Guys i am 50 years old this year and am thinking about buying my 1st house. I get up to a 10% or $ 8000.00 tax refund on the price of the house ( stimulus package program ). I have no wife , no kids. Live in Fargo ND in a apt. l love my job but business is slow. ( I am a mfg supervisor ), nothing is secure these days. Question... Does it pay for me to buy a small home ( about $ 80,000 is limit for me and you cannot get much for that in fargo area, I could buy something 30 miles away cheaper ) ? I like having options, it has paid off for me during the recessions in the 80's, 90's and 2001 when I had to move hundreds of miles to find a job. I Found out it is great to be liquid and mobile, I can be on a plane in 24 hrs and be interviweing if i get the layoff slip. I plan on working to age 62 if i can and then i am sure i will be phased out because of age ( THE AMEICAN WAY ) and then have to work a couple days a week in reatil or something to get by. Does it really make sense for me to buy a home in this market ? My brother is a CPA and said it really is not that great of a deal any more to own a house ( make payments to the bank. ha ha ). Houses are not going up in price, taxes are going up will go up a lot more, better to be liquid and moible ? Maybe i should by a little $ 30,000 house in one these smaller towns and use it as a little hunting cabin and then retire there for good at age 62 ? some place outside of Devils lake, Dickinso, Bottineau ? Your thoughts on this subject. thanks. coonman
coonman
Remind me never to use your brother as my CPA.
Think of it this way if you had bought back when you were 30 you'd probably have a home which is paid for or at least one with a pile of equity.
And just for kicks go ahead and figure out exactly how much rent you've "thrown away" over the years.
:wink:
That said, if I were you and you dont mind commuting I would take a serious look, as there are some great deals on homes in small towns.
dblklut....What a guy needs to understand is that i have gone through 3 major layoffs 1981 18 % in IL, 1991 15 % unemployment IL, 2001 ( 3 weeks after 9/11 IL ). if i had bought a house i would have lost it. Every time i was laid off i had to take a job at 25% paycut from the last job. plus you could not give a house away at the time. i have a sister and brother law that live in vegas and there house has droped in value 115,000 in the last 9 months, paper money but it is something you need to think about. I have had just as many CPA's tell if you dont have steady job it is to big of a risk. My brother might be right. If a person was to loose his job right now to you think you could find a job that pays even 60 % of what your making know ? i heard on fox news the only 24 % think they could find a job within 1 year that pays the same amount. it is hard to give up being liquid and moible were i can find a job that pays a living wage . thanks. just want to make the right decsion. coonman
It sounds like you have your mind made up already. If you have to talk yourself into it, don't do it. Go with your gut.
I just closed on my first house about a week ago. I feel I have good job security and am hoping I bought at a good time. I don't think I got a deal on the house by any means, but a guy just plain old gets sick of renting. If I didn't have job security, I would not have bought a house.
I just closed on my first house about a week ago. I feel I have good job security and am hoping I bought at a good time. I don't think I got a deal on the house by any means, but a guy just plain old gets sick of renting. If I didn't have job security, I would not have bought a house.
if you factor the opportunity costs, taxes, maintenance, et al, home ownership doesn't necessarily lead to more personal wealth than renting. It sure seems like you 'throwing away' your money on rent, but there have been many investments that produced much higher return on investment without the headaches of home ownership.dblkluk said:
diff'rent strokes for diff'rent folks, and all that...
I think getting investment advise from a bunch of guys who work all year to buy fake plastic birds and sit in a muddy corn field all day is a bad idea! Lets face it, how many thousands of dollars do we spend for each pound of meat we harvest? And how many of us buy a spread of decoys , just to sell them at half price and buy the latest greatest next year? I'd talk to a "professional" but then again....look at all the "professionals" that are getting bailed out with our tax dollars :huh:
If you do it smart, its a hell of an investment.
Now if you just go and buy a the first new home you see in new development from a realtor. And expect a huge return on investment, then you are correct.
But if you watch the market and are smart about your purchase in your area and then turn it in 3 years when the market booms, its great investment.
My wife and I are in our early thirties and we are my 3rd house. The first two paid for half the one we're in now :wink:
My house may finally be an investment. To date it has cost me money and not had the ROI equal to my other investments.
I may take out a mortgage on my existing home at 4.5% for an effective rate of about 3%
I can get a CD for 2.5% interest now.
I think rates will go up in the next couple years. If they go up to 4.5% I break even. If they go higher I get paid to have a mortgage. If they hit 9% my taxes will be earned on the mortgage money in the bank CD.
By they way I am married to a CPA who does not have clue on finance, she was valedictorian of her class. CPA's are generally not good investment ad-visors. I always mingle at her corporate events to test them and in all the years of her firms 100+ employees only one guy had a clue and taught me some stuff. Some of the best advice you can get is from people who do it. I notice on this board many guys who play the role would not even guess the market bottom. Really a financial advisor has a narrower foresight then the common investor. Most would not tell clients to sell in this free fall. Glad I sold out :beer: and went against all three of my ad visors suggestion :eyeroll:
I have learned some stuff from guys on here so please keep posting up your thoughts. My muddy plastic bird buddies.
Hammer
I may take out a mortgage on my existing home at 4.5% for an effective rate of about 3%
I can get a CD for 2.5% interest now.
I think rates will go up in the next couple years. If they go up to 4.5% I break even. If they go higher I get paid to have a mortgage. If they hit 9% my taxes will be earned on the mortgage money in the bank CD.
By they way I am married to a CPA who does not have clue on finance, she was valedictorian of her class. CPA's are generally not good investment ad-visors. I always mingle at her corporate events to test them and in all the years of her firms 100+ employees only one guy had a clue and taught me some stuff. Some of the best advice you can get is from people who do it. I notice on this board many guys who play the role would not even guess the market bottom. Really a financial advisor has a narrower foresight then the common investor. Most would not tell clients to sell in this free fall. Glad I sold out :beer: and went against all three of my ad visors suggestion :eyeroll:
I have learned some stuff from guys on here so please keep posting up your thoughts. My muddy plastic bird buddies.
Hammer
I'm in my third home now. I paid 72,000 for it in 1985. It is 1875 Sq feet with 3 car garage, a 32x40 pole barn and a 24x24 pole barn finished into a honey house. It all sits on 10 acres, 7 wooded acres with a creek running thru it. Two years ago it was aprassed at $343,000. It has since in the last year dropped to $237,000.
At income tax time I get to claim the property tax as a deduction, I also get to claim the intrest I pay on the line of credit if I use any.
I had to reroof the house in 1996 and the big pole barn in 2002 with metal so never again.
It is my land, I can stand in my living room window and take pictures of mink, otters, fox, deer, possums, *****, turkeys, phesants and a bunch of birds.
I can and do step out any door and shoot my rifles and shot guns.
I also have to chase off tresspassers from the city.
Buy a decent sized home in a decent area and the value will go up. What we are seeing now will not last forever. With a good sized home you can even rent out, the upstairs, basement even.
Thats my home.
You can still pack and be at a new area for a job in minutes. Just turn the eletric, water and gas off drain the pipes and go. You still can have a place to come back to when you retire.
I would not want your brother to be my CPA either.
Put you money in the bank. Make a whopping 5% maybe on the money in a year or two.
Al
At income tax time I get to claim the property tax as a deduction, I also get to claim the intrest I pay on the line of credit if I use any.
I had to reroof the house in 1996 and the big pole barn in 2002 with metal so never again.
It is my land, I can stand in my living room window and take pictures of mink, otters, fox, deer, possums, *****, turkeys, phesants and a bunch of birds.
I can and do step out any door and shoot my rifles and shot guns.
I also have to chase off tresspassers from the city.
Buy a decent sized home in a decent area and the value will go up. What we are seeing now will not last forever. With a good sized home you can even rent out, the upstairs, basement even.
Thats my home.
You can still pack and be at a new area for a job in minutes. Just turn the eletric, water and gas off drain the pipes and go. You still can have a place to come back to when you retire.
I would not want your brother to be my CPA either.
Put you money in the bank. Make a whopping 5% maybe on the money in a year or two.
Al
i think u guys are missing the point. my brother the cpa it is just his opinon, he is the cheif fianical officer of a home bulding company. he just has alot of clients hat have lost there 75,000 job and now are working for 8.00 hr. i think alot of you guys are really secure in your jobs. not every one is in that kind of a deal. In fargo if you loose your 50,000 year job were would you get another one ? when i was in Rockford IL in the 1980's and unemployment was 18% ( worse in nation ) my HR MGR came in the office and showed me a resume a guy sent him. it had ( 2 )100.00 stabled to it. That is what pressure can do to you when you have a 900.00 house payment and no job and no prospects of a job that pays more than 8.00 hr. My conservitive CPA brother could be right. thanks. marty
I'm retired, I now live on my SS and a little pention from the company I worked for. Also some from my bee keeping bussness.
My 401K is all gone it went when the L brothers failed.
My GM stock I bought at $41.00 a share is worth less than $5.00 a share now and no dividens in over a year. My delphi stock bought at 32.00 a share is worth about 15 cents and no dividens in 5 years.
But I have my land. the 10 acres here that I can borrow aginest if need be.
37 acres with a half mile of frontage on Big Bay DeNoc I can borrow on if need be.
What have you got for 30 years renting? I'll tell ya, ya got a bunch of recipts. Same as you will have in 12 years if ya don't buy your own bit of heaven. A place where you can plant a veggie garden if you want. A place you can mow the grass tomorrow instead of today if you want. A home you can paint purple if you want.
Ya the economey is down now making it an ideal time to buy a home at a price less than a year ago. It will not stay down. Even on the news tonight they talked about an up swing in home sales.
Plus you get the $8000.00 for buying a home now.
;D Al
My 401K is all gone it went when the L brothers failed.
My GM stock I bought at $41.00 a share is worth less than $5.00 a share now and no dividens in over a year. My delphi stock bought at 32.00 a share is worth about 15 cents and no dividens in 5 years.
But I have my land. the 10 acres here that I can borrow aginest if need be.
37 acres with a half mile of frontage on Big Bay DeNoc I can borrow on if need be.
What have you got for 30 years renting? I'll tell ya, ya got a bunch of recipts. Same as you will have in 12 years if ya don't buy your own bit of heaven. A place where you can plant a veggie garden if you want. A place you can mow the grass tomorrow instead of today if you want. A home you can paint purple if you want.
Ya the economey is down now making it an ideal time to buy a home at a price less than a year ago. It will not stay down. Even on the news tonight they talked about an up swing in home sales.
Plus you get the $8000.00 for buying a home now.
;D Al
I'm retired, I now live on my SS and a little pention from the company I worked for. Also some from my bee keeping bussness.
My 401K is all gone it went when the L brothers failed.
My GM stock I bought at $41.00 a share is worth less than $5.00 a share now and no dividens in over a year. My delphi stock bought at 32.00 a share is worth about 15 cents and no dividens in 5 years.
But I have my land. the 10 acres here that I can borrow aginest if need be.
37 acres with a half mile of frontage on Big Bay DeNoc I can borrow on if need be.
What have you got for 30 years renting? I'll tell ya, ya got a bunch of recipts. Same as you will have in 12 years if ya don't buy your own bit of heaven. A place where you can plant a veggie garden if you want. A place you can mow the grass tomorrow instead of today if you want. A home you can paint purple if you want.
Ya the economey is down now making it an ideal time to buy a home at a price less than a year ago. It will not stay down. Even on the news tonight they talked about an up swing in home sales.
Plus you get the $8000.00 for buying a home now.
Al
My 401K is all gone it went when the L brothers failed.
My GM stock I bought at $41.00 a share is worth less than $5.00 a share now and no dividens in over a year. My delphi stock bought at 32.00 a share is worth about 15 cents and no dividens in 5 years.
But I have my land. the 10 acres here that I can borrow aginest if need be.
37 acres with a half mile of frontage on Big Bay DeNoc I can borrow on if need be.
What have you got for 30 years renting? I'll tell ya, ya got a bunch of recipts. Same as you will have in 12 years if ya don't buy your own bit of heaven. A place where you can plant a veggie garden if you want. A place you can mow the grass tomorrow instead of today if you want. A home you can paint purple if you want.
Ya the economey is down now making it an ideal time to buy a home at a price less than a year ago. It will not stay down. Even on the news tonight they talked about an up swing in home sales.
Plus you get the $8000.00 for buying a home now.
Al
yep that is a good point on the 8000.00 refund. i am just wondering how i would make a 900.00 payment on 8.00 hr. That's what got the country in the shape it is now. every one thinks they are entitled to own or should i say make payments on house. once again i think it boils down can a person get another job at your current wage if u loose your job. i think it is unlikely. i have had to layoff employees the last 2 months. none have found a job, not even at 40 % less than there laid off wage. For some who bought a house in the past it might have worked out the question is will it work out in the future for home buyers. 15 years ? i am 50 years old. Maybe i played my cards right by being liquid and mobile and finding a job out of state in the 80's , 90's and 2001. Was able to keep my income up by renting were the good paying job was and not loosing money on a houise. the higher wage out weight the rent recipts. In Rockford IL Hosing has lost value every ear since the 1990's. FARGO ND is different, you guys have a very strong market here. house not only have held there vaue but have gone up. If i buy here close to fargo i hope the market stays strong for 15 years. thanks. coonman
With home prices where they are at now, you can almost make a mortgage payment for what you spend on rent each month. Kind of surprised no one has stated that.
I personally have been out of college for two years once the summer hits. I have had a full time job for about a year now. I have lived at home my whole life, and am fortunate to have parents that don't expect me to pay rent, although I help out around the house a lot.
I have saved up a lot of money in one years time. I don't spend it like its going out of style like a lot of people do. No bars for me. No CD's/DVD's. I spend money on fuel and a little spending money through the month.
I drive a beat up 2000 F150 with almost 200,000 miles. I can afford something newer, could pay cash for it. But it gets me from point A to point B with little spent on maintenance.
I will be buying a house this year, no questions asked. How can you not? Homes built within the last 8 years that originally sold for around $300,000 are now going for $145,000. These are nice houses! Newer, should be maintenance free for a few years at least. If the value even rises $40,000 in a few years, It will be a great investment.
Can't wait to get out on my own. Living almost free is great, but as I get older the urge to leave gets stronger. Hoping to put off a purchase til summer, and I should be able to put down a 20% down payment. Couple that with it being a buyers market, I hope to purchase one of these houses for about $130,000 max, put down a 20% down payment, and get an $8,000 tax break. A mortgage on $100,000 will be nothing to swing. Should be similar to a rent payment.
To me, there is nothing that I look forward to more than getting into my own house this year. It is perfect timing for me. Hopefully I can live there a few years and sell (tax breaks on the sale if you have lived there for 2+ years), and use an increase in the value of the house (hopefully) to buy something with a little acreage and a place I would actually call "home" (pee right out the front door and have no one able to see, walk out the back door to go hunting, etc).
This dream of mine is what gets me through the 60-90 hr weeks on salary pay (small business owner). The field I am in is very stable and I would expect a steady salary until I grow the business to a point where I can start taking bigger draws and hopefully be able to make all my dreams come true and my hard work pay off.
Not really sure where this fits in with this discussion, but I think no matter where you are in life, an investment in a home is one of the better investments you can make. Look at the long term ROI with real estate, and where the market is right now. It is like trying to play the lows of the stock market. Eventually, there is a point where it cannot go any lower and if you get in at the right time, the rewards can be great. I believe that time is now.
Thanks,
Chad
I personally have been out of college for two years once the summer hits. I have had a full time job for about a year now. I have lived at home my whole life, and am fortunate to have parents that don't expect me to pay rent, although I help out around the house a lot.
I have saved up a lot of money in one years time. I don't spend it like its going out of style like a lot of people do. No bars for me. No CD's/DVD's. I spend money on fuel and a little spending money through the month.
I drive a beat up 2000 F150 with almost 200,000 miles. I can afford something newer, could pay cash for it. But it gets me from point A to point B with little spent on maintenance.
I will be buying a house this year, no questions asked. How can you not? Homes built within the last 8 years that originally sold for around $300,000 are now going for $145,000. These are nice houses! Newer, should be maintenance free for a few years at least. If the value even rises $40,000 in a few years, It will be a great investment.
Can't wait to get out on my own. Living almost free is great, but as I get older the urge to leave gets stronger. Hoping to put off a purchase til summer, and I should be able to put down a 20% down payment. Couple that with it being a buyers market, I hope to purchase one of these houses for about $130,000 max, put down a 20% down payment, and get an $8,000 tax break. A mortgage on $100,000 will be nothing to swing. Should be similar to a rent payment.
To me, there is nothing that I look forward to more than getting into my own house this year. It is perfect timing for me. Hopefully I can live there a few years and sell (tax breaks on the sale if you have lived there for 2+ years), and use an increase in the value of the house (hopefully) to buy something with a little acreage and a place I would actually call "home" (pee right out the front door and have no one able to see, walk out the back door to go hunting, etc).
This dream of mine is what gets me through the 60-90 hr weeks on salary pay (small business owner). The field I am in is very stable and I would expect a steady salary until I grow the business to a point where I can start taking bigger draws and hopefully be able to make all my dreams come true and my hard work pay off.
Not really sure where this fits in with this discussion, but I think no matter where you are in life, an investment in a home is one of the better investments you can make. Look at the long term ROI with real estate, and where the market is right now. It is like trying to play the lows of the stock market. Eventually, there is a point where it cannot go any lower and if you get in at the right time, the rewards can be great. I believe that time is now.
Thanks,
Chad
Record interest rates for mortgages and a depressed housing market make this chance of a lifetime to get an affordable home. The housing market like all markets move up and down and right now it's way down. You also start building equity rather than wasting money on rent and not owning anything. Besides that you can write off the interest paid on the mortgage for taxes. Buy closer to town as they hold or go up in value better and have more buyers if you sell some day. I would buy without a second thought as you couldn't have a better situation for buying a home. Good luck!!!
We all are assumeing a lot here too.
To get the home morgauge you have to have a great credit score today. Not as easy to get the loan as it was 6 years ago.
Then you need to find a lender that isn't being tight fisted with fear.
I don't think your going to find many places that will take a chance with you unless you have a nice chunk of money to put down.
Being a gyspy, you should buy a big fifth wheel trailer and a truck to pull it. Now you don't even need to pack just hook up and leave, no roots any where. just pay a little lot rent where you park at. Shoot ya could even shuffle around to all the wal marts close by and have free rent. the cost on them( truck and trailer) are low now too. The intrest paid on a financed trailer is deductable too.
Al
To get the home morgauge you have to have a great credit score today. Not as easy to get the loan as it was 6 years ago.
Then you need to find a lender that isn't being tight fisted with fear.
I don't think your going to find many places that will take a chance with you unless you have a nice chunk of money to put down.
Being a gyspy, you should buy a big fifth wheel trailer and a truck to pull it. Now you don't even need to pack just hook up and leave, no roots any where. just pay a little lot rent where you park at. Shoot ya could even shuffle around to all the wal marts close by and have free rent. the cost on them( truck and trailer) are low now too. The intrest paid on a financed trailer is deductable too.
Al
That's the way it's supposed to work, AlleyOop...glad it worked out for you. I agree that now is an excellent time to buy a house based on the current market conditions...if a house is right for your needs. That's a very important criteria...more important than a house being an investment vehicle.
Some pitfalls that might erode your investment include real estate taxes going up as local gov'ts lose state funding (yes you get a deduction on income tax but it isn't 100%); unexpected repairs and maintenance, especially if you aren't that great at do-it-yourself; unexpected life events like divorce, disability, losing your job, etc; and opportunity costs of what that $ could earn you elsewhere. yeah, bank CD's are almost worthless but there are still places where you earn double digits (your own small business if you are good).
If I were in your situation ****, with no dependants to worry about and possible moving around still, I'd think now would be a great time to buy the place for your retirement and golden years (if you're 50, it ain't that far away). Then 10 or 15 years from now, you could be enjoying it like AlleyOop is enjoying his piece of heaven...
Best of luck!
Some pitfalls that might erode your investment include real estate taxes going up as local gov'ts lose state funding (yes you get a deduction on income tax but it isn't 100%); unexpected repairs and maintenance, especially if you aren't that great at do-it-yourself; unexpected life events like divorce, disability, losing your job, etc; and opportunity costs of what that $ could earn you elsewhere. yeah, bank CD's are almost worthless but there are still places where you earn double digits (your own small business if you are good).
If I were in your situation ****, with no dependants to worry about and possible moving around still, I'd think now would be a great time to buy the place for your retirement and golden years (if you're 50, it ain't that far away). Then 10 or 15 years from now, you could be enjoying it like AlleyOop is enjoying his piece of heaven...
Best of luck!
That's been my priority for the last several years too. They aren't making anymore of it...headshot said:
I have the same background as your brother and I agree with him. Why? Because of the concern about the stability of your job. Your company is laying off employees and work is slow. If you had a lot of savings and more confidence about a steady job this would be a no brainer.trappermrd said:
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