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Buying house in USA - 2012 - Please share your pros and cons

Discussion in 'General Discussions - USA & Canada' started by MeenLoch, Jan 9, 2012.

  1. MeenLoch

    MeenLoch Silver IL'ite

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    I saw several threads about buying house in US posted in 2005 or 2009. I am posting this thread to talk about current scenario (2011/12).

    Last year people who purchased houses gained 8k in tax rebates. Perhaps it was good time to buy, but there was an added risk of job market.This year interest rates are still low abt 3 to 4%. It is still a buyer's market.

    Within Houston, the suburbs are still experiencing a 10% drop in rates thus making it suitable to buy a house. Central and 10 miles around Houston housing prices have remained stable and have even appreciated by 3 %.

    I wish to hear from people who recently invested in Houses. One obviously must think through job security, emergency funds, children education and retirement funds. If you are planning on returning to India, one should look at the resale values ( My guess is when the prices are low, you should stand to gain when they go up again).

    As a child I grew up in dad's quarters, which were like spacious apartments. Condos and town-homes are not bad investment ideas in my view, especially I am not too much into interior decorations or gardening. House is like a white elephant, where one needs to maintain it to keep it pretty especially when both partners are working. However it maybe nice when friends/family visit.

    Perhaps a systematic approach is to list pros and cons, list each in agreement with your partner and that will help you decide better. Like the title says, do share here your pros and cons.

    As for me
    pros to buying a house
    1. Plenty of space( I always wanted a separate room for hobbies and meditation ,a spacious kitchen and living room, room for my kid and parents etc, when friends come over to stay or for parties).
    2. Money well spent and not wasted away.
    3. Feeling of belonging to a community and good schools for kids
    4. Yard for gardening/relaxing/kids to play.

    Cons
    1. More money than I want to spare, just for the excess space ( taxes, interest etc..10K I have heard goes into taxes annually)..
    2. Fewer dollars left for traveling or other investments(like stocks , Indian real estate/ pursuits :) That delays when you can do things..
    3. Maintenance. I don't want to sound bad, but a friend says it s like being maid servant keeping it all in balance. Weekends would all be gone cleaning :)..in worst scenario
    4. Kids do not learn value of adjusting in smaller spaces and limited resources. They have high standards set early in life. My mom says that s not the case though, she says the kids wanting more is a good thing ( setting higher standards than what they grew up with is natural)...
    5. Tendency to accumulate junk unwanted items.

    If you already have a house, additionally please share steps to definitely think while we go through the process of buying houses and any mistake that you think I can avoid.
     
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  2. tashidelek2002

    tashidelek2002 IL Hall of Fame

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    How long do you plan to be at your current location? Will it be 5-10 years or more? This is the first basic point to house ownership.

    When you punch your figures, punch them in a worst case scenario and not a normal or best case scenario. If you cannot make it if life blows up on you (which it will just how is the question) then you cannot afford to buy.

    Do NOT plan on the real estate appreciating or selling quickly. Just get that out of your mind. Factor in all the costs like taxes, insurance, increased utilities, water, garbage, etc and then figure out if it is better than renting. I have a property here in NYS and have spent $90k (taxes and insurance) just to keep it over the last 16 years. Woudln't a fixed deposit in India be a better use of that money?
     
  3. DST

    DST Bronze IL'ite

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    MeenLoch, you have started a good thread here. We are just thinking the same. Hope to get some infor from home owners here.

    Tina, I just have a question here. Do you say its better to stay & pay the rent $1300-1600(including utilities) in an apartment than buying a house?

    Mostly,I feel that kids should have enough space to play than anything else.
     
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  4. Ami

    Ami Silver IL'ite

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    plus...

    big space, kids pressure will come down as the other kids will start asking do you have home, basement etc.? saving money from the apartment rent as it is 1600 bucks here in NJ for a double bed room in a decent township, will keep the house until the kids are going to college, so a big satisfaction from the kids' point of view.

    minus...

    you have to cut down yr expenses or watch out for long trip(or sacrifice), after 5 yrs, constant repairs with big bills though you have started from the scratch, never ending buying/upgrading stuffs atleast for resale value, extra expenses like association fee, big amt of electricity/gas, peer pressure from the neighbors, will end up in buying more materials like two sets of hi fi sofas, b.fast, dinner table sets etc etc..cleaning the whole house all the time like a maid unless you have one atleast once in 2 or 3 weeks or strictly stick with only one or two bathrooms, going up and down right from shower everything..
     
  5. hometowngirl

    hometowngirl New IL'ite

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    If you are Buying a new house, low maintence expense, more property tax,high home insurence cost. Old House keep extra money for home improvements, landscaping , low property tax, owning a house has lot of unknown expense like flooding,hurricane, snow removal,landscapeing ,house cleaning , high Utility Bills.
    ex:In Edison NJ,Old House-40 year old used to cost $300,000 in 1998, 2004 value rose to 600,000, now it has dropped to 325,000.property tax for old house is 6/10,000/y new house 15/25,000/y based on house and property size.

    Apartments, Fixed monthly cost, less space, peace of mind
     
    Last edited: Jan 15, 2012
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  6. Sansub

    Sansub Bronze IL'ite

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    Good thread!!! Want to know what many others think and say...
     
  7. innapenn

    innapenn New IL'ite

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    I agree with hometowngirl.:thumbsup Well, at present economic crisis/recession,its really hard invest and spend wisely.However,weighing the pros and cons of buying a house will be a good idea.:) I have also read recently that individuals younger than 35 has hit particularly hard, with joblessness numbers double the national average. For 20 percent of parents of young adults, the challenging economy has been one aspect in their conclusion to help their children buy a house. I just came accross this article:More mothers and fathers helping their adult children buy homes . Parents are indeed concerned of their children's future.:coffee
     
  8. ZenSojourner

    ZenSojourner Silver IL'ite

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    You don't have to buy a big house; consider buying a smaller house with a small yard. It will reduce costs and maintenance. I don't understand why people want to go out and buy these mansions. It was a bone of contention with my husband - I wanted a smaller house, he wanted huge thing to show off to his friends, I guess. A house is a place to live, don't look at it as an investment. Look at it as protection against rent increases, that's ok, but thinking you should get a lot of profit when you sell is a big part of why the housing market bubbled and then burst. Your kids can learn to live with small space that is sufficient if that's what you buy; there is no need to go out and buy a great big white elephant of a house that will suck up all your time and energy and money just trying to fill it up with furniture and then having to clean around it.

    Unless you are willing to LOSE money, or are planning on living there for 10 years or more, don't buy a condo or other attached housing. In all the time I've been in the housing market here (decades) condos and attached housing have never sold well. If you're going to live in it for a very long time that's one thing, but if you think it will give you more flexibility for later sale, it won't. They're just not popular in this country like they are in Europe and other places.j

    Be careful of home owner's associations and fees - some home owner's associations are excessively intrusive and restrictive. Frankly I wouldn't consider moving into an area with a home owner's association at all, they're a pain and the fees can get really expensive, and you don't have a choice about joining. Condo fees can also be exorbitant, with extremely restrictive rules. I'd stay away from either situation. It's happened before, the home owner's association or condo association seems ok when you move in but then the people running it start changing rules and fees and it just gets to be like living under a dictatorship.

    Also this is at least the second time the housing market has collapsed in Houston - it collapsed in the 80's too and I had friends who went bankrupt because of it - got stuck with mortgages on houses twice what the house was worth, couldn't sell, couldn't keep making payments. So be careful of thinking you're going to make a profit when you sell. I think it's going to be a long time before the housing market recovers across the country, but particularly in that area.

    Just buy something modest - you'll get the advantages of home owner ship like privacy, the tax breaks and all without taking on high property taxes or having to spend all your free time vacuuming!
     
  9. Parukutts

    Parukutts Bronze IL'ite

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    what are your opinions about buying a townhouse ? i dont work and i am expecting and we are really fed up of moving and shifting apartments.and why the heck do they increase the rent when we renew our lease?? Apartment living is a hassle for me.

    we are open to buy houses like in range 250000-300000. but do think that townhouses are also a good option, if we decide to move from city.what are the differences between townhouse and condo and a single home ? keeping in mind that we would like to be in a community where there are indians ? if in future we are to give it for rent ,what are the obstacles for giving a house to rent and a townhouse to rent.
     

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