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General rule I've heard is to budget 1% of your home's value per year to maintenance and repairs.
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Apr 24, 2011 05:58
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I am of the opinion that being a small scale landlord is one of the worst investment decisions you can make. The risk is absolutely massive, a bad tenant can easily cause tens of thousands of dollars worth of damage. Tenant screening services can help, but you are still betting that one person will be willing and able to pay their rent. You'll be paying retail for any maintenance that needs done as well. I wouldn't get into that business unless you have at least a dozen properties and are prepared to run it like the small business that it is. At least then you can negotiate maintenance on a contract basis or even bring someone on as an employee or independent contractor to do small stuff. Plus, if you have to evict one bad tenant, you won't be as badly screwed because you have many others paying rent.
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Apr 29, 2011 07:26
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You can always split the difference and say "We'll buy and install any type of flooring you want up to a value of X before you move in."
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Apr 30, 2011 06:36
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In certain areas, you pretty much have to own if you want to have a dog or cat, and that's important to some people. If you have certain 'vicious' breeds like pit bulls (which are no more likely to attack humans than any other dog) then you are not renting, period, and you may be restricted from owning in certain areas due to legislation, HOA policies, or being refused homeowner's insurance.
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May 6, 2011 06:10
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Here's another reason to DO NEVER BUY. What's the point of owning property if people who have way too much time on their hands can impose restrictions as draconian as the worst landlords?
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May 7, 2011 08:20
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senor punk posted:If a house in that area would cost $1.4m I can't imagine an open plot of land would be that cheap either. What are the chances she's dropping this mansion in the middle of nowhere an hour outside of DC? Plus, if municipal code requirements and such are different in MD/VA than in MI, that might be an additional expense. I don't see how shipping a fixed, stick built home could be done for 80k though, that's insane. I didn't even know it was possible, you'd pretty much have to tear down the house piece by piece and rebuild it, the amount of labor involved would be immense and it would take months.
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May 18, 2011 05:41
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necrobobsledder posted:They managed to be able to have it shipped via barge apparently, so they're not cutting up the house into pieces or anything it seems. I'm totally skeptical myself so I'd like to do some fact checking, but I was just curious to see if my intuition matched with reality. Maybe it's possible to ship it that way, but I doubt it's at all practical. You'd have to hire your own cargo ship for the journey, somehow transport a whole house to the port, load in on the ship, and then do the reverse once you got to your destination. I'd be shocked if it could be done for less than a million, let alone 80k, if it could be done at all. I mean, I'm sure the equipment for loading houses onto ships is available for hire at your local seaport, which certainly has the room to get the house near the docks in the first place.
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May 18, 2011 10:51
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necrobobsledder posted:They don't even do filtering of any sort it seems either. I had bought a ground floor condo of a 8-unit building and was getting mail about gutter cleaning, lawn renewal, etc. Given the cost of postage, you would think they'd try to do a LITTLE bit of lead qualification, but they just blow away their money and not care because it's too much work. The gutter/lawn care/whatever company pays a direct mail company to send out mail to a certain number of homeowners in certain neighborhoods, possibly at a certain income level. That's it. The direct mail company will use whatever lists they have, they don't care about whether the people can actually use the services they are selling.
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May 26, 2011 01:45
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The difficult part is that even if unemployment drops, a lot of people will have had their credit hosed in the meantime. It would be interesting to see how much the average credit score has dropped since the crisis began, I bet it is quite a bit. With the drive to tighter lending standards, lower unemployment won't mean much since there will still be fewer creditworthy borrowers.
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Jun 13, 2011 05:16
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Tezer posted:What's the advantage of using a third-party lender instead of my current bank (ING)? You shouldn't have any accounts at the bank you have your mortgage with. If you ever miss a payment, the bank will withdraw the money from your account, charging you large fees, especially since the withdraw probably overdrafted the account. If your current bank has the best rates, by all means get the loan from them, but close your other accounts and take them somewhere else. Edit: Sourced from a .gov website Konstantin fucked around with this message at 14:28 on Jun 28, 2011 |
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Jun 28, 2011 13:35
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You're underestimating what a bad house can cost. If you can't find another house in time, look into kenneling your pets, getting storage for your stuff, and checking into an extended stay hotel or a short term rental. Whatever you spend on that will be nothing compared to the money pit that house sounds like. Also, get another realtor when you do look at other houses, they are a dime a dozen and he should really be helping you out more.
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Jun 28, 2011 16:21
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The way I see it, the way healthcare costs are skyrocketing you will end up spending all of your retirement funds at the hospital unless you have millions of dollars or an absolutely ironclad retiree healthcare plan. If you have less, may as well enjoy what money you have now, since you're hosed either way later.
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Sep 6, 2011 20:23
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I've said this over and over again, being a small scale landlord is one of the absolute worst financial decisions you can make. You won't get a "steady income stream over time". You may make enough to break even if you are lucky, but one bad tenant can cost you tens of thousands of dollars in damages and lost rent. It is insanely risky and you won't get much return for it even if everything goes right.
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Oct 13, 2011 04:56
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Keep in mind that your time is valuable though, a lot of people spend way too long on their remodeling projects. I've heard of people whose ratio of "time spent" to "money saved" puts them well below minimum wage for the DIY work that they do.
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Oct 16, 2011 05:03
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FCKGW posted:It's always worth it to buy a house outright if possible. Some will say that with interest rates this low you could make more money in the long run investing your funds elsewhere, but then again you can't foreclose on a paid off house. I've seen various parties try to foreclose on a paid off house. I remember it made national news a while back when a HOA started foreclosure proceedings for unpaid fines while the owner of the house was deployed to Iraq.
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Nov 14, 2011 23:45
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Overpaying for the right house isn't really that bad. If you get a serious home inspection from a true professional, have researched auxiliary costs such as taxes and HOA fees, feel that the location of the house is ideal for your work/family situation, and have mortgage terms that fit within your financial plan, there is little reason to walk away. A lot of people skimp on the home inspection, so a solidly built home with no problems is undervalued in the market, while homes with serious issues that costs thousands to repair are overvalued, because the inspector didn't catch the problem or underestimated its' severity.
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Dec 5, 2011 19:26
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PC LOAD LETTER posted:Except there are plenty of cheap homes without any issues that are move in ready on the market right now and they're getting cheaper all the time given home inventory, foreclosures, falling wages/benefits, still high unemployment, rising cost of living, etc. Walking into a house and going WOW THIS IS PERFECT I MUST HAVE IT NOW after an hour isn't what I'm talking about. The real estate market varies from city to city and neighborhood to neighborhood, so you can't really make generalizations about market trends. When you are looking for a house, there are many things you have to consider, price being only one of them. One home may be in a great neighborhood, but have an active termite infestation that could cost thousands of dollars to repair. Another may be in perfect condition, but require a very long commute to your place of work. Every one of these things adds or subtracts value to the home from your perspective, and that may be different from how other people value those things. A couple with no kids and no plans for kids won't care how good the schools are, while that is absolutely critical for a family with a special needs child. If, after careful research, you find a home that meets your unique needs very well, it may be worth more to you then it would to other people. In that case, paying more than appraised value may make sense, especially if the home has a combination of attributes that are very valuable to you and difficult to find.
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Dec 7, 2011 14:58
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Plus, you have to go in with the idea that you will be replacing the wiring sometime in the future. If nothing else, the wiring will probably be a deal breaker when you sell the house, so you'll have to replace it by then. It's better to do that sort of thing before you move in, as inconvenient as it is now, it will be even more inconvenient later to live out of a hotel room for a month or more because you might not have power during the renovations.
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Dec 11, 2011 17:18
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While paying all cash may be overkill, I'd put as much down as possible while still having strong savings and retirement plan contributions. You'll save much more on interest and costs then you will make having that money in most mutual funds, unless your investing strategy is extremely aggressive. Another option, if you don't want to move money out of your current investments, is to pay down your mortgage as fast as possible while cutting back on what you contribute to your portfolio each month.
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Jan 15, 2012 04:11
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I would never buy a house under time pressure. 3 months is absolutely nothing for the largest purchase of your life. Look for a short to medium term solution, if you can stretch your finances, signing up for a 6 month to year lease on a property in the right neighborhood would be ideal. The extra you pay now will be nothing compared to overpaying on a mortgage. Seriously, your savings will be massive once your credit is fixed and you are able to spend the time needed to find the right house without being under pressure.
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Mar 5, 2012 21:07
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AA is for Quitters posted:So....question, any of you have experience in buying a mobile home? Anything to look for in particular, outside of the general structural stuff that applies to any building? I've been reading this thread on and off for a while as a "when I finally get rich" sort of thing, but I just found a place that is...well, too good of a deal to not at least look at and see what the catch is. Are you buying just the home or the land the home is situated on as well? Buying the home minus the land isn't that good a deal, no matter how little you pay. You have to pay rent on the land yet get none of the benefits of a traditional landlord-tenant arrangement. Plus, the landlord has you over a barrel, as he can raise the rent on the land, forcing you to scramble to sell your mobile home for whatever you can get. There is a reason why mobile homes without land are so cheap.
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Mar 12, 2012 04:36
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pimpslap posted:If you are month-to-month on your lease, you should be fine. Generally, closings are scheduled a month out from going under contract. You can also specify when you want the closing to be. Just let your landlord know when you go under contract (or better yet, let them know you are looking now). Worst case is, you'll have to pay a month's rent after you close, which isn't so bad since your first mortgage payment won't be due until a month after closing. At least that's how ours was... Paying for two places for a month isn't that bad if you can afford it. You can perform any needed repairs or remodeling before you move in to your new place, which is a big convenience if you plan on doing major work. Even something as simple as new carpet or paint is a ton easier when the house is empty and you don't have to work around furniture.
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Mar 12, 2012 19:06
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Koruthaiolos posted:I'm not sure if I should post this here or in one of the DIY threads so if it's out of place just let me know. One thing to make sure of is that all the proper permits and inspections were done. This should be something that you discuss with your home inspector, and if the sellers renovated it themselves they should be glad to show you copies. If they didn't go through the proper permitting process that is an absolutely huge red flag, you have no idea what is behind those walls, and when you do open them up you may have to redo everything to get it up to code.
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Mar 23, 2012 21:47
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spaceship posted:That's frightening. Here in Austin it seems like houses are rarely on the market more than a few weeks before they are sold. There is quite a bit of time between when a house is taken off the market and move-in day.
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Apr 11, 2012 17:04
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Citycop posted:Does anyone know anyone that has purchased a modular built home? There is a company in ft worth called brenco that has some nice floorplans and thry are saying $65 ish a sqft for a 2700 sqft house. They build it in sections then put them on the foundation on site. On paper it seems like a good option. My wife is afraid they will use substandard materials that will not hold up. I do share that concern. While many modular built homes are build with good materials, the big issue is that they don't hold value nearly as well as stick built homes. This means you may be underwater and unable to sell the home if you need to move. If you can afford a 10-15 year mortgage and absolutely know you are going to stay in that home for at least a decade then it may be a good deal regardless, but I'd take a hard look at property values for comparable modular homes. Build quality is another issue, and you should absolutely pay an independent professional to go over the plans and the materials so you know what you are buying.
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Apr 14, 2012 14:40
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Splizwarf posted:Why is this, and in what area (and where can I read more about it)? That's really unusual, everything I've read says the opposite, but you should believe your realtor over some guy on the Internet, especially if the realtor can show you numbers to back it up. The DC metro real estate market is very unusual anyway, so it wouldn't surprise me if things were different there.
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Apr 16, 2012 16:35
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xorex posted:Ran I did. I currently feel relieved. Hopefully there will be no regrets in the morning. Plus, a termite infestation is a huge red flag, since you have no idea how much damage they have done already and there is no way to find out without opening up the walls. At least you have a good idea how much a new roof is going to cost, with termites the damage could be minimal or it could be "you'll have to tear this house down to the studs".
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Apr 20, 2012 04:33
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The reason I'm anti-condo is that condos provide few of the benefits of home ownership with a lot of the drawbacks. People buy houses for a lot of reasons. They want to live in a place where the landlord can't kick them out or raise the rent, they want to customize their home to fit their needs and desires, they want the pride that comes with home ownership, they want a solid financial asset. A condo doesn't provide those things to the same degree a house does. Condo associations can raise their fees and change their rules whenever they want. The modifications you can make to your condo are very limited compared to what you can do with a house. You can't look at your building, standing on your land and say "I own this" in the same way you can if you own a house. Condos are a terrible asset in most markets, and it's doubtful they will recover, while well-built housing in the right neighborhoods is already in demand again. Why would you want to own a condo rather than rent an apartment?
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Apr 30, 2012 17:10
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I know that as a tenant, if my landlord is planning to sell the property they can't ask me to leave for showings, I figure it is the same for owner-occupied homes. Of course, owners actually have an incentive to sell the place, while tenants just have concerns about a new landlord.
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May 9, 2012 18:32
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Rockzilla posted:After some negotiating, filling out mountains of paperwork, and jumping through hoops, I now own a 616 sq.ft. box in the skies of downtown Vancouver. The home inspection revealed a few minor things that need attention, but nothing worth backing out or renegotiating price over, especially since we were in a multiple bid situation. Take it one step at a time. Make a list of what needs to be done, prioritize, then devote a weekend to the first thing on the list. Home Depot is okay, but if you have a small specialty store near you the people there should be able to give far better advice. Don't try and take on everything at once and set unrealistic schedules. Another thing you can try, since you have a lot of small things that need doing, is to contact a local handyman service. They should be able to get everything done in a day or two, at the cost of a couple hundred dollars in labor.
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May 13, 2012 04:21
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Plus, even if mommy or daddy cosign, it may be hard to collect from them if they live hundreds of miles away in another state or are judgement-proof. Even with a local cosigner, parents of a college-bound kid are a big credit risk, since they might take out huge private loans and max out other credit sources to help their kid pay for college.
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Jun 14, 2012 19:07
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Yeah, I'd rent for at least six months with a new city/new job, and probably hold off on having a kid as well until you are well settled in. Having more than one major life event happening at the same time is incredibly stressful, and you have two already (new city/new job) adding a third (baby) is just asking for trouble. Plus, if your new city isn't within easy driving distance of where you are now, it's nearly impossible to do the research you need. What are the school systems like in the neighborhoods you are trying to move to? (NOT district wide, you need to know what the exact schools your future children will be attending are like.) Crime rates? Traffic patterns for commutes? General neighborhood condition? What will you do if the inspection shows huge repairs are needed? One other point to make to your wife is that you will be living in this house for several decades and raising a family there, it's worth taking time to find the right place when you and your children will be spending a huge chunk of your life there.
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Jun 20, 2012 02:06
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If that's the case the market is going to get really interesting as people with a really large DTI because of student loan debt try to buy houses.
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Jun 22, 2012 06:47
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Another nitpick, why not reverse the main door and segment the master bedroom closet so that a part of it can be used as a coat closet? Sure you'll give up closet space, but it would be really handy, especially if you entertain often.
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Jul 10, 2012 05:14
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Yeah, I'd move into a 2-bedroom and wait a couple of years. Once you have some savings built up, you can afford to conduct an extended search, waiting and watching the market until the right house in the right neighborhood comes along. It's a lot easier on kids to move before they start school rather than after, so you want to make sure the house you buy is one you are willing to spend decades in.
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Aug 17, 2012 19:23
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I'm pretty sure at this point a HOA would rather have a well kept farm rather than a rotting house that will be sitting on the market for years. Plus, if the neighborhood isn't too conservative, you could grow organic and sell truly local food to them, which would help smooth things over.
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Aug 30, 2012 09:13
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I have to say, the incentives for Realtors, especially on the buyer's side, are all screwed up. Financially, a buyer's agent's incentives are to: 1. Have you buy a house (so he earns commission) 2. Have you buy quickly (so he earns that commission with the minimum of hours worked) 3. Have you buy an expensive house (so he earns a larger commission) That runs in direct opposition to what a home buyer should do. A home buyer should take his time and be willing to walk away at the last minute if need be, and only buy houses in his price range, which is often less than what a bank will give him. If I decide to buy, I seriously doubt I will use an agent, unless I can find one who is willing to work for a pure hourly fee with zero commission.
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Oct 29, 2012 16:28
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It's possible, but there are a huge number of investments you can make with that money that would be better than buying an investment property. Buying investment property on a small scale is one of the worst things you can do with your money that isn't an outright scam, for several reasons. First of all, it is a large amount of money in one asset. You are parking six figures on one house, in one neighborhood, and you are hoping that one tenant doesn't just stop paying rent or damage the property. One of the key concepts in investing is to diversify, and this is probably the least diverse investment you can make. Second, the risk is unlimited. You could easily end up losing much more than you initially invest in the house if something goes really bad, like getting a bad tenant that costs thousands in legal fees to evict and racks up five-figure damages. Third, the asset is illiquid. In an emergency, you can sell stock and get a check very quickly, selling a house can take months. Fourth, you have to actively manage the property or pay someone to do it for you. This cuts into any returns that you do get, and is a cost that most other investments don't have. Seriously, unless you are a real estate professional with serious local expertise and a few million laying around to buy a number of diverse properties, you shouldn't buy a house you don't plan to live in.
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Nov 5, 2012 10:20
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The issue isn't so much the 401k as it is the fact that you will be wiping out your savings for the down payment, plus you are buying under time pressure. Both of those are very bad ideas, look at the posts above this one for examples of unexpected costs that come up right after you buy. If you have to move 'right away' you absolutely shouldn't buy, the best position to be in is the one where you are mentally and financially prepared to walk away on closing day, because issues can and do crop up at the last minute. Rent a place out for a year, build up more savings, and do a long-term search for a house you are willing to spend at least a decade in.
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Nov 18, 2012 21:52
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Even if you're reasonable and don't want to sue, I'd still get a lawyer right away. Whatever your agreement ends up being, you absolutely need to make it legally binding, and you need to modify the original contract and formally resolve the outstanding legal issues. If you try to do it yourself it will end up a huge clusterfuck that will be a nightmare to sort out if there are further issues.
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Nov 20, 2012 19:13
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