Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Yes my family operates that way: live way below your means.
I never understood why someone would risk so much on something that could take 30 years to pay off. I would be frightened if I was strapped to hoping I had the same income, etc for 30 years, etc. I definitely wouldn't be spending more than I could afford. I guess people have HOPE that they will reach their goals of attaining a higher salary down the road.
I'm confused.
I posted a question similiar to this in the real estate forum..my income is 100,000 but I wanted to purchase a home for 63,000.
All I kept reading were that homes that cheap have major issues like bad plumbing or a new roof.
Did any of you buy that low(whether short sales,etc..)
Did fixing it up end up costing about the same amount as it would have if you bought a decent home outright?
I'm confused.
I posted a question similiar to this in the real estate forum..my income is 100,000 but I wanted to purchase a home for 63,000.
All I kept reading were that homes that cheap have major issues like bad plumbing or a new roof.
Did any of you buy that low(whether short sales,etc..)
Did fixing it up end up costing about the same amount as it would have if you bought a decent home outright?
There are dozens of factors that impact the home values - neighborhood, schools, regional economics, condition of the property, etc. Right now, coming out of a recession, there are a number of homes available at affordable prices that are in good to decent shape.
Before you purchase ANY home, you need to pay for an independent home inspection to identify ALL the problems that affect that property. Once you have a good idea of what the problems are, you can adjust your offer on the property or decide that you do not want the property.
The last house that I purchased immediately needed a new furnace AND a new rood in 2-3 years. I adjusted by offer down $4,000 (and it was accepted). I replaced the furnace immediately which paid for itself in 3-4 years with lower natural gas consumption. The roofs were replaced over the next couple of years.
I hardly consider an older home that needs a repair or two as "not decent." I more than made up the amount I spent for home improvements when I sold the property five years later.
When you diversify, houses and such become less and less of your overall net worth. They are not liquid and not much help in a crisis. It is hard to pull money out.
We bought our house in 1986, a 2 br, 1 ba cosmetic fixer that was the last house to sell for under $200K on our street. We bought it despite its ugly duckling appearance because we loved the neighborhood. The house is in a quiet residential area across the street from a forested park and has forest and ocean views from the deck.
We probably could have qualified for a more expensive house, but we have always believed in living below our means. Because we bought a cheaper house than we could have afforded, we were able to make a 30% down payment, avoid PMI and keep the mortgage payment as low as possible. Interest rates were very high at the time. (We thought we were doing really well to get a loan at 11.5%)
With the money we saved on mortgage payments, we have made improvements to the house over the years. When interest rates went down in 1993, we refinanced to a 15-year loan at 9.5% (still a good deal at the time). Then we started making extra principal payments with the goal of having the house paid off by the time we retired and our incomes went down.
Things didn't exactly work out as we'd planned as we had some eldercare expenses with both our moms, and then my job was eliminated, and I had to take early retirement at 60. But within a couple of years of retirement we made our final house payment and have been debt-free ever since. We didn't have to worry about downsizing either because we were already pre-downsized when we bought such a small house!
Another advantage of buying less house than we could have afforded is that, with California's Prop. 13 tax laws, we got a low tax rate grandfathered in. It was set at one-point-something percent of the sales price and is only allowed to rise a fraction of a percent per year. After 26 years in the house, our yearly property tax is only about $3,000. People gripe about what a terrible place California is to retire in, but our experience has been just the opposite, and the house that we paid $192,000 for is now worth about $700,000.
I'm confused.
I posted a question similiar to this in the real estate forum..my income is 100,000 but I wanted to purchase a home for 63,000. All I kept reading were that homes that cheap have major issues like bad plumbing or a new roof.
Did any of you buy that low(whether short sales,etc..)
Did fixing it up end up costing about the same amount as it would have if you bought a decent home outright?
Definitely not true- it would entirely depend on your local real estate market. DH & I spent closer to 100k on our house but we looked at a lot of houses in the $60k-$70k price range as well. Sure, most of them needed a bit of cosmetic work and possibly a few updates, but for the most part, the repairs would fall somewhere between $5000-$10,000.
The house that we did end up buying, cost us a little under $5000 in repairs- but we knew that going in and negotiated accordingly.
Each market is different though- $63k in one city may get you a perfectly fine house, but a total disaster in another. St. Louis is one of those cheap markets where bargains definitely still exist.
Then I guess we did buy below our means. I believe I got approved for 400k, we paid about $175k.
We were looking for $150k, this house just had so kuch more then a lot of houses we looked at and we likex it also was a 4 bed. We planned 2 kids, so that left us with a spare bedroom for hobbies and lots of visitors. All of our family is out of state.
I thought we stretchex ourselves a little but we have been paying the same amount in rent the last 4-5 years.
Sent from my SPH-L710 using Tapatalk 2
I'm confused.
I posted a question similiar to this in the real estate forum..my income is 100,000 but I wanted to purchase a home for 63,000.
All I kept reading were that homes that cheap have major issues like bad plumbing or a new roof.
Did any of you buy that low(whether short sales,etc..)
Did fixing it up end up costing about the same amount as it would have if you bought a decent home outright?
Is the house a fixer upper? Or in a bad location? 63k is a very small amount of money for a home, but without knowing where it is, the amount is not a great reference.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
