Comments on: How long should you own a home for? http://www.thickenmywallet.com/blog/wp/2009/07/28/how-long-should-you-own-a-home-for/ Everything to do with thickening your wallet Wed, 01 Feb 2012 15:44:00 +0000 hourly 1 http://wordpress.org/?v=3.3 By: qmanrei http://www.thickenmywallet.com/blog/wp/2009/07/28/how-long-should-you-own-a-home-for/comment-page-1/#comment-19294 qmanrei Sun, 09 Aug 2009 02:09:48 +0000 http://www.thickenmywallet.com/blog/wp/?p=1099#comment-19294 All depends on what you do with it and what you are buying. As well as what you are capable of. Few ideas off the top. 1. Buy with built in equity, at say a 25% discount at current market value and fix it up over two years and then sell it. 2. Buy property with a mortgage helper component - duplex rent out main floor live in basement and live mortgage free for two years. 3. Buy property and rent it out for two years, and rent out something else for yourself. Use the cash flow for your current rent. As a side note if I only had 24 months, I would probably do number 2 since I would need to have an exit strategy in mind. I would also look for a tenant who would be interested in a lease with an option to buy the property. Use the lease option money for the purchase and have a 2 year option on the property and avoid the realtor fees on exit. Take Care :) All depends on what you do with it and what you are buying. As well as what you are capable of. Few ideas off the top.

1. Buy with built in equity, at say a 25% discount at current market value and fix it up over two years and then sell it.

2. Buy property with a mortgage helper component – duplex rent out main floor live in basement and live mortgage free for two years.

3. Buy property and rent it out for two years, and rent out something else for yourself. Use the cash flow for your current rent.

As a side note if I only had 24 months, I would probably do number 2 since I would need to have an exit strategy in mind. I would also look for a tenant who would be interested in a lease with an option to buy the property. Use the lease option money for the purchase and have a 2 year option on the property and avoid the realtor fees on exit.

Take Care :)

]]> By: jack http://www.thickenmywallet.com/blog/wp/2009/07/28/how-long-should-you-own-a-home-for/comment-page-1/#comment-19256 jack Sat, 01 Aug 2009 12:12:33 +0000 http://www.thickenmywallet.com/blog/wp/?p=1099#comment-19256 A home should be owned as long as possible, buying and selling is just losing money. We have been taught to buy a condo, then 2 years later buy a TH, then 2 years later buy a semi and so on..this is nonsense..I have owned a TH and recently sold it..the next house I buy, I will stay there a long time..currently renting and will keep on renting until REAL prices return not this manipulated market due to low rates. A home should be owned as long as possible, buying and selling is just losing money. We have been taught to buy a condo, then 2 years later buy a TH, then 2 years later buy a semi and so on..this is nonsense..I have owned a TH and recently sold it..the next house I buy, I will stay there a long time..currently renting and will keep on renting until REAL prices return not this manipulated market due to low rates.

]]> By: Jerry http://www.thickenmywallet.com/blog/wp/2009/07/28/how-long-should-you-own-a-home-for/comment-page-1/#comment-19252 Jerry Sat, 01 Aug 2009 00:48:51 +0000 http://www.thickenmywallet.com/blog/wp/?p=1099#comment-19252 Nah, a two year stay would probably not lead me to want to buy a home, just for the hassle of selling it again so soon when I moved. Four years? Yeah, I would consider it. Longer than five, I'd say there's pretty solid insurance that I'd want to own. Jerry Nah, a two year stay would probably not lead me to want to buy a home, just for the hassle of selling it again so soon when I moved. Four years? Yeah, I would consider it. Longer than five, I’d say there’s pretty solid insurance that I’d want to own.
Jerry

]]> By: Dave C. http://www.thickenmywallet.com/blog/wp/2009/07/28/how-long-should-you-own-a-home-for/comment-page-1/#comment-19226 Dave C. Tue, 28 Jul 2009 13:02:16 +0000 http://www.thickenmywallet.com/blog/wp/?p=1099#comment-19226 I am not a home owner myself, but I would venture to say that the rental prices in the local market and the liquidity of the housing market as a whole would be possible indicators which might make short term home owning attractive. Though personally, I lean more towards the idea of a house being primarily a residence and expense, and not an investment vehicle. I am not a home owner myself, but I would venture to say that the rental prices in the local market and the liquidity of the housing market as a whole would be possible indicators which might make short term home owning attractive.

Though personally, I lean more towards the idea of a house being primarily a residence and expense, and not an investment vehicle.

]]> By: Traciatim http://www.thickenmywallet.com/blog/wp/2009/07/28/how-long-should-you-own-a-home-for/comment-page-1/#comment-19225 Traciatim Tue, 28 Jul 2009 11:26:59 +0000 http://www.thickenmywallet.com/blog/wp/?p=1099#comment-19225 Alright, I'll bite. Lets say for instance you purchase the home for $300000 You use $30000 down, you put $5000 in for other costs, and you sink $5000 in for renovations/updates or whatever. Your hour appreciates at 5% per year. Your mortgage payment (5%, 25 year, 10% down, includes insurance) is $1601.74 and property tax $3000/year. If you sell in 2 years you have paid 40000 in costs, plus 6000 in taxes plus 38442 in mortgage payments for a total of 88442. You receive 330750 for your home, and the real estate agents take 16500 in vulture fees, and you have to pay 263674 for your mortgage, assuming you were pretty open. That leaves you with 50576 that you walk away with, but you sunk 88442 in to the place meaning it cost you 37866 to live there, or 1577 a month . . . kind of similar to if you rented the place. How about after 5 years? You paid 40000 in costs, 15000 in taxes, plus 96105 in mortgage payments and I'll include an extra 5K for maintenance here for a total of 156105. You sell for $382884 the vultures take 19150 and you owe 243750 on your mortgage. You walk with 119984, but you paid 156105 for the place so it cost you 36121 for 5 years of living . . . 602 bucks a month. You going to rent a similar place for that? How about 10 years? 40000 in cost, 30000 in tax (I know, it will increase, but my estimate was high anyway), plus 192210 in mortgage. I'll include 15K in maintenance here for a total of 277210. You sell for 488668, vultures take 24450 and you owe 203235 which means you walk with 260983 but have paid 277210 making your cost of living for 10 years 16227, or 135 bucks a month . . . good luck renting. So, how is renting any better in any case? Of course, all my estimates are with a 5% yearly return, flat property taxes, sale by realtor at a 5% commission, and lots of other assumptions. Alright, I’ll bite. Lets say for instance you purchase the home for $300000 You use $30000 down, you put $5000 in for other costs, and you sink $5000 in for renovations/updates or whatever. Your hour appreciates at 5% per year. Your mortgage payment (5%, 25 year, 10% down, includes insurance) is $1601.74 and property tax $3000/year.

If you sell in 2 years you have paid 40000 in costs, plus 6000 in taxes plus 38442 in mortgage payments for a total of 88442. You receive 330750 for your home, and the real estate agents take 16500 in vulture fees, and you have to pay 263674 for your mortgage, assuming you were pretty open. That leaves you with 50576 that you walk away with, but you sunk 88442 in to the place meaning it cost you 37866 to live there, or 1577 a month . . . kind of similar to if you rented the place.

How about after 5 years? You paid 40000 in costs, 15000 in taxes, plus 96105 in mortgage payments and I’ll include an extra 5K for maintenance here for a total of 156105. You sell for $382884 the vultures take 19150 and you owe 243750 on your mortgage. You walk with 119984, but you paid 156105 for the place so it cost you 36121 for 5 years of living . . . 602 bucks a month. You going to rent a similar place for that?

How about 10 years? 40000 in cost, 30000 in tax (I know, it will increase, but my estimate was high anyway), plus 192210 in mortgage. I’ll include 15K in maintenance here for a total of 277210. You sell for 488668, vultures take 24450 and you owe 203235 which means you walk with 260983 but have paid 277210 making your cost of living for 10 years 16227, or 135 bucks a month . . . good luck renting.

So, how is renting any better in any case? Of course, all my estimates are with a 5% yearly return, flat property taxes, sale by realtor at a 5% commission, and lots of other assumptions.

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