View Full Version : How can I show prospective landlords that I'm not going to destroy their home?
Eurodriver
01-14-14, 08:18
I've been looking at a new place to rent. I've lived in the same home for almost 2 years and recently had to increase my commute by literally 40 miles so I have to move somewhere closer. Renting kills me because I could afford a much nicer home for less money via a mortgage but no one will give me one due to my income (GI Bill, part time work, etc) I've also sworn off apartment complexes as I lived in a Marine Corps barracks for 4 years (Anyone familiar with Mackey Hall?) and after many nights of loud drunken parties and people vandalizing cars "because they were bored" I've sworn never again will I live somewhere without a garage and at least 25 yards separating me from everyone else.
So that leaves me with renting single family homes. Most of the homes around here are owned by individuals who then hire a firm to deal with rentals and payments.
The problem I see is twofold:
Even though I have a great reference (my current landlord loves me and is going to be heartbroken when I leave) landlords seem to see "young guy with a big dog" and I guess that means trouble. I can't even get them to call my landlord for a reference because they "know" my type and won't even touch me.
The other problem is the landlords who seem to prefer section 8 renters, which absolutely blows my mind.
For example, a few weeks ago I went to a house to see it and there were 3 other families there...and me. Two were hispanic and each had 3+ kids (hard to keep track of them all) ages 1-10. The other family was white trash and reeked of cigarettes (This was a no-smoking home). It was a great home in a great neighborhood. I'm sitting there in khakis, nice shoes, shirt, tie, pulled up in my nice clean Mercedes, and I'm thinking this is all but mine. Kids? Cigarettes? Who wants to deal with all that? I remember when I was ten I was drawing on everything and my carpet was trashed daily.
The showing agent asked me if I was single, I said yes, and then she said "Oh, your voucher won't cover this home." I asked her what she meant and she said "Your Section 8 voucher, you won't qualify for a 2 bedroom." When I told her that I'd be paying cash she said "The landlord prefers Section 8 because cash renters never seem to pay on time." I told her that I've paid my rent several weeks early every single month for 2 years (this is no exaggeration) and she could call my landlord she said that she "had heard that before".
It's irritating. I feel like I have to "sell" myself to a landlord and I know for a fact I'm going to leave the house the same exact way I got it, pay on time every time, and yet they're willing to rent it out to a big ass family (how do 5+ people sleep in a 2 bedroom? ) who will trash it just because the landlords get a guaranteed deposit every month.
I'm a landlord that rents out a single family home. There is two things that are important to me.
1. That my property will be well taken care of.
2. That my monthly check arrives on time.
Potential renters have to show me that they are financially responsible & make enough to afford the rent and also that they are good, all around decent people. I also look for candidates to be dressed nice, show maturity, have a stable job and carry themselves well. I also feel them out to see how "handy" they are. If it comes down to two people, all other things being equal but one person appears needy, they're out. I'm not coming over to change lightbulbs or plunge your toilet. I'll take care of legitimate issues but I'd rather not deal with petty whining. So far though, it has never came down to that.
You mention showing up in your Mercedes. Don't always think of that as a good thing. Honestly, my first impression would either be that you deal drugs or that you blow your money on material things when you should be more financially responsible. (Not saying either is true in your case) If the info on the rental application verifies that you have a well paying job, then it's a non issue... although I'd still wonder why you drive the vehicle that you do but not own your own home. First impressions are important but also important is the info on the application. It should support your appearance, so to speak.
I've also had some pretty crazy applicants wanting to barter for the rent. That pretty much insures that their application gets 86'd. I don't want to trade your car, tv, furniture or services for rent.
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Eurodriver
01-14-14, 09:54
I'm a landlord that rents out a single family home. There is two things that are important to me.
1. That my property will be well taken care of.
2. That my monthly check arrives on time.
Potential renters have to show me that they are financially responsible & make enough to afford the rent and also that they are good, all around decent people. I also look for candidates to be dressed nice, show maturity, have a stable job and carry themselves well. I also feel them out to see how "handy" they are. If it comes down to two people, all other things being equal but one person appears needy, they're out. I'm not coming over to change lightbulbs or plunge your toilet. I'll take care of legitimate issues but I'd rather not deal with petty whining. So far though, it has never came down to that.
You mention showing up in your Mercedes. Don't always think of that as a good thing. Honestly, my first impression would either be that you deal drugs or that you blow your money on material things when you should be more financially responsible. (Not saying either is true in your case) If the info on the rental application verifies that you have a well paying job, then it's a non issue... although I'd still wonder why you drive the vehicle that you do but not own your own home. First impressions are important but also important is the info on the application. It should support your appearance, so to speak.
I've also had some pretty crazy applicants wanting to barter for the rent. That pretty much insures that their application gets 86'd. I don't want to trade your car, tv, furniture or services for rent.
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Thanks for the input, and I didn't mean to really emphasize the Mercedes part as much as the "nice, clean" part. Mainly, wouldn't a potential renter that has 6 year old McDonalds french fries on their dashboard be a red flag?
You make a lot of good points, but none of them seem to be applied by landlords in this area. Who would prefer section 8 renters in a nice home? I could understand it in the hood where the Section 8 payment is greater than the rent you'd get otherwise, or some crappy block construction home with terrazo flooring that no one could destroy. But a nice home in a good neighborhood and you're throwing section 8 renters in? I'd be pissed if I was a neighbor or a co-investor.
I work for a realty office and the broker rents homes. He also only rents to Section 8 renters and then complains when they trash the homes or get arrested and lose their vouchers. It just doesn't make any sense.
I work for a realty office and the broker rents homes. He also only rents to Section 8 renters and then complains when they trash the homes or get arrested and lose their jobs. It just doesn't make any sense.
There's your problem right there..... also do you mean you "for" or "with"? Either way though, I assume you live in a town that has more than one Realtor that manages rental property. Some Realtors develop a niche market... they seldom come out of the mold they build. They might bitch about it for 30+ years. Don't plan on changing their minds.
Property owners want money on time, and the property maintained..... well and a long term tenant with an escalation clause lease. although most will forgo the third item for the first two.
Yeah, geographically, we're very far apart. Things could be very different down by you. I also don't know anything about Section 8 renters (or what that even means). Our rental is a nice home located in a good neighborhood. We actually price it somewhat high just to try and weed out some of the riff-raff. Why any landlord would want a section 8 renter is beyond me. I assume it would come down to the money?? Knowing my property is being well cared for is just as important to me as the rent check. I don't want the hassle of a "bad renter" even if the money is guaranteed.
My guess is that if a "less than ideal renter" got the property before you, the landlord saw something that raised a red flag.
I'd rent our home to you in a heartbeat but that would require you to own a Packer's jersey & a snow shovel. :p
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Change the demographic of from whom it is you'd be renting? Military By Owner might be worth a shot.
http://www.militarybyowner.com/
Landlords would likely be less sketchy in general, and more likely to recognize your background for what it is, presuming it nets you any availabliities you'd be willing to check out.
Section 8 is a preference in many places because they know those people won't be cut off the govt tit or lose their job which means guaranteed income.
As a landlord, cash is king. Most landlords want to see your pay stubs for the past month and w2 information. This will show your income, which is the most important part of the equation.
Stay away from section 8 areas. I rented to section 8 renters once, never again. The direct deposit check is not worth it. Those people are pigs.
Maybe print up a copy of your free credit report. This could also help your case.
Stay away from section 8 areas.
There is no such thing as a Section 8 "area" any more. Section 8 renters simply are given a housing allowance (which can be as high as $2,200 a month) and they can rent any place they want to, even next door to you.
I know doctors and lawyers who ended up living next door to Section 8 "renters."
I will try to post more later. But have you asked any lenders about a VA loan?
I will try to post more later. But have you asked any lenders about a VA loan?
I don't think the VA counts the GI Bill as earned income for a home loan.
Section 8 renters simply are given a housing allowance (which can be as high as $2,200 a month) and they can rent any place they want to, even next door to you.$2.200 per month is more than twice what my mortgage payment is. That pretty much makes me sick!
$2.200 per month is more than twice what my mortgage payment is. That pretty much makes me sick!
Join the club. I know section 8 families living in houses I couldn't begin to afford to live in. Of course I didn't decide to have 6 or more kids without being married and no real job prospects so I'm not entitled to live in such nice neighborhoods.
Crow Hunter
01-15-14, 07:18
$2.200 per month is more than twice what my mortgage payment is. That pretty much makes me sick!
It is 4.7 time mine....
It is 1.7 times more than my mortgage AND the payment on my 70 acre farm combined....
I am doing it wrong apparently.:suicide:
Join the club. I know section 8 families living in houses I couldn't begin to afford to live in. Of course I didn't decide to have 6 or more kids without being married and no real job prospects so I'm not entitled to live in such nice neighborhoods.
More social engineering. Wouldn't want the leeches and shitbags of society to feel bad that you live in a nicer neighborhood?
Meanwhile, the rest of us work our asses off, working 80+ hour weeks, to put our families into nice neighborhoods with good schools whilst the scum of society get to leapfrog into a home that it took the rest of us decades of ass busting to afford. Cuz anything else would be unfair, right?
It's no wonder class warfare is alive and well.
Euro, I would exhaust every option, including the recommendation to seek VA assistance in buying a home. Real estate appreciates in value quickly, as long as you're not in a unique area of depressed economy or some such. You can start with a lesser home and save/fix it up a bit and flip it in a few years for a decent profit to put toward what you really want.
Every year you rent is money just pissed down a drain.
Apricotshot
01-15-14, 08:45
Hey Euro where are you looking to live?
Every year you rent is money just pissed down a drain.
Hey, don't discourage people. It's not money pissed down the drain. It's pissed into my back pocket. The rent we get for our 2nd house is double that of the mortgage for the house we live in. After we retire, that rental will be liquidated into our summer vacation home. Nothing is being wasted here. ;)
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Hey, don't discourage people. It's not money pissed down the drain. It's pissed into my back pocket. The rent we get for our 2nd house is double that of the mortgage for the house we live in. After we retire, that rental will be liquidated into our summer vacation home. Nothing is being wasted here. ;)
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Lol, my bad.
I retract my statements and advice with Ryno's retirement in mind. Renting is awesome and everyone should do it.
Especially if the .Gov sugar daddy will pay the tab.
Lol, my bad.
I retract my statements and advice with Ryno's retirement in mind. Renting is awesome and everyone should do it.
Especially if the .Gov sugar daddy will pay the tab.
That's better, thanks bud. You don't have to retract the part about the government though. That part I agree is BS. I only want people to fund my retirement if it's their own hard earned money, not the Gov's. :)
In all seriousness though, you're right. A little handy work goes a long way. Buy a fixer upper, dump some sweat & a little cash into it & start building equity.
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Op, it seems you have a couple of choices. Continue living somewhere you are not completely satisfied with while seeking a degree in a field that will pay the mortgage on a home you are content with (I've watched several people do it). Seek a woman who has a decent income and the two of you can then afford a mortgage together for a home you really like. Both of these suggestions can and do work if you put in the effort.
BrigandTwoFour
01-15-14, 09:43
Every year you rent is money just pissed down a drain.
In principle, I agree. But realize that everyone has a different story. I'm AD Air Force, I bought a home at my last base thinking exactly what you just said. When I turned around and had to sell it five years later, the value had decreased 20%. I ended up selling it for pretty much exactly what I bought it for and took a loss on the $30k I put into the place. When all was said and done, I had to write a $5k check to the bank to cover paying off the mortgage and paying the realtor fees.
For obvious reasons, this kinda soured me against buying and selling homes every few years as I PCS around the country. In the mean time, my wife and I rent below our means and save for the future. Everyone's situation is different.
Everyone's situation is different.
Very true. I've talked to many people that simply don't want the headache that comes along with owning your own home. They don't want to deal with maintenance, banks/mortgage, taxes, etc. They can up & go as they please (within the lease agreement of course). It's worth it to them to just pay the extra cash to rent. Foolish for many of us but with certain people it works.
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Very true. I've talked to many people that simply don't want the headache that comes along with owning your own home. They don't want to deal with maintenance, banks/mortgage, taxes, etc. They can up & go as they please (within the lease agreement of course). It's worth it to them to just pay the extra cash to rent. Foolish for many of us but with certain people it works.
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My brother is like that. He purchased his first house at 21 or 22 and has bought and sold three houses in the last ten years. When my SIL got a new job and they moved across state I asked him if he was getting another house. His response was, "Hell no! I'll just rent and not have to fix stuff myself anymore!"
the headache that comes along with owning your own home.
This is a deceptively benign description. :D
Buying a home, alone = Enduring the interrogation portion of the SERE curriculum with three broken lightbulbs lodged on your colon, conducted by realtors, mortgage-hawkers, insurance underwriters and lawyers who make car salesmen look philanthropic.
I wanted to kick a kitten through a fan.
Eurodriver
01-15-14, 11:35
I'm speaking with a mortgage lady right now. I guess you don't need that much income to buy a home. At least not as much as I thought (I was thinking $7,000+ pre tax)
It just doesn't make sense to pay $1300/mo rent for a 2/1 when I can pay a $800/mo mortgage for a 3/2.(in my area anyway)
Sorry landlords.
This is a deceptively benign description. :D
Buying a home, alone = Enduring the interrogation portion of the SERE curriculum with three broken lightbulbs lodged on your colon, conducted by realtors, mortgage-hawkers, insurance underwriters and lawyers who make car salesmen look philanthropic.
I wanted to kick a kitten through a fan.
Completely agree, buying a house is the most miserable experience ever, but by doing so early in life, I've been able to turn that equity a few times and afford a far nicer home than I otherwise could have. It worked for me, that's all.
Home improvement sucks big time. I'm living the nightmare of remodeling right now. :)
Eurodriver
01-15-14, 11:38
Completely agree, buying a house is the most miserable experience ever, but by doing so early in life, I've been able to turn that equity a few times and afford a far nicer home than I otherwise could have. It worked for me, that's all.
Home improvement sucks big time. I'm living the nightmare of remodeling right now. :)
Would you guys like to give some tips?
This is a deceptively benign description. :D
Buying a home, alone = Enduring the interrogation portion of the SERE curriculum with three broken lightbulbs lodged on your colon, conducted by realtors, mortgage-hawkers, insurance underwriters and lawyers who make car salesmen look philanthropic.
I wanted to kick a kitten through a fan.
...and that's just the first ten minutes of the hour long autograph session.
It's never ending. I'm in the process of adding an addition to my house. The corner we're adding on to is 12 inches beyond a setback from a river. I'm talking roughly a 12"x15" triangle of house is over the line. The county's Grand Poobah of Navigable Waterways is acting like I'm about to slaughter a herd baby unicorns. Not to mention, after Katrina, FEMA decided (from a cubicle 1200 miles away) that I was NOW in a flood zone. That cost me few grand to get that reversed.
Don't even ask Pork Chop about how his weekend went with his bathroom shitter. ;)
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Would you guys like to give some tips?
In my town, housing prices have done nothing but climb. We've been sheltered from the economies ups and downs, for the most part.
Every 5 years, or so, there's been an increase of about 10-15% value. So, you buy a home you can afford to put time, sweat and some money into and in 5 years or so, you can hope to get back the 10%+ of natural appreciation plus the increase in value of whatever improvements you've made. Our last home (sold it in December) we bought new in a developing neighborhood in 2006. Made some improvements, established yard and landscaping, etc. along with the natural value of the rest of the area becoming developed and 7 years later, we sold it for a $50,000+ profit. We spent maybe $10,000 on the improvements themselves and did all the work on our own.
That's quite a return on investment, but I realize it's not going to happen everywhere. I may or may not get that lucky on the house I just bought, but either way, I've moved twice in 12 years, greatly increasing square footage and property size and my payment actually goes down each time.
If real estate is volatile where you live, this method may not pan out for you. Either way, I think you're wise to buy, unless relocating is in your near future.
Don't even ask Pork Chop about how his weekend went with his bathroom shitter. ;)
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Should I tell him? I hate to scare him off from being a new homeowner...........
:)
Crow Hunter
01-15-14, 12:33
I'm speaking with a mortgage lady right now. I guess you don't need that much income to buy a home. At least not as much as I thought (I was thinking $7,000+ pre tax)
It just doesn't make sense to pay $1300/mo rent for a 2/1 when I can pay a $800/mo mortgage for a 3/2.(in my area anyway)
Sorry landlords.
Make 1000% sure that you want to and expect to live in the area for a minimum of 5 years, maybe even longer in Florida.
It may take you that long to just get back to what you paid for the home if there is an economic hiccup. Even just a local hiccup of a plant closing.
While some people can make lots of money at it, I even made something like $40k when I sold my first house. It isn't a given. If I tried to sell the house that I have right now, I would feel lucky if I broke even. If I had tried to sell a couple of years after I bought it in the middle of the financial crisis AND the local Goodyear plant and several other plants closing. I would proabably have lost my shirt and maybe even my pants. I actually found a house that I wanted much more than the one we have now but my house appraised at nearly $30k less than what I paid for it.:mad: So I didn't bother trying to sell it because I didn't want to take the hit.
From what I understand, Florida has a fairly volatile housing market and you might be buying in a peak rather than a valley. I have a very close friend that moved down to Boca Raton and bought a house in 2007-8 time frame. He moved back up here and is still paying for it because he still can't sell it for what he has in it.
That doesn't even count having a problem like Steyr with Section 8 people moving in next door to you and driving your property value down while driving you nuts...
Eurodriver
01-15-14, 12:37
You guys are not making this sound very appealing.
Maybe I should buy some farmland , build a cottage and commute 100+ miles daily to avoid this
Oh, and use an outhouse.
Remember, it isn't just a mortgage payment that you can afford. It is also RE taxes, insurance, utilites, improvements and maintence. Gotta consider it all.
Eurodriver
01-15-14, 12:56
Remember, it isn't just a mortgage payment that you can afford. It is also RE taxes, insurance, utilites, improvements and maintence. Gotta consider it all.
Renting you pay all utilities anyway. It'd just be taxes and insurance added on. Taxes around here for the home value I'm looking for are $1800/yr and insurance is maybe $???? Not in a flood zone.
Maybe I'll just stay where I'm at and pay cash 20 years from now...
Would you guys like to give some tips?
Pay attention to the location. Don't buy a fixer upper in a shady neighborhood or where all the other houses are dumps just because it's cheap. You'll get little on your return. Also take notice of nearby airports, train tracks, race tracks, factories, cemeteries, bars, etc., anything that may discourage potential buyers when it comes time to sell. Look for a house on a quiet cul de sac or near a decent park. You know what they say, location, location, location. Fenced in yards can sometimes be a plus, although they add to the maintenance. Avoid houses with foundation problems. Don't worry much about paint colors, carpeting or anything cosmetic. Kitchens & Bathrooms are the most expensive to remodel. Look for something with newer, quality mechanicals. Avoid houses in flood zones & anything with lead paint, asbestos or black mold. Abatement can be costly.
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Completely agree, buying a house is the most miserable experience ever, but by doing so early in life, I've been able to turn that equity a few times and afford a far nicer home than I otherwise could have. It worked for me, that's all.
Home improvement sucks big time. I'm living the nightmare of remodeling right now. :)
Heh!
It wasn't even necessarily the process, itself; that's just paperwork, and survivable. Just gotta say to onesself "This is gonna hurt a bit....," and lean into it. I had a certain Ms. Educated-to-the-Standardized-Tests holding mine up over a depressingly stupid reason, for longer than it should have taken to fix, and that kind of thing sticks with me. I fell ass-backward into a home worth well more than what I paid for it due to a fortuitous error on somebody else's part, one that's gonna pay off well when the time comes.
Having a water heater go Death Blossom on me was a bit of a wake-up; death came as a friend to that poor appliance....
Renting you pay all utilities anyway.
If all your utilities are in your rent, then you have to add projected utility costs to mortgage payment in order to compare apples to apples.
It'd just be taxes and insurance added on.
Spoken like a renter. You had better budget monthly for improvement and maintenance costs before they occur so as to make sure you can afford what's coming at you down the road. This year I replaced all of the major mechanicals in my house - heating, A/C, water heater and all kitchen appliances. Who do you think paid for that?
I fell ass-backward into a home worth well more than what I paid for it due to a fortuitous error on somebody else's part, one that's gonna pay off well when the time comes.
So the realtor overlooked the fact that your home was once owned by George Washington & the inspector didn't see the secret room, lined with the remaining Declarations of Independence, that happens to have the only door that leads into the world's largest diamond mine?
"Lucky" [in Napoleon Dynamite voice]
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Crow Hunter
01-15-14, 14:54
Renting you pay all utilities anyway. It'd just be taxes and insurance added on. Taxes around here for the home value I'm looking for are $1800/yr and insurance is maybe $???? Not in a flood zone.
Maybe I'll just stay where I'm at and pay cash 20 years from now...
You will need to factor in replacement costs of all your appliances, roof, maintenance on any decks, piping, plumbing fixtures, and potential annual increases in property taxes, which if Florida is like Tennessee, local governements get a large chunk of their revenue from property taxes and you will have to fight every reappraisal or you will be paying taxes on a $500,000 home that you can only sell for $150,000. You also are at the mercy of your local area on insurance, which is usually MUCH more expensive than renters insurance. Have a rash of homes robbed in your area? Your home owner's insurance may jump up $100 or $200. Bad hailstorm come through and a bunch of roofs need to be fixed? HOI goes up again. As long as you are ready for it and can afford it, it is nice to not have to worry about your rents going up. It is an inflation hedge.
It has it's downsides though. I was stupid when I bought my first house. I got a deal with my new employer that would pay closing costs on a house. So I took the bait. Then I was stuck in that house for nearly 7 years. Yes, I made money on the deal in the end, but I probably would have been better off renting for a year or 2 and finding out that I didn't like they job or the area and just picking up and moving. I also bought a house that I hated and lived in a subdivision that I hated. That was one of the reasons I came out ahead. I bought in a growing/demand area and got out right before the bottom fell out. If I had bought in a different subdivision or waited just a year later to sell, I probably would have had to bring money to the table.
I personally don't see my home as an investment. I see it as a place to live and an expense that is tax deductible and is an inflation hedge. If I can get out without losing my shirt, I will be happy.
Seriously. If there much of a chance that you might want or need to move in 5 years or less. Don't do it. (As in being young, not married and no full time career)
If you are pretty sure you are going to be there a while and can find a reasonable deal (do a BUNCH of checking and comparing $/sq ft), do it. (Married, dual income, set in a career)
The only reason I bought a house where I live now is because it was in the general area of where I want to be when I retire and I knew that I could get a job within 1 hours drive in several directions. I also bought a house that I was pretty sure that I could sell if I needed to without being screwed. Even then, last time I had an appraisal done (3 years ago), my home was only worth $112,000 vs the $140,000 or so that I paid for it.
Would you guys like to give some tips?
Buy a home warranty when you close. Oh and if you want, I've got two buddies with houses that are now on the market.
You guys are not making this sound very appealing.
Maybe I should buy some farmland , build a cottage and commute 100+ miles daily to avoid this
Oh, and use an outhouse.
Look at better homes 10% higher priced than your budget and bid low. Buy rural, same prices as city but you might have up to an hour drive. This gives you several acres, privacy, build a pole barn...etc. It can be well worth it if that's your thing. Mortgage closings are great...you walk away with the key! The process can be a lot of fun.
Eurodriver
01-15-14, 17:27
I have never seen more conflicting testimony and recommendations in my life. I knew this wasn't going to be easy.
FWIW, I was looking at renting a 2/1 for $1300/mo in a very nice, safe area. Utilities would run $400/mo (no utilities are included in rent). That's $1700 a month, which I can afford. My line of thinking was that if I could get a $120,000 (pretty much as low as you'd want to go around here unless you are in the hood) mortgage at 4.65% (guessing, but I have a 740+) with property taxes monthly and 0.5% PMI it would be $750/mo. Add the same $400 for utilities and that's $1150. Add another $200 for HOI (No flood) and its $1350/mo. That gives me $350/mo I could save to plan for repairs in addition to what I'd save normally.
It makes sense when I lay it out, but is entirely too overwhelming if I think about it for too long. Renting has a lot of perks. I'm only stuck there for a year, I don't have to repair anything, and I can be that guy in the neighborhood who throws crazy parties and makes all of your property values diminish (kidding) On the other hand, every dollar I give to a landlord is a dollar I have nothing to show for 30 days later.
Crow Hunter
01-15-14, 17:55
I have never seen more conflicting testimony and recommendations in my life. I knew this wasn't going to be easy.
FWIW, I was looking at renting a 2/1 for $1300/mo in a very nice, safe area. Utilities would run $400/mo (no utilities are included in rent). That's $1700 a month, which I can afford. My line of thinking was that if I could get a $120,000 (pretty much as low as you'd want to go around here unless you are in the hood) mortgage at 4.65% (guessing, but I have a 740+) with property taxes monthly and 0.5% PMI it would be $750/mo. Add the same $400 for utilities and that's $1150. Add another $200 for HOI (No flood) and its $1350/mo. That gives me $350/mo I could save to plan for repairs in addition to what I'd save normally.
It makes sense when I lay it out, but is entirely too overwhelming if I think about it for too long. Renting has a lot of perks. I'm only stuck there for a year, I don't have to repair anything, and I can be that guy in the neighborhood who throws crazy parties and makes all of your property values diminish (kidding) On the other hand, every dollar I give to a landlord is a dollar I have nothing to show for 30 days later.
We are all victims of our own circumstances.;)
I personally really felt tied down and miserable after getting into debt for $146,000 for a house that I didn't like in a neighborhood that I hated and tied myself down to a job that was terrible. Prior to that, I had never had any debt at all.
I have always heard the rule of thumb that you need to budget roughly 25-30% of your house payment for maintenance and not to do a house payment of more than 25% of your take home pay.
Also, don't forget if you are paying $400 for a 2/1, you will probably be buying a 3/2 and it will probably be more square feet and that will likely cost you more in utilities. Also, if you go for an older home, you might have less insulation that might cost you more on your electricity.
If you can afford it and you feel you will be there for a while, and as such can weather a drop in home prices and wait until a recovery to sell, you will probably be fine. Lots of people do it.
But lots and lots of other people have purchased a home with less than 20% down payment (as you are intending if you are going to have to pay PMI), then had the rug ripped out from under them and had their houses drop by 10 or 15% through no fault of their own. (The whole mortgage backed securities crises from 2008 that we are just now starting to dig out of)
Then, for whatever reason, they needed to move. Their house is worth less than what they owe on it and they have to bring cash to the table just to be able to move or do a short sale which really rips up their credit.
Just make sure you are going in with both eyes open and can negotiate the pitfalls.
+/- 10% gyrations in real estate values aren't unheard of or uncommon, especially in certain markets. Like Californian, Nevada, and Florida. You don't want to be stuck in a house that you put 5% down that you will have to pay 6% commission to sell and you need to move to another state to find a job after graduating college.
Couple things:
If you don't have every intention of being there 5 years or more, then rent.
If you do, you can buy out your pmi up front for something like $2200??? That will depend on some things, but generally, it only takes about 5 years to come out ahead on that.
Also, interest will likely never be this low again. We locked at 4.125% last month. That's incredible and will probably go away in the relatively near future. If interest rates climb, it will affect not only resale but your ability to own later if you choose to wait now.
Some things to consider.
I watched a friend write a check for $58,000 to sell his house and PCS.
No thanks. The house I own will be the one I build to die in.
Eurodriver
01-16-14, 08:26
I decided last night that I'm going to continue renting in my current location and just make the commute.
It's shitty, but I can take the expressway and pay tolls and avoid a lot of traffic. With the tolls, extra gas, and time I lose commuting I still come out way ahead. Plus, I don't have any shitty neighbors or landlords here.
Some of the replies here make me want to rent forever.
Some of the replies here make me want to rent forever.
It's really not bad at all. Before I owned my own home, I rented. It's a much greater pleasure to have my own place. Don't let the things we said discourage you in anyway but they are all facts of owning a home that you should be made aware of.
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Some of the replies here make me want to rent forever.
The house I am in is the 3rd I have owned. Speaking only for myself, my comments were not intended to make you want to rent forever, but they were intended to make you go into buying with your eyes wide open and earlier in this thread I didn't think you were.
On the other hand, I will say a house is a huge anchor. I would have probably moved out of Austin by now if it weren't for the house, which, by the way, I really like. I just don't like Austin any more. Edited to add: And it isn't because I can't sell the house. Houses in my neighborhood typically sell within 7 days or less with multiple bids above the asking price. It is because of inertia and because I have so much stuff to move. Houses do that - you will have more a lot more stuff in a 3/2 house than you will in a 1/1 apartment.
Agree with these guys.
Owning is satisfying, but it can be overwhelming at times.
If you choose to buy, listen to Ryno's advice and buy something highly marketable. Location-Location-Location! A good looking home with some curb appeal, a great location and some nice landscaping and interior amenities will be an easy sell if you decide to dump it.
Keep in mind property values and interest rates are about as low right now as they are likely to ever be.
& the inspector didn't see the secret room,
Somebody didn't see something, but not aything that exciting.
Every other one I'd looked at had pretty complete descriptions on their listings, and were priced accordingly. This one, the amount of finished floorspace was listed as x, and priced accordingly....when it actually had x + a loft in the master bedroom and a finished basement; significantly more floorspace than what was listed. Nobody seemed to have noticed the discrepancy, and I didn't say a danged thing about it since that'd be tantamount to asking "Hey, shouldn't the price be higher...?" :suicide:
Euro, owning vs. renting is no different than any other of the myriad things anybody aboard M4C hashes over or relates experiences; usually a matter of figuring out what set of complications that result from any given choice is gonna be the most tolerable to the user. I hated the buying process, and am not looking forward to the selling process; owning a home has been reasonably pleasant and a net positive to me, financially.
Crow Hunter
01-16-14, 10:00
I decided last night that I'm going to continue renting in my current location and just make the commute.
It's shitty, but I can take the expressway and pay tolls and avoid a lot of traffic. With the tolls, extra gas, and time I lose commuting I still come out way ahead. Plus, I don't have any shitty neighbors or landlords here.
Some of the replies here make me want to rent forever.
That is, I think, a very solid plan for the near term.
That said, I don't want to discourage you from owning a home eventually. It is a wonderful inflation hedge as, unlike renting, your payment and interest won't go up with inflation like rents usually do and eventually you will own it free and clear. It is a great long term action.
Once you graduate college and decide what you are going to do and the general area that you want to do it for a while, buying is a good idea. That isn't to say you won't run into difficulties but right now, in college, not married and working on getting into a career, I wouldn't buy. Once you are graduated, find a job that you like, meet a girl that you want to marry. You can decide on how far away from the in-laws you want to live (give that at least a year;)), then I would definitely recommend buying a house.
Would you guys like to give some tips?
Go here and download the HUD-1 and HUD-GFE. It's the first/third one. http://www.hud.gov/offices/adm/hudclips/forms/hud1.cfm
Sit down with all the numbers you think you know now... or figures you are expecting... like interest rate, utility bills etc. Then just start filling in the HUD-1... it's used in every loan, not just government types. Same with the GFE... they have to give you an estimate and it's usually very close if not exactly what the final result will be... Whatever you don;t know find out what it is ahead of time.... no surprises. there should be no surprises beyond that HUD-1, like ... "oh, that's a processing fee". the day you walk into the closing office they will have called you and told you to bring "$X.xx" dollars with you. Every penny is accounted for. POC=Paid Outside Closing -- that means it's accounted for but possibly not properly identified. Be sure to identify those.
Under the Appraisal part - some lenders and some States allow for fees to be hidden here. If you call around you can ask what appraisers charge and if you see a fee that looks a lot higher you should have it identified. The reason being, this fee could be hidden under another heading as well. for instance let's say an appraisal is $400 and the fee for that line is $800. Well they might say, oh that is where we pay the Appraisal Management Company $400 as well to hire the appraiser. the thing is some of those companies offer other services.... like let's say a title search... so you look at your title search line or administrative fees and basically you want to identify the charges. I'm not suggesting it's a problem but the fact is it could happen by accident or on purpose because of the manner in which some localities allow for the reporting. The bottom line..... CHARGE= $750 ... "I would like to see this invoice" "I don't understand this fee" "my copy of 'x-item' says $630"... Just keep asking until it all ads up. that's exactly what they HUD-1 is for and it's supposed to add up... but people do make mistakes.
If you have a pretty good handle on values and know your area well then that should not be a problem.... however if you have limited sales or offerings and are unsure of the value or simply watt to check out a subdivision that you may not be familiar with. Just go to the local assessors office or online site. do an 18 month search by subdivision for sales. Then compare price ranges. subdivision A might sell for 90K - 150K and subdivision B might sell for 120K - 200K.... so you need to ask yourself do you wan to spend 145K in subdivision A. It might be worth it but is it what you are trying to do from an investment standpoint. The homes may look the same and you might even like something about subdivision A better but most likely subdivision B is always going to be a higher priced area. this gets to be more important if you decided to upgrade the home..... ---especially--- if the value difference is mostly attributed to upgrades and remodeling and not simply home size. This tells you Sub-B will most likely reward you for your work should you decide to sell.
You are in the drives seat and you may not get that chance again. You have nothing to sell. there is an unfortunate thing about real estate sales. the next time around you may be under pressure to sell and buy at same time. You put your home up, you get a buyer, now you have to buy again, you will be under a time limit, the perfect next home may not even be on the market, you will be limited in your bargaining ability. So try to make this purchase highly leveraged toward your favor and a hedge for the next one.
The MLS systems are pretty decent these days. Some even offer the ability for the agent to allow a prospect(you) to search around in it. It's an effort to shut out Zillow and Trulia... why get the info second hand when you can get it from the source? almost all can at least set you up an automatic email... You give them the criteria you want to search on. Like x-SF, x-price range, x-area, whatever. It will email you a list of currents plus a daily list of the new stuff. ... don;t try to BS the agents though that you ask to set you up with this. They will follow up and can tell what you are looking at and what you are just ignoring. At any rate... practically all of the Realtors out there are willing to do the leg work for you and keep you right up to date via email.
anyway... that's some stuff to ponder but definitely get the HUD-1 figured out before hand.
Buy a reputable home warranty. Also make sure you get Owners Title insurance. This is something many people overlook and some idiot agents will even advise against.
Trust me. It can save you thousands. and the home..
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