Invest In House Or Wait 2022

Discussion in 'Money Matters' started by Isha85, Feb 27, 2021.

Buy now or wait

  1. Sell condo and buy house

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  2. Keep condo and invest in house

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  3. Wait until buyers market may get good deals

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  1. Isha85

    Isha85 New IL'ite

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    Hi All,

    I have been silent reader more than a decade, I request you all to provide your insight and suggestions. We brought 2bhk small condo in TX 5 years back, that is almost paid. We are thinking and stressing from last year to invest in house.

    Earlier My spouse was only source of income however from 2 years am able to secure stable job with median salary but stable. Now we are planning to buy house like 4 bhk with decent backyard. Now with high price in Texas, sellers market also high property tax my spouse is thinking to sell condo and buy house. However, I don't wish to sell condo and buy house. Am seeing condo as investment, As We are not interested in stocks/shares , don't have good knowledge. We are not considering to invest in india as we plan to settle here.

    My concerns-

    My older one will be in college in 8years , need to save for college funds as of now we are investing in 401k and roth IRA, we can manage his education expenses or sell condo during that time/ when need arises.
    My questions are -

    1. Is it good keep condo and invest in house considering Texas high property tax with both income
    2. Should we sell now and invest in house , if we sell condo we may not be able to afford another house.
    3. Wait until buyers market and invest after few years

    Ladies, please guide.
     
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  2. KashmirFlower

    KashmirFlower IL Hall of Fame

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    Renting condo, and saving that for kids college or paying off new home loan quickly I think good options.
    Waiting next year you see prices go up only for good school districts areas
     
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  3. Laks09

    Laks09 Moderator Staff Member IL Hall of Fame

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    There is no good decision when it comes to home buying. The market in TX is booming though.

    I heard the builders around here have wait lists a mile long. All available new homes are in communities outside the current suburbs. They allow zero negotiations. They are making as many houses in one community as possible. So back yards are completely out in communities in good school zones(they have patios). I have a realtor friend who told me the market hasn’t been this crazy ever. She put someone on a wait list and when his name came up, the price was up by 100k and they had to take it or leave it to the next person in the list.

    One house came up in my neighborhood this year. The seller has 50 bids by afternoon and had to close bids. We had someone knocking and asking us if we are willing to sell. People are willing to buy as is and pay a big difference from list prices in the area for good schools.

    Although not this bad, we did buy in a sellers market like this years ago. It did settle within a year. Houses started staying on the market for longer. With the influx of so many folks from CA, I’m not sure if this hype will settle this year or continue into the fall/winter months. Whatever it is, it’s a big risk buying for 200k above the actual value of the house. The current TX market, that’s what’s trending. People outbid the asking price by a lot and the list prices itself are above market rate.
    In TX, I urge caution. We don’t know if this will sustain but those of us who have been here through a couple of rises and falls are wondering how deep it will fall when it does.

    Regarding selling a house that you aren’t living in, this is the right time to sell. The market is really good for anyone sitting on a house in TX. If I had a second house, now is when I would sell and invest that elsewhere. After such a rise, we never know when the next high will be.

    For college, if you haven’t already done so, a 529 college plan is the best approach. In Texas you also have the texas tuition promise fund which guarantees in state tuition for public schools. People say that money can be invested in x mutual fund and made more etc but I personally thinking putting it away in such a fund is the best option. We started it late for our kid and paid a higher premium to be able to pay it off but it’s one less thing to worry about while going to school. Down side is it’s for undergrad tuition only(no room and board) and if the kid goes to a private college or outside state then you will need more than the fund.
     
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  4. Isha85

    Isha85 New IL'ite

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    Thank you Kashmir flower, yes we are looking to buy in good school zones which are priced at 100k above the market price and every two months +1% going up since 3 months, if the market continues this way it might be soon 100k more in next 2 years
     
  5. Isha85

    Isha85 New IL'ite

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  6. Isha85

    Isha85 New IL'ite

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    Thank you Laks for the detailed response. I agree each and every word that you said, also aware of bidding war in Texas especially for pre owned and good schools zones, we were thinking of booking new house which 100k higher now than that was 6 months ago. We are currently staying in the condo so not listing or thinking to sell, if we had another house I would have listed this condo and made good profit. We keep receiving in mail's if we are interested to sell this place. So the one we invested is in good locality even though old and small condo it's good worth than we paid for.

    Texas tuition promise fund seems to be interesting will check and get required information to move ahead, yes once college fees taken care one less thing to worry about.
     
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  7. Flyhigher

    Flyhigher Gold IL'ite

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    Not just Texas lot of southern cities and states real estate market is experiencing extraordinarily high demand fueled by years of high population growth and employment gains, lifestyle changes following the pandemic and record-low interest rates. According to experts residents from more expensive cities like San Francisco, New York City and Los Angeles will continue to migrate to Texas which will drive up existing home prices.

    As per housing experts current trend is sellers market. If you see more than 50% price hike to your property then it’s a seller mark. I don’t know how long this market trend continues or whether in future are you going see furthermore hike it’s hard to tell.

    When deciding whether to sell or rent, start with what your goals are, what you would do with the proceeds if sold, and what you will do to manage the house if you rent, and then proceed accordingly.
    1. Before selling or renting check your condo governance rules. Lots of condo associations give permission to specific number of property for investment or owner owned.
    2. Check how much you will earn by selling (after the related expenses) versus how long it will take you to make that same amount by renting the property. Then you can decide if the monthly income is worth the potential hassle of renting out a house. Calculate how much you are going to save after paying HOA/COA fees, property tax and property insurance, other maintenance cost.
    3. Check how many times the HOA/COA fee has raised till now. Is there any chances of raised in next 8 years.
    4. The age of your property raises maintenance costs and concerns. Assess in next few years what all the wear and tears are going to come to you as expenses like carpet change, plumbing, kitchen appliances, AC is major cost, water heater costs.
    5. Check what was the highest amount that condo sold till now other than the first time that sold as brand new.
    6. Check the rental boom in that neighbourhood. Does your property offers features/amenities that set it apart from other rentals in order to attract renters fast.
    7. Don’t forget about the tax consequences. Like any other income-producing asset, you will be taxed on any income you get from your rental at your ordinary tax rate.
     
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  8. Isha85

    Isha85 New IL'ite

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    Thank you Flyhigher. I agree people are moving from higher cost of living states to southern states. Our condo is in good locality even though old property it's in good condition. We were thinking to buy a house this year end and sell condo after 6-7years when kid go to college this was our plan.

    You introspection about what to consider before buying renting or selling are great inputs to consider and evaluate our decision to keep condo and invest house or sell and buy. We will observe realestate market closely and decide either to invest this year or in coming years.
     
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  9. Flyhigher

    Flyhigher Gold IL'ite

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  10. Ebenipada

    Ebenipada New IL'ite

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    I would have invested already, why wait.
     

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