slightly sub-optimal ownership position now and have my debt inflated out than be in perpetuity at the mercy of landlord escalation and attendant location instability. (It had worked for us before because we were ideal tenants and hadn't seen a rent increase since 2014.) And it becomes a clear win if the Fed turns the money machine back on and interest rates drop.

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I had never seen rates jump in rent like they did during Covid. We went from $1100, to $1360, to $1700, to $2,200 in rent since 2019.

Once rent went from $1700 to 2200, we decided to say fuck it and bought a home. Was it a good decision...no clue. But I'll be damned if I'm going to be at the mercy of the govt and landlords jacking my rate up that much again.

I've seen the economy go up, and go down...and I don't recall a time that anything ever got significantly cheaper. Once the public has been forced to accept certain products or assets at a certain price, they tend to remain there or go up...regardless of the economy.

Even if the housing market crashes, people still have to have a place to live...and I don't foresee rent getting any cheaper.

If people start getting foreclosed on left and right, I still don't think that will put a ton of homes on the market and cause prices to drop like some are projecting. More so I believe that hedge funds and large companies will just buy any houses hitting the market for cash and turn them Into expensive rentals.

I don't ever expect to see a mass amount of homes available again, regardless of the economy.

Tide27 said:

I don't ever expect to see a mass amount of homes available again, regardless of the economy.

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Not unless we have a massive change in zoning laws or some kind of New Deal housing development program. The US population isn't going to stop growing until we're all dead.

Tide27 said:

I had never seen rates jump in rent like they did during Covid. We went from $1100, to $1360, to $1700, to $2,200 in rent since 2019.

Once rent went from $1700 to 2200, we decided to say fuck it and bought a home. Was it a good decision...no clue. But I'll be damned if I'm going to be at the mercy of the govt and landlords jacking my rate up that much again.

I've seen the economy go up, and go down...and I don't recall a time that anything ever got significantly cheaper. Once the public has been forced to accept certain products or assets at a certain price, they tend to remain there or go up...regardless of the economy.

Even if the housing market crashes, people still have to have a place to live...and I don't foresee rent getting any cheaper.

If people start getting foreclosed on left and right, I still don't think that will put a ton of homes on the market and cause prices to drop like some are projecting. More so I believe that hedge funds and large companies will just buy any houses hitting the market for cash and turn them Into expensive rentals.

I don't ever expect to see a mass amount of homes available again, regardless of the economy.

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Don't forget the moratorium's role in all this. While you were getting ass raped by rent increases, because you didn't want to be a deadbeat, there were plenty of people out there saying fuck it, I'm not paying anymore.

And so you shouldered more and more rent hike burdens until it eventually broke you. Part of the reason they kept jumping so high was the government intervention in the market. If I'm a landlord and half my properties have people who stop paying and I can't evict them, I have no choice but to try to salvage it by raising it on the people actually paying. And once I do, the "market rate" increases for every other landlord.

You can really expand this out to all areas of the economy right now. Insurance super fucked? Well yeah, more and more people decided to go without insurance. The people actually paying their premiums now have to make up for those people in addition to their own coverage. Fast food doubled in price? Of course, because the government paid people more than they were making in actual wages to sit at home, and when they got accustomed to that lifestyle, demanded more. See also student loan pauses and now people can't survive if they resume.

Trying to guess the market is a fools errand. When rates hit 5% people said you were crazy to buy. 5% is looking pretty good now. Can you afford the mortgage and upgrades/maintenance to the home, if so, pull the trigger. Even if there is a collapse, you’ll eventually see the home worth more than you paid. It could take a long ass time, but eventually it will be fine.

Tide27 said:

I had never seen rates jump in rent like they did during Covid. We went from $1100, to $1360, to $1700, to $2,200 in rent since 2019.

Once rent went from $1700 to 2200, we decided to say fuck it and bought a home. Was it a good decision...no clue. But I'll be damned if I'm going to be at the mercy of the govt and landlords jacking my rate up that much again.

I've seen the economy go up, and go down...and I don't recall a time that anything ever got significantly cheaper. Once the public has been forced to accept certain products or assets at a certain price, they tend to remain there or go up...regardless of the economy.

Even if the housing market crashes, people still have to have a place to live...and I don't foresee rent getting any cheaper.

If people start getting foreclosed on left and right, I still don't think that will put a ton of homes on the market and cause prices to drop like some are projecting. More so I believe that hedge funds and large companies will just buy any houses hitting the market for cash and turn them Into expensive rentals.

I don't ever expect to see a mass amount of homes available again, regardless of the economy.

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I used to be a small time landlord. I had 5 units total. I saw the mention of rent moratoriums and knew what was going to happen next. Rents would go way up, which they did. In some places, $800 to $2600 in less than a year.

I also knew that moratoriums would flush out all the reasonable landlords...Mom & Pops, to be replaced with investor backed housing who have no qualms about tacking on fees/late charges/application charges on top of maximum allowed rent increases per annum.

I never charged fees or late charges, and I never raised rent one red cent so long as the tenants were in good standing with me. I gave $500 back every December so long as the units were clean and well kept.

And then we all saw the outcome of Muh Livable Wage idiots. They went from 40 hours a week with meager benefits to 32 hours a week with no benefits and having to work two jobs with no day off to be in a worse position than they were in before gummints got all police/socialist state on their asses.

And I do mean their asses. The loudest, laziest fucking people who work at coffee shops and want us to pay for their $129K gender studies degrees and whine because they can't buy houses or get ahead. Fuck it. I bagged over $1MM on their stupid misery and I loved it. You know what I had to do to get it? Fuck all jack and shit. The more these assholes put the screws to the rich, the less their lives are worth at my benefit.

Not once, have I ever, EVER, tried to play the nice guy to people as a land lord or a property manager. Doesnt mean Im a dick to them - Im just not fucking Santa Clause. Rent or Mortgage, thats fucking life - you shouldnt get rewarded for doing the right fucking thing.

Never mind the fact that these people just dont give a shit about you, no matter how well you treat them. My favorite is when a tenant creates a fucking problem and then its you, the land lord, that has a specified amount of time before THEY can take YOU to court. Heres a random situation: After calling around all night and all morning - you finally find an overpriced ass fucking plumber that can go out there that day since sewage is backing up (according to the tenant) and what do they find? The tenant has been flushing their fucking tampons and wipes down the toilet and there are multiple blockages so snaking isnt an immediate fix. It doesnt fucking matter that I can bill it forward to the tenant - its the fact that their stupidity and negligence has cost me my time and sanity which I CANT bill them for.

Never mind the people that just wont get the fuck out when they mentally decide to stop paying rent. Ive fucking got that shit down to a science now, though. By the time the eviction is done - Im walking out of there with a judgement that not only covers all costs and damages, but also accrues interest. Accepted into and taking classes within Liberty's program this year, and you can bet your ass I'm adding a retainer fee onto fucking everything as soon as Im able. I really am hoping that when it comes to real estate, Ill be a regular fuck around and find out kind of guy when all the dust settles.

As for you T Tide27 - if you're even remotely considering the purchase of a house, then you're ready to do so. Dont let a down payment stop you. There are a ton of programs out there to help you get into a home. Then, when you've got some equity - refinance and get out of that program thats costing you a higher monthly payment. A proper inspection will alert you to any major fuck ups, and if you want - you can get a warranty so if the HVAC (example) does fuck up, you're covered. Renting, as nicely as I can say it, is dumb. Unless you're forced to rent via bad credit, no where to buy, low income, whatever - there is literally no benefit to renting. If you decide to up and move the fuck away, a property manager like myself will gladly scoop that shit up and maximize every dollar off it while you wait for it to be sold, or just hang on to it as an investment. Interest rates will rise and fall. House pricing will rise, and... well, rise.