I think it's a bad idea in general to stretch too far in buying a house

Feb 22, 2019
2:03:49pm

Belboz All-American

At this point, the financial worth of my house is less than two times my yearly household income and I don't think I'm depriving myself over it. According to some people, I could afford a lot more but I can't imagine why I'd want to do that.

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Belboz

Bio page: Belboz
Joined: Jul 5, 2001
Last login: Apr 19, 2024
Total posts: 73,432 (13,001 FO)

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Messages

Author

Time

One of the worst financial decisions a new grad or new professional can make is buying a bigger home than you need.

Baron There was no collusion

2/22/19 1:11pm

That's why if you're smart, you move to a place like the SF Bay Area, where you

mik3

2/22/19 1:12pm

RE: That's why if you're smart, you move to a place like the SF Bay Area, where you

Tokolosh

2/22/19 1:14pm

RE: One of the worst financial decisions a new grad or new professional can make

CougarHut

2/22/19 1:17pm

But now days you need to have a minimum of $24,000 to itemize.

JAGA97

2/22/19 1:20pm

Most people stay in their home far less time than they anticipate.

garyfan

2/22/19 1:23pm

I think we'll see this change. Assuming interest rates head higher over the next few years, it will be more

HarlemCoug

2/22/19 3:06pm

I take the opposite position...stretch more than you think on your first place

Iman23

2/22/19 1:23pm

Yea that is great if you want to kill your gainz. This is for people who want to be good at making money and not slaves

Baron

2/22/19 1:25pm

The utility of the extra features of a house that makes you house-poor doesn't

TaiJuan

2/22/19 1:28pm

<< Deleted >>

Rooney

2/23/19 5:27am

Bottom line is, stretch on investment instead of consumption

hansel

2/22/19 1:49pm

True fact.

cougfanz

2/22/19 2:03pm

Also renting is OK. It is not "throwing your money away" like some people think

JackStack

2/22/19 1:24pm

If you have a mortgage, you are simply renting money rather than a house.

crack

2/22/19 1:25pm

But you can live in a house and can't live in money.

garyfan

2/22/19 1:28pm

the difference is that while renting, you are generally much more flexible

JackStack

2/22/19 1:38pm

renting has additional benefits

grandpacoug

2/22/19 1:44pm

Unless the owner is subsidizing the tenants those costs still go into the rent being charged...

Tokolosh

2/22/19 1:48pm

Renting is the right choice at times. But often people confuse the rent vs buy decision...

Tokolosh

2/22/19 1:46pm

there is another benefit to owning a home which no one has mentioned yet.

grandpacoug

2/22/19 1:49pm

One of the worst financial decisions a person can make is marrying a spouse who is bad with money.

Sea Chicken

2/22/19 1:25pm

Probably the most important choice after your career.

Baron

2/22/19 1:27pm

In some cases, could be more important than your career.

crack

2/22/19 1:28pm

What's worse is I've seen non-married people do this. What a waste of money and

GAINZ

2/22/19 1:25pm

What would a single person do with all that space? And it's not like they are going to stay there after they get married

Slim

2/22/19 1:43pm

I mostly agree, except in some places it’s cheaper to get a mortgage for a 3

Lieutenant America

2/22/19 4:06pm

I think it's just as bad to move multiple times within the same city.

Fatalplacebo

2/22/19 1:29pm

This seems to be what floats the economy of St George.

kccougar

2/22/19 1:44pm

at the current time you are probably correct about St. George.

grandpacoug

2/22/19 1:46pm

I would expect a new grad to move multiple times in the first decade anyway. why buy a house?

byujag

2/22/19 1:30pm

Are you talking about switching companies?

Great38

2/22/19 1:52pm

It depends. Early career job switching has become a lot more common...

Tokolosh

2/22/19 1:55pm

Yea. This probably depends some on career and market in the city you live.

Cougar8Duck

2/22/19 3:17pm

False. I overextended myself 6 years ago and it’s been a fantastic decision

SlantRoute

2/22/19 1:43pm

This is called survivorship bias.

mik3

2/22/19 1:44pm

Fine by me. Call it whatever you want. Took a risk and it’s been awesome

SlantRoute

2/22/19 1:50pm

How much did you put down?

Baron

2/22/19 1:52pm

Glad to hear. Pointing out that your experience doesn't make OP "False".

mik3

2/22/19 1:55pm

I know. I’m purposely being a little obtuse

SlantRoute

2/22/19 3:05pm

And you’d be singing a much different tune if things had gone the other way

BYUFootballisBack

2/22/19 1:46pm

If you bought two homes and rented it out, you would have doubled that

Baron

2/22/19 1:46pm

if buying one rental house is good, buying two must be better and why not 10....

grandpacoug

2/22/19 1:50pm

well, you aren't wrong. If you have the financing it's a smart move

Saxa

2/22/19 1:51pm

I hope to some day. But you are the pro at that

Baron

2/22/19 1:52pm

Did this, moved into a bigger house after 6 years and kept the first as a rental

JONBOY

2/22/19 1:47pm

great strategy.

grandpacoug

2/22/19 1:51pm

That was my plan. Timing didn't work. Bought the first house in 2008.

Cougarrr

2/22/19 2:40pm

Yep. U also lose leverage. Doctors make that mistake all the

cougfanz

2/22/19 2:02pm

These days the doctors are much more worried about their student loan payments than their mortgage payments. Those

Slim

2/22/19 2:33pm

I think it's a bad idea in general to stretch too far in buying a house

Belboz

2/22/19 2:03pm

We bought a smaller home that we plan to rent out

Crazy Duck

2/22/19 2:04pm

I generally agree. But there are many instances when buying big can pay huge

JAGA97

2/22/19 2:15pm

False, I did that and now I own two homes, rent one out and it pays nearly both

Romex

2/22/19 2:18pm

And you make the mistake of ignoring opprtunity costs.

Baron

2/22/19 2:23pm

Laugh if you like but you could have a third home by now. But not everyone can get the gainz.

Baron

2/22/19 2:59pm

I want to live in a nice house. I spend a lot of my life there and I only

Windward_Coug

2/22/19 2:27pm

Where did I say not to do that? And ok'd people can burn their money if it makes them feel good. Not so much a 23 year

Baron

2/22/19 2:28pm

I'm just saying that CB generally looks down on those that spend to have a nice

Windward_Coug

2/22/19 3:01pm

See, I think the problem many fall into is thinking house prices always go up

crack

2/22/19 3:08pm

I agree. It ties up a lot of money. Best bet is to get something very

WizeGuise

2/22/19 2:43pm

Not as bad as leasing expensive cars, phones, etc..

byu1

2/22/19 3:01pm

If you are a yewt, save your money and buy the gas station you work at.

Bovine University

2/22/19 3:25pm

RE: If you are a yewt, save your money and buy the gas station you work at.

Tokolosh

2/22/19 3:31pm

I'm still trying to figure out how to come up with the down payment.

Rooney

2/23/19 5:29am

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