Quote:
Originally Posted by hubbahubba
This is really great advice, and I wish I could have been in the financial position to follow it every time I bought a home. That said, even though I did not buy while using that criteria, if I had waited to get what I considered a liveable home for my family, I would have been priced out of what I was aiming for. Market timing also needs to be considered, and if done properly you could enjoy the tax benefit of a 30 year mortgage vs nothing on renting, and accrue some decent capital appreciation. Especially in Seattle. Yes, being house poor sucks, but at this point in my life I am pretty sure that if I had a chance to do it again, I would do what I did. Renting sucks (to me anyway) more than being house poor. For me, home ownership created other opportunities to leverage money as well, which also contributed to what has accumulated in my little nestegg. Rule number 1- capital appreciation, rule number 1A- capital preservation. Any way you slice it, to be thinking about it in this fashion for the OP is a great thing, and I wish him nothing but the best!
PS.. FWIW, I am on a 15 year now, and it really is the way to go if you can swing it.
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When I got into my house I was definitely house poor, it was the dumpiest house in the neighborhood. I was about 23 when I bought it, it was $450,000.
After a couple of years a buddy of mine rented a room from me. I redid the kitchen by myself and used the money I saved to buy a new Porsche
(sometimes you have to have a little fun).
I never planned on staying in the house, but I'm still in it. The real estate market went nuts (in the SF Bay Area), and I probably couldn't rent an apartment for what my 30 year mortgage is now.
I have put a bunch of money and sweat equity into the house, did an addition, put in a pool and an outdoor kitchen.
The house is worth nearly 3 times what I paid for it, and living 'cheap' (having a reasonable/comparatively low mortgage) has allowed me to buy vacation home (that I now rent out), and that crazy place has doubled in value since I bought it 7 years ago.
I'm not saying that I am some real estate genius, but owning your house allows you to control one of your biggest expenses, and it makes the money you were going to spend anyway (rent) work for you.
You can get someone to rent a room from you to help with expenses. You can also get a home equity line if you want to, so your money isn't completely tied up.
A home is a place to live and a very valuable/versatile tool.