How come everyone is telling me to buy?!?!?!?

[MonkeyMama]

I am completely at a loss why people freak out when you say you are going to plan a couple of years to buy a house. (In your case more like 3).

A house is a big investment. Perfect example how most people want buy things now and figure out how to pay for them later.

I don't think it's unreasonable to save up 2-3 years for a house purchase. Heck, I don't think it's unreasonable if it took many more years.

Anyway, I already own a house and I got people left and right pressuring me to buy an investment property. I honestly think they are crazy. Their is a glut of housing and it has been hard to find renters ever since we have lived in this area. We considered buying a rental a few years ago and eventually decided against it. There are many, many, many reasons we decided not to go this route. But the most obvious are we couldn't float it on our assets and income alone (without a renter). This is what has screwed everyone over these last few years. But it seems to me everyone who is unscathed wants to jump in and succeed where everyone else has failed. It's a little scary. I am sure it is a great time to invest if it is right for you, but I see a lot of people jumping in head first with little thought, simply because there are deals to be had.

So anyway, I own a house and I am still getting it left and right - I need to buy another one. (Yeah, whatever).

{DebbieL - I understand. I have a sister who has spent a lot of time in the psych ward - bipolar. I feel extremely blessed to be about the only female in the family that did not get those genes. But I suffered a little PPD with my last child and I have to say I have a profound new respect what many in family go through}.

[Scanner]

I think there may be a compromise.

If you can get into a house for 250K, then 20% of that is 50K (almost had to get out a calculator, ha, ha).

You leave 10K for an emergency fund. . .not sure why you feel you need 100K, unless your future cash flow is so low that you need to keep the mortgage low.

That being said, I agree with Disneysteve. . .if you don't know where you all will be working and other "non-financial" factors. . .then don't buy and just keep making real estate agents and title companies money.

[ScrimpAndSave]

Thank you all for your support.

The big factor for me right now is:

Buy a $150,000 shack for little money down and stay in it for 5 years with a 30 year mortgage.

OR

Wait 3 years. Buy a beautiful $250,000-$300,000 house that can be my FOREVER home with 15 year mortgage and work on paying it off earlier.

No brainer for me!

But people insist that if I buy the $150,000 shack, I will gain all of this equity. But I'm sorry - with all of the maintanence and cost of upkeeping a house - don't they consider the amount that I would lose? Right now, I am saving $1500 a month toward the purchase of a home. Starting in Sept. I will be saving $2000 a month. Next Septemer...about $3000 a month and then the Sept. after that, $3500.

I don't think I could build equity that fast if I bought a crack house.

I have 3% interest (right now) on my earnings in my INGdirect account as well.

[Scanner]

Oh, to stay on topic, probably the reason why people think you are crazy to not buy is because they are only relating it to their situation.

They think, "Well golly gee George, if I had $50,000 sitting around, I'd buy me a house." Your friends are right. . .now IS the time to be "cash rich." But it just doesn't apply to your situation.

They are in their self-centered world. This is what makes financial planning so theorectically attractive to me. . .to actually consider where the client sitting in front of you is coming from and basing advice on that and perhaps sometimes why you should approach a board like this or a financial planner/accountant for advice.

[Scanner]

Oh, and stop cutting out pictures of decorating magazines. . .I hate when women do that as much as women hate when men don't put the toilet seat down.

You'll drive yourself crazy and be more likely to over-splurge after you get your house.

[disneysteve]

But people insist that if I buy the $150,000 shack, I will gain all of this equity.

So they are suggesting that you buy a house that you don't want in hopes that it will appreciate in value faster than the money you are investing. You need to find some smarter friends.

Plus, you then have to hope that you can sell it easily when you are ready to buy the home you do want. And you have to move twice, decorate twice, pay all the related expenses twice. Yep, real good plan.

[JanH]

I'm so sorry to hear that about your brother...I was only diagnosed a few months ago...and it's a low end of the spectrum.

Gruntina...I think that is a great idea. I was actually thinking that today when I was looking through and interior decorating magazine. I was thinking of tearing our pictures of things that I love so I can figure out what my personal style is really like once I start to decorate my house.
And yes, I do keep vigilant watch of my savings and I have my savings planned up through 2011.

I did look at some houses with my realtor...and it did give me a much better idea of what I want in a house.

Open floor plan...large kitchen...hardwood floors..etc.

Me, too, milder form. Glad you got a diagnosis. When we were young, people kept wondering why we didn't buy a house. Well, we had chosen one income and kids. They often had two incomes. We had to wait until time was right for us. Sounds like you are planning for YOUR dreams, not anyone else's and I think that's the way to go. As for the magazine thing, I have to agree with you on this. My very frugal sis-in-law scoured magazines and cut out what she loved in decorating and yard stuff. She then proceeded to make her own, paint her own, build her own, and what all. You wouldn't believe how nice her home looks and at a very little cost. She used the mags for ideas. Then, did it cheaper and creatively. Course I knew a bipolar that took that to extreme and was showing me grand ideas for ripping out his whole apartment. So, I realized that I have to make sure I'm not going overboard. I keep her example in mind. I didn't have a clue as to my taste either. It helps to walk through the home improvement stores and open houses and mags to see what you actually like so that you don't buy and wonder what you were thinking.

[cptacek]

Maybe they are telling you to buy because it sounds "better" than suggesting that you to move out of your dad's house?

[gamecock43]

To reference whether to stay or go from Dads house:

I think Scrimp is about 25 yrs old. I think the generation before her got out, lived on their own around 20 yrs old or ASAP after college, but the trend now is people are living with parents until mid-later twenties due to the cost of housing and the need to have substancial cash for a middle class lifestyle. Maybe this should be a new thread topic- and i agree that kids should not feel 'entitelment' to their parents lifestyle immediately out of college, but it is a trend for kids to stay at home later and i do agree that it helps save money in the long run for some kids (who are responcible with their money and are actively trying to get out as scrimp is) The other kids who stay home and spend $$ on shoes- kick em out.
And Scrimp is going on for higher education and it's very common for people who are still in school to live at home.

[ScrimpAndSave]

Game - thank you so much.

I am actually 27 years old. I was living on my own for a few years as a teacher until my mother fell ill in 2004. 8 weeks after being diagnosed with cancer, she died.

I've been at home since...living in a big, paid off house with my father. We're get along very well and he is the suggesting that it is not smart financially for me to move...when I rent my space in the house for $400 a month and have plenty of privacy.

I did get my masters degree with the past two years as well.

Also, I am Greek and Italian...and it is sort of a cultural thing to stay home a little longer than the norm.

Either way, I contribute to the cleaning and and cooking...and we work as a team. Now that I am off for the summer (except for some part time work), my dad usually wakes up at 8:00am and the first thing out of his mouth over coffee is, "So - what are we doing today? Garage sales? Cleaning up the basement" Painting the hallway?....."


He's nonstop. Haha!

[cptacek]

Hey, I'M not saying to move out. I was asking if THEY were suggesting it.

(Well, I do suggest moving out, but if you don't and your fiance is ok with it, I hope it works out)