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Buying a house

Discussion in 'OFF TOPIC' started by ScotsRam, Dec 3, 2016.

  1. ScotsRam

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    Hi ROD.

    I have recently accepted a job in Edinburgh and am now looking to buy my first ever House. I have seen a beautiful place that I am desperate to own but it's literally right at the very top of my price range.

    My question is, do I stretch myself for the perfect property (with great rental/resale value) or do I buy somewhere that's like 75% as awesome but 75% of the price...?

    Your experience/opinions would be really valuable because I am so torn right now.
     
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  2. bluecoconuts

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    Are renovations a realistic option? I would worry about stretching my budget too far in case of emergency, but if the place is likely to have better resale/rental ability then that would help. If the place that is 75% as good will also have good resale and rental ability, and renovations can make it perfect at a better price, that could help.

    How are the neighborhoods? Big difference or no? Will the perfect property leave you no wiggle room for emergencies or is it just at the top of your budget after you factored in costs for other things?

    What are the ages of the properties? What kind of issues could you have with structure or pipes/electricity?

    Also post some pictures if you can, just for shits and gigs!

    If you're going to be living there for a long time, you want to make sure you like it. Little things you overlook or brush off now could come back to make you hate it in a few months/years.
     
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  3. Selassie I

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    How many other places have you looked at ?
     
  4. Dieter the Brock

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    Great news ScotsRam!!!!
    Congrats first off
    Thanks for the invite. I'm 44 and have purchased a total of 4 properties and I would be more than happy to break down my experiences as best I can. I will start with my dream home. The house I currently live in and work my way back to suck.

    THE BEST PLACE EVER
    The place i live now is the best ever - 60+ acres, just 15 miles outside of Austin proper,

    First off I pay no taxes on the property outside of the land my home sits on thanks to what they call an AG Exemption. An AG Exemption means you need to run a certain amount of animals on the land for it to qualify. I think it breaks down to like 4 animal units per 50 acres (more or less) which means like 2 horses, 3 cows, 6 goats or sheep, 10 turkeys etc.... There is also a "wilderness" exemption they have but who wants to hang birdhouses when you can hang with God's majestic beasts. I ranch cows and that is totally fun cause I raise Longhorns who are a native breed that works well here, and are just beautiful beasts so you get a to pay zero taxes for the huge swaths of land you own and you can have a few beers, sit in a chair, and trip out on them as they mow your land for free. And then you can eat there babies. And that is something that makes it even better. So these beautiful momma cows have their little youngsters. And you get 3 heifers and 2 bulls. Well you know you'll either keep or sell of the girls while you will send the young bulls to the butcher or to the stockyards to eventually be butchered. Either way you have a commodity on your hands. No horses. nobody wants to eat a horse. And those are nasty creatures. The cow is steady beast you provides you not only tax incentives but high quailty food. Nothing like saying grace and mentioning the cow you have just roasted over the open flame to perfection. So anyway. i have my own well and rainwater system, plus i have no restrictions on my property, which means i can do anything i want here within reason (nobody can tell me what to do) -- so aside from the natural beauty of the ranch, the area itself has become highly desirable. Dripping Springs ranks 5th in fastest growing places in the USA
    https://www.texastribune.org/2016/03/24/suburban-population-counties-surge-texas/.
    I got in here in 2008 when the US Stock market took a crap. I could never understand stocks so i never invested in them so when all hell broke loose i had cash and a cash flowing enterprise. With those two things going for me i was able to by the inital 50 acres

    The deal on this place was special. Cause the banks were taking a crap at the time, and the dude selling it was some son of an old rancher who just wanted the cash to get away to Vegas and live like a king, yet didn't want to pay taxes. So we asked the guy if he wanted to "carry paper" and that sort of means the owner owning the place outright would act as his own bank, and as long as the title company accepted it we were good. So the bet for the owner was we would default and he would take back the property and be able to sell it again, and for us we managed to work a deal out with him that we would pay straight up cost and no interest on the loan - which was mindblowing to me that someone would bet I would fail so hard not to demand interest. Anyway, I got that thing paid off in 2 years and the property has gone up in value from 500k to over 2 million in the course of what, 2008 to 2016 - like 8 years. So I really made out. Then we build the house ourselves and did saved even more money.

    So I guess the point I am trying to make is that this property is not only a great place to live, great location, great lifestyle, but the land is paying for itself in terms of water rights, AG exemptions, animals, etc... you name it, it is the best situation of all time.


    HORRIBLE LOSS 1

    The place I had purchased before this in 2006 was 4 acres of waterfront - bad ass
    I mean bad ass
    Dreams of waking up and just floating around or taking the boat out.
    Dreams of beer and wake boarding. Listening to great music as I watched the sunset taking rips...
    NOOOO
    okay so i pay 400k for the land in a pristine gated neighborhood only to have a record drought dry up the lake and leave my property a huge piece of shite. So needless to say this drought went on for 5 years, and knowing i would never build on it due to the extreme stress I dumped it for half what i paid for.
    Of course we were flooded the following year. But I don't care. I sucked at wake boarding.

    HORRIBLE LOSS 2 - OR WAS IT?

    I had to escape the suburban nightmare that was Steiner Ranch Subdivision - specifically

    It was located in a great place called Barton Creek Lakeside. Killer golf course ( i don't golf but still) and the lake a stones throw away. It was awesome and completely away from the nightmare I was hoping to leave. It sort of was half way country living and half way suburban living, cause it was large expansive spaces but with curbs. Curbs are the difference between suburbia and the country, that and weather or not your traffic signals are on strings. Well this place was a great place to raise the kids. We home-schooled them cause it was actually true about the schools being horrible. We had multiple offers on the house and refused them cause we didn't want to move. And that was a huge mistake. Cause there was a huge fire and it started right across the street from us and the north wind took it all they way across the county and into Travis just destroying everything in its way. Then we had the drought and the lake level dropped. So the entrance to the place that was once a pristine drive was now a chard hull and the lake was dry.

    We ended up taking a 100k hit on that house, just trying to unload that albatross for 4 years. Raccoons started living in it and building condos and subletting them to friends it was so bad. Some fool bought that house just like me. The biggest factor aside from the place being charred and having zero water was the fact it was not in Travis school district. So that kept all the moms out and zero resale while the rest of Austin boomed.
    Now it was outside of the "Travis County" school district


    1st PURCHASE

    I had originally flown out to Austin from LA multiple times but could never find a place that reminded me of home until I saw "STEINER RANCH" the subdivision of my dreams. i mean the prices were freaking insane, like 350k for a mansion with a great view. 2 new schools and a new high school being built down the road, amenities galore, a new supermarket opening up a mile from the entrance, etc...

    I did it.
    I paid 380k for a home back when you could state your income and still get a loan - way before the bubble burst. It was a great location. Great schools. The prices were sure to rise. All signs said great investment,
    So i get in there and it's a dream. The house is on the cul de sac and it has an epic view. Dream come true.
    We meet the neighbors and they are all young families with kids our kids ages. Perfect. They invite us to have drinks friday and we agree.
    We all meet in the cul de sac - right outside my driveway - and have drinks and get to meet everyone. It was really nice. Except it never freaking ended. And we ended up coming home from work on a Saturday to see 5 kids on big wheels in your driveway and a bunch of mad mothers with goblets of shiraz giving you the dick eye for daring to drive above 3 miles an hour. Then the poker game invite, where you reluctantly agree to go cause you don't want to be left out of the "group" and you have no idea how to play the game. You think this is what you should be doing you know cause you can't just hang with your wife, you need to hang with the guys. So I go play this poker and mistakenly beat everyone except the Poker Joe who actually knows what the heck he's doing.

    Anyway things turn sideways fast. Some guy named Glenn asks me if my wife is mad. I say "what do you mean?" And he goes on to tell me that all the women in the neighborhood think she hates them cause she declined the bunko invite.

    I sold that house for a small but nice profit and moved to the golf course home after that.


    SUMMARY

    If you are young, rent.


    *
     
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  5. RamFan503

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    My dad once told me to stretch to make house payments as I would continue to increase my income while the house payment did not increase. I doubled my money on my first two houses. Not working out so great on my third but interestingly, that is the one I scrimped on.

    One other thought. Don't buy the most expensive house/property in the neighborhood. It will generally only go up as fast as the lowest valued property.
     
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  6. RamFan503

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    You live in one hell of a rental. Oh wait! You're an old freak like me. :ROFLMAO:
     
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  7. RamFan503

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    :ROFLMAO::ROFLMAO::ROFLMAO: Oh that's freaking choice. We always chose the out of the way places but one of our best friends had almost the same exact situation. They bought a house BECAUSE everyone was out BBQing in the Cul de Sac when they looked at it. Come to find out, they had everyone on a schedule as to what weekend was their weekend and if you didn't do it, you had to reschedule soon. Then they found out that neighborhood watch meant "who was that visiting the Dudleys last week? They were partying on their deck the night they were scheduled to BBQ. Don't we have rules against them parking their boat in their driveway?" Ooh Boyee. Sign me up for THAT.
     
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  8. Boston Ram

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    I have made a living buying homes. If your single don't be a show off and buy something reasonable. My rule of thumb if you can't pay the mortgage with less than half a months pay take home you can't afford the home.

    For example: if you take home $3,000 a month you should not try to pay more than $1,250 IMO

    Good Luck!!!
     
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  9. dieterbrock

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    Is it a stretch based on your budget or the bank lending you approval amount?
     
  10. RhodyRams

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    I bought my vacation home in Rhode Island before I was married with plans to move before I got to old to enjoy it
     
  11. LumberTubs

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    Assuming Scottish mortgage lenders use the Bank of England base rate (I genuinely have no idea if that's actually the case) then your mortgage payments will be about as low now as they ever will be because the base rate is 0.25%.

    So if you were to buy the place you love, then you might just be able to afford the payments now but I would go fixed rate for as long as possible on the assumption that by the time the fixed rate period is up (at which point your mortgage payments are likely to increase cus the base rate isn't going to stay at 0.25% forever) then hopefully your income will have increased as well so that you're able to afford the (potentially) higher payments further down the line.

    Even if Scottish lenders don't use the Bank of England base rate then whatever the Scottish equivalent is will also probably be low.

    We just came out of one 5 year fixed rate period and into another and are saving ourselves £140 a month.

    Of course by choosing the second option that's only 75% as awesome, you lower your risk accordingly.
     
  12. fearsomefour

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    There are a couple of general rules I have followed....not always however.
    First property was a bit of an impulse buy....top end of the area pricing, almost nothing down, too expense. Ended up not being able to sustain that house.
    Since then some simple rules. 20% down, as Bostonram said don't buy at the top end of area if you are concerned about gaining worth. I set that mortgage about at 35-40% of take home. Also get rid of debt you have, other loans, credit cards ect. If you have managed to save a decent sized savings to offset unexpected expenses, this strengthens your position more.
    I know people that take home $2,200 a month and have an $800 dollar a month car payment. Impulse buys should be avoided with things you have to finance. To each their own, good luck.
     
  13. Ramhusker

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    #13 Ramhusker, Dec 8, 2016
    Last edited: Dec 8, 2016
    First of all, CONGRATS!

    A lot of things to consider when purchasing a home, especially your first one. The number one thing in my book is how well are you going to sleep after you purchase? If you are stretched financially by the purchase, you will learn to hate it in short order. How long could you live in it if you lost your job tomorrow and does it have enough resale intrigue to sell before that move would have to happen? If risk taking is part of your persona, all of that doesn't matter anyways so go for what your heart tells you because you only live once right? As far as practicality goes, if it is at the top of your budget window, it must be pretty close to perfect in your eyes to start. The last thing you would want to do is move in and start sinking more money into it. Does your current furnishings fit the house? Are you going to be compelled to make big ticket purchases early on to complement your new castle? Make sure you know all the power costs, tax costs, covenant costs, etc. up front so your new budget doesn't get blown up right out the gate. Remember, the more expensive the house, the more expensive the upkeep. Since this is your first house, I'd assume you won't live here forever. The best flip on a house is almost always from buying the smallest, cheapest one in a good neighborhood, preferably one that can be expanded if so desired by future purchasers. You can pretty much ask more than what it's worth solely because of the prices of the houses that surround it.

    And of course, nothing is more important than location, location, location. Good luck to you!
     
  14. ScotsRam

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    Offer verbally accepted... crap just got real.
     
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  15. HX76

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    I hope you went for the one you really liked? Congrats on moving to Edinburgh and the offer being accepted. I think I'm right in thinking you can't be gazumped up there?
     
  16. LesBaker

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    Im confused.

    Booty thread or house thread?

    :thinking:
     
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  17. LumberTubs

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    Yep acceptance of an offer in Scotland is effectively the exchange of contracts so you're committed. I learned that off Phil and Kirsty.
     
  18. ScotsRam

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    Mortgage approved!
     
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  19. HX76

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    With the Clydesdale Bank?
     
  20. ScotsRam

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    Nationwide.