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Bought a modest house in the San Francisco Bay area for $315k 8 years ago. Could have bought a house twice as expensive that was bigger or in a better neighbor but didn't want to spend 45% of my pre-tax income on a house. My piti mortgage payment is $1465 less that half that of comparable rents.
Trying to do this at the moment. Boy would it help our finances.
Bought a home way above our means only because it was the least expensive, or close, in the town.
Mainly because my husbands breathing issues were sooo bad I was scared. So it felt like life or death to get above in elevation yet as close to our jobs as possible. Now we are seeking a fixer upper then will sell this house. I will miss our nice house but am looking forward to it
We bought our house for $389k when we would have qualified for $500k+. On top of that, the main reason we bought the house was because it was centrally located (less driving costs and good for my wife who runs a business from home and has clients visit often), and no HOA, which saves us some money itself but also allowed us to build a separate studio in our backyard where my wife runs her business. She was paying rent for a separate space each month, about $400/mo. It costs us about $13k to build the studio she works out of so not only will that costs be made up in about 3 years, but it also adds to the value of our home when we eventually do sell.
I'll add this, we bought a 1,000sq/ft home in a nice upper scale suburb of Milwaukee, Bought at 200K, just got appraised for 252K. Not bad for only being in the house 4 years. Buy a fixer upper or smaller home in a nice location and watch your equity grow. My property taxes are $2,600 and that's unheard of in the Milwaukee area, most are 4-8K a year.
I'll add this, we bought a 1,000sq/ft home in a nice upper scale suburb of Milwaukee, Bought at 200K, just got appraised for 252K. Not bad for only being in the house 4 years. Buy a fixer upper or smaller home in a nice location and watch your equity grow. My property taxes are $2,600 and that's unheard of in the Milwaukee area, most are 4-8K a year.
Wow Milwaukee is catching up fast to the NY metro area. Yikes
We bought our present house after looking in the neighborhood right behind us. We were set on a beautiful home, began the buying process and were ready to buy when the deal suddenly fell through. The next Saturday morning I took a ride down the street and found our present neighborhood and house- for a hundred thousand less. This house is older, smaller, and less grand but it checked off a number of items on our list and the yard is significantly better. We also save about 2k per year on taxes vs the other house.
All of the above being said, I still think if you are going to spend money on something it may as well be your home and property. I still sometimes think wistfully of that house down the street and what might have been.
We have never purchased a hone that is more than 150% of our gross income. That was possible as we made the decision NOT to pursue positions in very expensive areas where we were offered positions - Toronto, New York, DC, Boston, and SoCal.
After age 40, we started to downsize from 3000 sq ft to 1500 to our current place of 975 sq ft. Even when we had a large home, re rarely used more than 1000 sq ft.
Since I am a cash buyer, I read that people should not spend more than 1/5 of your net work on a home. So I plan putting down that amount and borrow the rest. With that said, I love this thread because I would get a big home and it's only me. I'm thinking of a one bedroom condo or townhome.
We bought our present house after looking in the neighborhood right behind us. We were set on a beautiful home, began the buying process and were ready to buy when the deal suddenly fell through. The next Saturday morning I took a ride down the street and found our present neighborhood and house- for a hundred thousand less. This house is older, smaller, and less grand but it checked off a number of items on our list and the yard is significantly better. We also save about 2k per year on taxes vs the other house.
All of the above being said, I still think if you are going to spend money on something it may as well be your home and property. I still sometimes think wistfully of that house down the street and what might have been.
Funny, I think if you're going to spend money it ought to be on everything but a house. Look at the way Warren Buffett lives. Same (relatively) modest house since 1957.
I think if you're going to spend money it ought to be on everything but a house.
I prefer to use the term "housing" and to include the utilities
and any other expense you're obliged to pay in order to live there. All of it.
Quote:
Look at the way Warren Buffett lives. Same (relatively) modest house since 1957.
The Q is how much of Warrens NET income that mortgage (and other bills) required.
Even if it was a bit high in year #1... by year #10 it c/should be within even my rigid standards.
The only problem is that wage restriction currently makes that hard to justify expecting it.
As to "living below our means" ...
Keep your housing cost low enough vs your NET (after the save/invest accounts and payroll taxes)...
and you just might have enough spendy money to also afford that "everything but" assortment too.
Well, a lot of it.
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