I need a new place
Well, I spent most of last year whining about how I had to get a car. This year's been pretty slow so far, so what better way to get me motivated than to start whining about buying a house?!
Well, not necessarily a house, per se. Probably a townhouse or a condo. I'm not sure yet.
My reasoning for diving into real estate is fairly sound, I think. Paying rent is like tossing money into some dark place where it can't be recovered. Like a black hole. Except I don't think anybody's actually thrown money into one of those before, so I can't really say if the comparison holds. It's kind of dumb. I'm going to be spending some 25-30 years of my life paying off a mortgage anyway. I have money; I might as well get started now. I think I can afford it. I'll be kind of poor for a while, while my income (hopefully) picks up. But I'll have a house (or townhouse or condo) that's mine and all the warm, fuzzy feelings that flow from that.
On top of that, my apartment makes me sick. Headaches... sore throats... I mostly sleep in the living room now, because it's not as bad as in the bedroom (whatever it is). It's very unpleasant. I should probably move.
Sounds good. Of course, there are problems with this idea. First off, I'll have to deal with agents. *sigh*. Second, the housing market is pretty psychotic around here. Not as bad as Toronto or Ottawa, maybe... But if even if I find something I like, I'm more likely than not to find myself in a bidding war. Everybody goes around thinking "Ooh, interest rates are low! What a great time to buy!" Um, no. This is such a seller's market. A half-percent to a percent change in the interest rate won't hurt my ability to make mortgage payments nearly as much as buying a condo that gets bid up $20,000 after the dust clears. I'm worried that this is a bubble market, and prices might not be sustainable. I'm looking at this as an investment, as well as accomadation. You know... buy low, sell high. A low interest rate might cushion the blow a bit, but any way I'm looking at it, I'm going to end up paying nearly twice for housing what I currently pay for rent. And that's not nice.
So I'm mulling all this stuff over. I still think I'm going to stop by open houses soon and get a feel for these creepy "agent" people. So we'll see. I'm much keener on houses than I am on cars, so I don't think I'll whine quite as much. But I'll keep you posted.
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tinkerer
writes:
Twice as much for mortgage as rent? Then that is exactly *why* you shouldn't buy. At least, not right now. Putting that same monthly extra $$ into an interest bearing account will be a much greater investment. And then when the housing market settles a bit (and it will, even if you have to wait a few years, trust me on this), you'll have a very lovely down payment. Then you can afford either more house, or get a lower mortgage payment (having borrowed less capital), or you can make a low down payment and then make substantial extra principal payments from your investments monies (which will save you mortgage interest a few years down the line). If you can afford a shorter term mortgage (say, 15 year or 20 instead of the classic 30), you'll also save megabucks on the total interest paid on your investment. Be smart, Squirrel, and read several books on real estate and mortage arrangements BEFORE finding your dreamhouse. AND...use your handy calculator (ya know, the one you had from high school) and do some figuring for 5, 10 & 15 year projections--total housing costs for buying vs. renting, and expected asset accrual for buying vs. renting & investing in funds or accounts. You'll be surprised by what you'll discover...
Submitted 2002-04-09 22:45:02
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tinkerer
writes:
Oh, yeah, and I forgot to tell you that yes, you should definitely move if your apartment is making you ill. You might check, tho', and see if maybe it is merely dry air that is the culprit. A good quality humidifier is a whole lot cheaper than a house. ;> Oh, and while you're at it, check and find out how much it costs to *sell* a house. After all, one never knows what the future will bring, and what good would it do to buy a house, build up $10,000 of equity, and then discover it will cost $12,000 to pay the selling agents and closing costs?
Submitted 2002-04-09 22:54:08
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flying squirrel
writes:
Yeah, I know. The more I think about it, the less wonderful this idea turns out to be. I've really gotta sit down and figure out the numbers, though. "Double" is probably an exaggeration. But my rent is currently pretty low and I don't have to pay for utilities, property tax, etc. I haven't been able to figure out what sort of mortgage rate I can expect, honestly.
So, I think we've established that more research is needed. :P
Submitted 2002-04-10 12:48:57
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Matt
<mhickson@sympatico.ca> writes:
Hey.
Just sent you an email ... You should get it at one of your accounts (I think it got sent to flyingsquirrel).
Anyhow, good luck with the house thing. It's a big committment, but hey... what else are you gonna do with your money... let it collect and get rich.
Hmm... that may not be a bad idea... I mean, provided whatever is in the apartment doesn't kill you, or put you in a position requiring expensive medical treatment...
That's just wrong, isn't it. 8-)
Take 'er easy.
Submitted 2002-04-12 17:37:17
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