Tell me about owning a House

If I bought a place and then try to get rid of it 2 years later, would that be very bad?

How's the housing prices been increasing in your neck of the woods? If they've been going up like mad, you might be able to find yourself making one sweet profit. Sounds like you have many arguments on either side to whether to by or not. I'd almost suggest going for it but not if you won't get peace of mind.

I just got an idea. Down the street from me is a housing co-op where I know the people pretty well. They are set up through a national agency. People get together, buy unwanted housing and renovate it for co-op use. I'll ask them how it works- perhaps something like that could be arranged with myself, roommate and the other renters (they are a family that has been there 10 years, so a good prospect.)

the co-op thing might be a good idea, as long as you could find someone to replace you should you need to move with rather short notice. also something to consider about the other family - if they've been there 10 years as renters, perhaps they aren't interested in the burden of owning, or can't afford it.

your area may be a little more promising since there seems to be some sort of renaissance there right now, but buffalo is still... buffalo. maybe see if the city has any kind of stats on file about real estate trends for your section of the city, and also check out the forecast for economic growth/decline since that is always a big issue for western ny.

i don't mean to be a total pessimist... just going with what i know of the area. good luck! :-)

I'm trying to talk my brother out of buying a house he's set on currently. It's 70 years old, pier-and-beam foundation, shitty area of town and not too cheap (1500 sq ft., $70k), I'm fairly sure it will need quite a bit of work in the next few years.

If you don't mind me asking, what kind of footage and price is being talked about?

I just remembered- I accidentally opened some "occupant" mail for the people in back- it was a shutoff notice for the heat. That's not good, but I don't know anything else about them.

The house is slightly old and run down inside (carpets & woodwork have seen better days), it cost a lot to heat, but there have been no maintainence issues and the rent was the best possible deal in this neighborhood. It's a cool neighborhood. Footage, I can't say right now. It's a front and back duplex, so I have 2BR with 2 floors, it's extremely roomy. No parking but there's a decent small yard for the back apartment. It's 70K.

Lucky for me, I have a nice neighbor across the street who rents out some places himself, so I'll ask him for advice too. He seemed to have a good impression about this house, he talked to the real estate guy (although he's not looking to buy it).

Got to watch out for phrases like this. Problem is, she'd get EXACTLY what it's worth, by definition.

I bought a place with rental and it helps a lot with the mortgage obviously. The work isn't too bad but it can become annoying. Repairs and complaints will of course pop up at the least convenient time. It can become difficult if you have a day job and need to show up to meet with repairmen during the day.

Also, I owe an almost 20 grand student loan. Although that might set up credit for a house loan.

If you've been paying the loan off on time with no late payments then that should help your credit but it might not look too good that you have that much debt. Still, it's pretty easy to get a loan now so you shouldn't worry about whether or not you'll get the loan. Just decide what you want to do and then see what happens.

For future planning, I'm not sure about staying in one place either.

This could be bad in terms of housing bubbles and the possibility of a burst that people always seem scared of. These kind of price fluctuations don't really matter if you're planning on staying in a place long term but if you're going to move in two years then you're taking a gamble. The gamble could pay off but you never know.

If it's an area that hasn't already seen housing costs increase during this big housing boom then I can't imagine that it's going to catch up now. And if the value of the house only increases slightly in a couple of years then it's likely that after all of the costs associated with reselling you'll only break even or take a bit of a hit.

I don't know about property taxes (in CA they stay the same rate as when you buy the house so it's not as much of a concern) but you should probably look into how that works in your area.

This all sounds more negative than I meant it to. I think buying a house is a great thing to do, but I also think it's best to go into it as a long term commitment rather than hoping for a short term payoff. On the other hand that price is so cheap compared to housing in LA that I can't imagine not doing it but I realize it's all relative.

There are a lot of blogs about adventures buying and restoring older houses. Most focus on the details of period architecture, rehabbing/DIY etc. but may also include potentially helpful info about actually purchasing the house which I thought might help you. One of my favorites (and one that talks specifically about neighborhood regeneration and community-centered housing associations etc) is at: http://www.lestercat.net/house_03/

I dunno if this will be helpful to you--I do know that if you're going to buy an old house (and it sounds like yours is?) it helps keep you sane to have a real love for them, because things will break spectacularly or need seemingly constant maintenance, and you will get personally involved with a building like you never thought you would.

Otherwise get a full survey, structure and utilities, especially electrics. At least you'll find if there's anything wrong and you could use it to bargain the price down if it needs work done.

walter kranz said pretty much everything that needed to be said. I also think there was mention of getting in a home inspector before you signed any binding contracts -- that is SUPREMELY important. If it turns out that there are MAJOR issues with the property that NEED to be addressed and the improvements needed to correct those issues will end up breaking your financial back, then it might be best not to go into the property. But it sounds like you've lived there happily for awhile, so maybe those issues won't come up, and the inspection will just let you know where it is that you need to concentrate on when it comes to home repairs. (Also, if this property is older, the inspection will probably bring up all sorts of "this property is old" issues, e.g. the way the electrical plugs are set up. Most of these won't be particularly worrisome, but hopefully the home inspector will let you know which issues being raised are minor ones and which ones will probably need to be taken care of.)

PMI gets taken off automatically when you pay off roughly one-quarter of your principle, or you can request it be cancelled if your house has appreciated so that your remaining principle is around 3/4 of its value (I'm not sure if 75% is the right figure, but it's in that ballpark), though in the case of the latter there has to at least a two-year history of on-time payments built up.

Just thought I'd mention it in case it's an issue. With all the issues that buying a house entails, I had forgotten about the PMI thing until the closing day when I had to sign, so it was like getting reminded at the closing table that there was an extra $125/month that I had to factor in to my budget/be accountable for coming up with...

Apart from that, I'd say getting an inspection is essential, and get an inspection company with a great rep in the community. Also, I think it helps that you said your neighborhood is up-and-coming. I think the big thing about buying a house is buying one that you could envision being sellable (desireable) to others. A good general litmus test is asking yourself, "Would other people want to buy this house in the shape/geographic location that it's in now (in case I ever need to move)?"

Also, I'd say don't underestimate the yard/outside of the house, and the factors those might entail. Big shrubs that look like they could easily get unwieldy to manage? Trees growing over the house (which could be an easy entry point for animals/insects)? It's also good if you get to see the house on a rainy day, so you can get a sense of where the rainfall goes.

So many things to consider...good luck!

I would be curious as to why the owner is selling. If for example they bought the house cheap 30 years ago, it's completely paid off, and the rental income is more than the property taxes, I would wonder why they would sell. Is there a big problem they know about? Is the rental just too much of a hassle? There obviously won't be any clear answers to this but maybe you'll have a gut feeling about it if you learn more.

Get a realtor to help you out here. You know how much the rental income is since you live there but a realtor can help you find out what the current property taxes are, how much the owner originally paid, etc. You obviously need to get a different realtor from a different company than the one who is selling the house. Note that you don't have to pay them anything. They get 3% (I believe) when the house sells and I think in most cases the seller pays the realtor fees (does anyone else know for sure?).

It's worth mentioning that if the owner is asking 70k you don't necessarily have to offer that much. If 70k is a stretch for you but 60k would be a no-brainer, then make an offer and see what happens. Again, a realtor will help you out here with the necessary paperwork & everything. You can figure that at this point the owner would like you to buy it because otherwise he probably has to evict you and the other tenants and clean the place up to get a good price for it. It will definitely sit on the market for a while if he's trying to show it with people still living inside. So he's probably hoping that you'll buy at the asking price and save him a big hassle. You can probably use this to your advantage.

This brings up the big question: why this house? If you are really interested in buying, it probably doesn't make sense to settle on this house simply for convenience's sake. Have you looked around at other houses on the market in your area? It's likely that you can get a place for cheaper with no rental to hassle with. I wouldn't think about moving as a hassle so much as it being a cost (the cost of moving plus the cost of lost business) which you can then factor in when you compare this house to other places in the area.

And finally, when you figure out what your monthly costs are going to be, don't forget to factor in home insurance. I don't believe that's been mentioned yet.

Has anyone done geothermal energy? Both our furnace and AC unit are extremely old, and when you add up the cost of replacing them plus the modest energy savings plus all the incentives and tax credits, it might actually make economic sense for us to do. I guess the main environmental benefit is really that you are switching to electric and therefore have the future option of more sustainable power sources, although the pure energy savings is not meaningless.

I have an in-law unit that I rent out, and apparently it's not well-connected to central heating (one small corner vent that doesn't do much to heat the space), and so my tenant has to resort to using a space heater, and which, of course, is increasing our electric bill by a fairly large amount. I've looked around and as far as I can tell, space heaters are all going to run at 750W-1500W, so that's not a great solution IMO. Is my only real option getting a contractor to connect the unit to the central furnace?

Anyone dealt with property line issues? I have a very strangely shaped property where parts of what you'd think are my neighbors' yards are actually mine - they are literally separated from my yard by features (a retaining wall and large rocky/sloped area) and not even very easy to access from my yard - you kind of have to climb to them.

I have no immediate use for the area, and the neighbors' kids play in it and my neighbors are great people and I'm 100% fine with the current setup. The problem is I'm concerned that an adverse possession situation could come up down the line, more likely with a subsequent owner than them. Is there some way I could mark it as part of my property or put something on the land, maybe even something their kids could use freely, without having to fence it or put stakes in the ground or something? Maybe I need to talk to a lawyer.