Considering pulling the trigger

[EconProf]

Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.

[mercedes7]

[quote=DWCAP]First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.[/quote]

DWCAP,
Let me clarify. I have not felt like I have been throwing money away the last 3 years. In fact I made a decision to rent precisely because I felt I would be throwing money away by buying. Unfortunately, with the way the market is now and has been this year, it looks like, at least superficially, that the market has bottomed. There are many people even on this forum who believe that. I was NOT one of them, but began questioning myself as I watched the market.

I am currently renting a sfr in OB for $1995. The house itself is ok at best, but I have a view of the ocean from every room in the house. It’s safe and comfortable for me, but it is so much more than I need. Interest on my savings almost paid the rent the first year so I didn’t think too much about it, but now I am getting practically nothing on my money. So, that is why I made the statement “throwing money away renting”. I actually think I should move to a less expensive rental so that I can save more money each month. With my substantial down payment, my PITI and HOA on the house I was considering would be ~1300/mo. I really hate moving, but feel like I could rent someplace a lot cheaper and save the difference. However, if I am going to buy in the next 6mo to a year, it doesn’t make much sense to move twice.

Everyone has given me much food for thought and I REALLY appreciate it.

[mercedes7]

[quote=DWCAP]First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.[/quote]

DWCAP,
Let me clarify. I have not felt like I have been throwing money away the last 3 years. In fact I made a decision to rent precisely because I felt I would be throwing money away by buying. Unfortunately, with the way the market is now and has been this year, it looks like, at least superficially, that the market has bottomed. There are many people even on this forum who believe that. I was NOT one of them, but began questioning myself as I watched the market.

I am currently renting a sfr in OB for $1995. The house itself is ok at best, but I have a view of the ocean from every room in the house. It’s safe and comfortable for me, but it is so much more than I need. Interest on my savings almost paid the rent the first year so I didn’t think too much about it, but now I am getting practically nothing on my money. So, that is why I made the statement “throwing money away renting”. I actually think I should move to a less expensive rental so that I can save more money each month. With my substantial down payment, my PITI and HOA on the house I was considering would be ~1300/mo. I really hate moving, but feel like I could rent someplace a lot cheaper and save the difference. However, if I am going to buy in the next 6mo to a year, it doesn’t make much sense to move twice.

Everyone has given me much food for thought and I REALLY appreciate it.

[mercedes7]

[quote=DWCAP]First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.[/quote]

DWCAP,
Let me clarify. I have not felt like I have been throwing money away the last 3 years. In fact I made a decision to rent precisely because I felt I would be throwing money away by buying. Unfortunately, with the way the market is now and has been this year, it looks like, at least superficially, that the market has bottomed. There are many people even on this forum who believe that. I was NOT one of them, but began questioning myself as I watched the market.

I am currently renting a sfr in OB for $1995. The house itself is ok at best, but I have a view of the ocean from every room in the house. It’s safe and comfortable for me, but it is so much more than I need. Interest on my savings almost paid the rent the first year so I didn’t think too much about it, but now I am getting practically nothing on my money. So, that is why I made the statement “throwing money away renting”. I actually think I should move to a less expensive rental so that I can save more money each month. With my substantial down payment, my PITI and HOA on the house I was considering would be ~1300/mo. I really hate moving, but feel like I could rent someplace a lot cheaper and save the difference. However, if I am going to buy in the next 6mo to a year, it doesn’t make much sense to move twice.

Everyone has given me much food for thought and I REALLY appreciate it.

[mercedes7]

[quote=DWCAP]First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.[/quote]

DWCAP,
Let me clarify. I have not felt like I have been throwing money away the last 3 years. In fact I made a decision to rent precisely because I felt I would be throwing money away by buying. Unfortunately, with the way the market is now and has been this year, it looks like, at least superficially, that the market has bottomed. There are many people even on this forum who believe that. I was NOT one of them, but began questioning myself as I watched the market.

I am currently renting a sfr in OB for $1995. The house itself is ok at best, but I have a view of the ocean from every room in the house. It’s safe and comfortable for me, but it is so much more than I need. Interest on my savings almost paid the rent the first year so I didn’t think too much about it, but now I am getting practically nothing on my money. So, that is why I made the statement “throwing money away renting”. I actually think I should move to a less expensive rental so that I can save more money each month. With my substantial down payment, my PITI and HOA on the house I was considering would be ~1300/mo. I really hate moving, but feel like I could rent someplace a lot cheaper and save the difference. However, if I am going to buy in the next 6mo to a year, it doesn’t make much sense to move twice.

Everyone has given me much food for thought and I REALLY appreciate it.

[mercedes7]

[quote=DWCAP]First off, I really dont understand the ‘throwing my money away renting’ mentality. Everyone needs a place to live, and everyone pays for it. If you are that unhappy renting, I submit you may be renting the wrong place. Owning a home is generally more expensive than renting on a month (compared to) month basis, so without appreciation or a 30year payoff, One could argue that owning is throwing your money away.
(I am mostly trying to show you that over the past 3 years, you have NOT been ‘throwing your money away’.)

As for worst case, that depends on the place you buy. How far is it from major employment centers, how old is it, how many other units are up a creek without a paddle? (How long will Americans allow our government to saddle future generations with debt they have little hope of ever REALLY paying back?) Some areas of SD have reset, others (I believe) are re-bubbleing, and some are still falling. Townhouses in Carmel valley are a different world than townhouses in Spring Valley.[/quote]

DWCAP,
Let me clarify. I have not felt like I have been throwing money away the last 3 years. In fact I made a decision to rent precisely because I felt I would be throwing money away by buying. Unfortunately, with the way the market is now and has been this year, it looks like, at least superficially, that the market has bottomed. There are many people even on this forum who believe that. I was NOT one of them, but began questioning myself as I watched the market.

I am currently renting a sfr in OB for $1995. The house itself is ok at best, but I have a view of the ocean from every room in the house. It’s safe and comfortable for me, but it is so much more than I need. Interest on my savings almost paid the rent the first year so I didn’t think too much about it, but now I am getting practically nothing on my money. So, that is why I made the statement “throwing money away renting”. I actually think I should move to a less expensive rental so that I can save more money each month. With my substantial down payment, my PITI and HOA on the house I was considering would be ~1300/mo. I really hate moving, but feel like I could rent someplace a lot cheaper and save the difference. However, if I am going to buy in the next 6mo to a year, it doesn’t make much sense to move twice.

Everyone has given me much food for thought and I REALLY appreciate it.

[mercedes7]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

You are exactly right. I had even thought of buying a very small 1 br condo (cash) that I would live in for the next 2 years until the real estate market fully corrects (if it ever does) and save a huge portion of the money I am currently paying in rent. Then in a few years, when I found a sfr I really like, convert the condo to a rental (with a positive cash flow since it is paid for). Down side to this is that I would lose a portion of my down payment on the sfr paying for the condo, but I will be saving a portion of that back over the next two years. I am just trying to maximize my savings/income and rates on savings right now are just terrible. So yes, this is my thinking and one of the many reasons I considered pulling the trigger right now. I am really not sure what to do though. I could be happy in the place I found even though it is not a sfr and I would be saving more than I am now. I just don’t want to be sorry that I wasn’t patient for a little longer.

[mercedes7]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

You are exactly right. I had even thought of buying a very small 1 br condo (cash) that I would live in for the next 2 years until the real estate market fully corrects (if it ever does) and save a huge portion of the money I am currently paying in rent. Then in a few years, when I found a sfr I really like, convert the condo to a rental (with a positive cash flow since it is paid for). Down side to this is that I would lose a portion of my down payment on the sfr paying for the condo, but I will be saving a portion of that back over the next two years. I am just trying to maximize my savings/income and rates on savings right now are just terrible. So yes, this is my thinking and one of the many reasons I considered pulling the trigger right now. I am really not sure what to do though. I could be happy in the place I found even though it is not a sfr and I would be saving more than I am now. I just don’t want to be sorry that I wasn’t patient for a little longer.

[mercedes7]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

You are exactly right. I had even thought of buying a very small 1 br condo (cash) that I would live in for the next 2 years until the real estate market fully corrects (if it ever does) and save a huge portion of the money I am currently paying in rent. Then in a few years, when I found a sfr I really like, convert the condo to a rental (with a positive cash flow since it is paid for). Down side to this is that I would lose a portion of my down payment on the sfr paying for the condo, but I will be saving a portion of that back over the next two years. I am just trying to maximize my savings/income and rates on savings right now are just terrible. So yes, this is my thinking and one of the many reasons I considered pulling the trigger right now. I am really not sure what to do though. I could be happy in the place I found even though it is not a sfr and I would be saving more than I am now. I just don’t want to be sorry that I wasn’t patient for a little longer.

[mercedes7]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

You are exactly right. I had even thought of buying a very small 1 br condo (cash) that I would live in for the next 2 years until the real estate market fully corrects (if it ever does) and save a huge portion of the money I am currently paying in rent. Then in a few years, when I found a sfr I really like, convert the condo to a rental (with a positive cash flow since it is paid for). Down side to this is that I would lose a portion of my down payment on the sfr paying for the condo, but I will be saving a portion of that back over the next two years. I am just trying to maximize my savings/income and rates on savings right now are just terrible. So yes, this is my thinking and one of the many reasons I considered pulling the trigger right now. I am really not sure what to do though. I could be happy in the place I found even though it is not a sfr and I would be saving more than I am now. I just don’t want to be sorry that I wasn’t patient for a little longer.

[mercedes7]

[quote=EconProf]Mercedes7 you say you can put 2/3 of the purchase price as a down payment. This suggests you are getting pretty tired of getting 1 – 3% on your savings, right? This is budging you into the category of possible buyers.
I mention this because it strikes me that the puny interest rate that high-liquidity investors are getting on thier money may be pushing a lot more people onto the buy side–both for residential and commercial real estate.
We are seeing more cash buyers out there, who do the pro forma numbers on a possible purchase and discover they can, even with reduced rental income, make a relatively decent rate of return on a purchase. This applies to apartments, and especially CRE for the more adventuresome. Adds up to one more factor suggesting we are at the bottom of the cycle.[/quote]

You are exactly right. I had even thought of buying a very small 1 br condo (cash) that I would live in for the next 2 years until the real estate market fully corrects (if it ever does) and save a huge portion of the money I am currently paying in rent. Then in a few years, when I found a sfr I really like, convert the condo to a rental (with a positive cash flow since it is paid for). Down side to this is that I would lose a portion of my down payment on the sfr paying for the condo, but I will be saving a portion of that back over the next two years. I am just trying to maximize my savings/income and rates on savings right now are just terrible. So yes, this is my thinking and one of the many reasons I considered pulling the trigger right now. I am really not sure what to do though. I could be happy in the place I found even though it is not a sfr and I would be saving more than I am now. I just don’t want to be sorry that I wasn’t patient for a little longer.

[sdrealtor]

The only thought I had was $1995 for an sfr rental in OB with an ocean view from every room? Can you let me when your leaving….

[sdrealtor]

The only thought I had was $1995 for an sfr rental in OB with an ocean view from every room? Can you let me when your leaving….

[sdrealtor]

The only thought I had was $1995 for an sfr rental in OB with an ocean view from every room? Can you let me when your leaving….

[sdrealtor]

The only thought I had was $1995 for an sfr rental in OB with an ocean view from every room? Can you let me when your leaving….

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