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#2
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Rolled Roofing Blowing Off Manufactured Home, Repair Expensive?
Actually, you do save in this scenario. For the purchase price of $170k and
5.5% interest your total payment is $347,486.87. If the price drops 30% to $119k and the interest goes up 4 points to 9.5% your total payment would be $360,221.94. The equity would be higher in the first scenario, but you may find a better investment than 4 percent points over 30 years to make up the difference. EJ "Koert" wrote in message ... Hi AJ, As an appraiser in California, these are my thoughts: If the home is worth more than $150,000 - $200,000 or so, $3,000 to have the roof properly repaired is almost insignificant. I think the more important decision is the timing of your purchase. The market in California (assuming you're near Lake Elsinore) has been on a rampage for the last five years and the state of the current market has been described by some as "irrational exuberance". (Does this bring to mind the stock market of a few years ago?) Real estate values are now based as much on their speculative value as on the value of shelter. Real estate values could go anywhere from here. It seems impossible that it could continue upwards, but I was saying the same thing two years ago and it hasn't missed a beat. (Similar to when the stock market was going crazy in spite of what analysts were saying.) But, you are buying during a period of historical high values, at the peak (?) of a strong run in value, and at the time of year when prices are typically at their highest. (The market is usually strongest in June-July, settles a bit in August, and then has a final strong push in September. If I owned the property that you're buying, I'd be anxious to sell exactly now.) Also, the effects of the market are compounded by the type of property you are buying. When the market is strong, most buyers ignore atypical construction, location problems, etc. but when the market softens, buyers could demand huge discounts for manufactured homes compared to conventional construction. This would translate to a faster drop in value than you would experience with a conventional home. So, either way is a gamble. You can buy now and hope we don't see a 30-40% decline in value over the next three years, or you can wait and try to pick up the same type of property at a huge discount when the foreclosures start showing on the market. Today's interest rates are attractive, but it doesn't make sense to pay an extra 30% for a property because you're saving 4% on the interest rate. Anyway, over the last three years all my forecasts (the sky is falling!) have been wrong and the market has continued to remain strong. However, you'll want to go into this deal with your eyes open and aware of the possibilities. In spite of your friend's good intentions, agents are usually encouraged to remain optimistic about the market. Ask almost any agent, any time, if right now is a good time to buy or sell, and the answer is almost always "yes". |
#3
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Rolled Roofing Blowing Off Manufactured Home, Repair Expensive?
Whatever we do, it's a gamble, but the most important rules seem to be: Never buy anything you can't hold onto for at least ten years and Never buy a property you don't really like or can't really afford. Yes, I agree, infact I thought the exact same thing bout the real estate bubble. This is how I look at it, let me know what you guys think. 1. My lease on my appartment is up soon, I pay 920 a month + utils 2. Upon the end of my lease the will surley raise my rent tho who knows how much. 3. The home I'm purcahsing is 185,000, and payments will be around 1220 high estimate. (total, piti) So I need a place to live, at the end of the day, the cost monthly will be very close (as the new apartments here in 92562 go for 1300-1500 for a 2 bedroom). For the slight increase, I get more privacy, my own land, garage, quiet neighboorhood. I make plenty of money to maintain those kind of costs even if I were to loose my job. And, not to mention I am getting railed on my taxes every year with no write offs. I guess the bottom line is, this cost of living has risen so much here that at the minimum I will paying in to the same price range of purchasing a house, with none of the benifits. Now on the down side, the prices are on the high side, although I am not buying more than I can afford. There is a fear of prices dropping and me being stuck with a house thats worth less than I owe on it. For this problem, I could turn to renting the house out until prices rise (or maybe longer who knows?). Are there any problems with my logic?, I do like the house, I do need a place to live, I can afford it, worse case hopefully I can rent it out while I buy more properties. I do not plan on living there for 10 years however, I am 22 I am hoping to be on to bigger and better things with in the next 10 years Please comment Thanks |
#4
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Rolled Roofing Blowing Off Manufactured Home, Repair Expensive?
AJ wrote: Whatever we do, it's a gamble, but the most important rules seem to be: Never buy anything you can't hold onto for at least ten years and Never buy a property you don't really like or can't really afford. Yes, I agree, infact I thought the exact same thing bout the real estate bubble. This is how I look at it, let me know what you guys think. 1. My lease on my appartment is up soon, I pay 920 a month + utils 2. Upon the end of my lease the will surley raise my rent tho who knows how much. 3. The home I'm purcahsing is 185,000, and payments will be around 1220 high estimate. (total, piti) You need to plan your future in a little more detail than "bigger and better things in less than 10 years..." but financially, if you figure out when you expect to sell the house, you can then compare how much money you'll have in your pocket at that point if you (A) rent, (B) buy the house, and sell it at the end of that time, or (C) buy a cheaper house, and sell it, instead. Choose the result that leaves you with the most money. Obviously, the longer you stay in one place, the more sense buying makes. Equally obviously, owning a house always costs more in maintenance than you think it will. |
#5
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Rolled Roofing Blowing Off Manufactured Home, Repair Expensive?
"AJ" wrote in message
om... Whatever we do, it's a gamble, but the most important rules seem to be: Never buy anything you can't hold onto for at least ten years and Never buy a property you don't really like or can't really afford. Yes, I agree, infact I thought the exact same thing bout the real estate bubble. This is how I look at it, let me know what you guys think. 1. My lease on my appartment is up soon, I pay 920 a month + utils 2. Upon the end of my lease the will surley raise my rent tho who knows how much. 3. The home I'm purcahsing is 185,000, and payments will be around 1220 high estimate. (total, piti) So I need a place to live, at the end of the day, the cost monthly will be very close (as the new apartments here in 92562 go for 1300-1500 for a 2 bedroom). For the slight increase, I get more privacy, my own land, garage, quiet neighboorhood. I make plenty of money to maintain those kind of costs even if I were to loose my job. And, not to mention I am getting railed on my taxes every year with no write offs. I guess the bottom line is, this cost of living has risen so much here that at the minimum I will paying in to the same price range of purchasing a house, with none of the benifits. Now on the down side, the prices are on the high side, although I am not buying more than I can afford. There is a fear of prices dropping and me being stuck with a house thats worth less than I owe on it. For this problem, I could turn to renting the house out until prices rise (or maybe longer who knows?). Are there any problems with my logic?, I do like the house, I do need a place to live, I can afford it, worse case hopefully I can rent it out while I buy more properties. I do not plan on living there for 10 years however, I am 22 I am hoping to be on to bigger and better things with in the next 10 years Please comment Thanks Mortgage and utilities are not the only expenses. Add taxes, insurance, and repair expenses. Just reading this news group can raise your hair. If you buy an almost new house these expenses hit a low about 5-10 years after the purchase, but then rise steadily. And if you don't spend on fixing your house on average you will loose the value of your house. If you figure the total of 1.3 to 1.5 x your mortgage payment you should be in the right ballpark. EJ |
#6
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Rolled Roofing Blowing Off Manufactured Home, Repair Expensive?
No HOA fees? The saving grace could be that this house is truly
"affordable". A tax write-off is never a reason to buy something you don't need, but it does reduce the cost. It could be that the $1,220 per month you pay could be actually closer to $850 a month, after taxes (depends on your bracket). If you really would like living there for a while (make sure you carefully check out the neighbors!) it sounds like it could work for you. But, be warned, many neighborhoods are full of 30 year owners who only planned on staying for five years or so. At 22 years old, the years still go by fairly slowly. At 24, the years will go by four times as fast; at 30 they'll go by 164 times as fast; and at 40 they go by 26,896 times as fast. It sounds like a good deal, but if your real dream is to live in a one bedroom condominium in Dana Point, there might be some deals in the next 3-5 years. "AJ" wrote in message om... Whatever we do, it's a gamble, but the most important rules seem to be: Never buy anything you can't hold onto for at least ten years and Never buy a property you don't really like or can't really afford. Yes, I agree, infact I thought the exact same thing bout the real estate bubble. This is how I look at it, let me know what you guys think. 1. My lease on my appartment is up soon, I pay 920 a month + utils 2. Upon the end of my lease the will surley raise my rent tho who knows how much. 3. The home I'm purcahsing is 185,000, and payments will be around 1220 high estimate. (total, piti) So I need a place to live, at the end of the day, the cost monthly will be very close (as the new apartments here in 92562 go for 1300-1500 for a 2 bedroom). For the slight increase, I get more privacy, my own land, garage, quiet neighboorhood. I make plenty of money to maintain those kind of costs even if I were to loose my job. And, not to mention I am getting railed on my taxes every year with no write offs. I guess the bottom line is, this cost of living has risen so much here that at the minimum I will paying in to the same price range of purchasing a house, with none of the benifits. Now on the down side, the prices are on the high side, although I am not buying more than I can afford. There is a fear of prices dropping and me being stuck with a house thats worth less than I owe on it. For this problem, I could turn to renting the house out until prices rise (or maybe longer who knows?). Are there any problems with my logic?, I do like the house, I do need a place to live, I can afford it, worse case hopefully I can rent it out while I buy more properties. I do not plan on living there for 10 years however, I am 22 I am hoping to be on to bigger and better things with in the next 10 years Please comment Thanks |
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