Real Estate people: I want to buy a house, advice?

[Taylor Caby]

OP,

I was in your exact situation almost two years ago.

I'll give you some points to think about:

1) You won't make any money holding a place for 2-3 years and selling, not even close. Even if prices (somehow) do go up somewhat significantly over the next 3 years, your transactions costs, home improvements, repairs, taxes, etc. will eat up any gains you see. Typically you'll want to hold on to a place for 5-6+ years to start to make it a +EV investment over investing the $ and renting, and that is with historical RE returns, which I don't think we will see anytime soon.

2) Don't underestimate how much it costs to maintain a house. You'd be surprised, and it's something you plan for when you are buying.

3) You'll spend a lot of time dealing with/worrying about/etc. issues that you won't have if you just rented a place.

All this said, here is what I'd do if I were you. I'd buy a place in a very good location within Austin that had room for improvement. Not the nicest place, but a place that has some space with which you could improve (adding a pool, rooms, finished basement, landscaping, whatever).

I'd try to find some roommates, and rent out a bedroom or too. If this isn't possible, not a big deal, but it'd be nice to have.

Finally, I would commit to owning the place for 5 years, barring something unforseen in your financial situation. Over the first year or two, I'd make some small improvements in the house and monitor the market situation. If things look okay, I'd keep making improvements and then possibly start to look at acquiring another house.

If you decide to move within 5 years, you can always rent your place out and then go rent or buy somewhere else.

If you don't have a plan to hold for at least 5 years, I really doubt it is in your best interest to be buying a house. Yeah, it's cool to own a house, but realisitcally, it's one hassle you don't really need at 22. I wish I hadn't bought my house, so now when I am considering a move, I have to figure out a way to rent it out, or take a loss on my "investment."

At this point in time, I can't really see any situation where you should buy two houses. You seem to be very inexperienced in RE (not unusual or knocking you), our economy/RE market are going through very uncertain times, and you are 22 years old.

tc

[DesertCat]

I can't paste from my IPhone. But you can find the fortune article by searching the site.

And no one needs to buy a house. They need rationally gauge the cost of renting vs. buying and make the best decision based on their specific circumstances. Typically renting is cheaper than owning over the short run, but appreciation makes up for it. But today any appreciation looks very iffy over the next 2-5 years.

[Thremp]

[ QUOTE ]
2) Don't underestimate how much it costs to maintain a house. You'd be surprised, and it's something you plan for when you are buying.

[/ QUOTE ]

This is very true and depends a lot on the age of the property as well. New homes have far less repairs than older homes etc. Condos will have less than homes...

But yeah, it can cost a decent amount to fix the home back up to sell after living in.

[stephenNUTS]

Good post/advice Taylor

Stephen [img]/images/graemlins/cool.gif[/img]