Millennial Renters Unite

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Definitely Not A Cop
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12:16p, 5/16/22
AG
I got in back in 2020, and am deciding between selling, moving into a rent house, and DCA'ing my profits into a mutual fund, or buy a new house with more money down to lower my mortgage payment. I would probably end up in a smaller house than the one I'm currently in though, due to inflation.

What's the best option, in your opinion? I don't think the real estate market in Texas is going to get hit nearly as hard as other areas in the country if a recession is imminent. In fact, you might see even more people start moving here. The flip side is that I think we might be due for even more pain in the market the next 6 months.
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Ag CPA
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In reply to evestor1 • 1:34p, 5/16/22
AG
evestor1 said:
Ghost of Bizbee said:


At some point the market will stop paying these ridiculous prices for homes.



Read this to yourself in 5 years and see how far it gets you. Starter /reasonable homes rarely lose value like you are hoping.

If you are in the middle and upper market (500k and beyond) ... yes those will fluctuate.
The problem is those starter neighborhoods can quickly turn into hoods in a place like DFW where new homebuyers just decide to move out further and you are left holding a bag. Have seen plenty of this in south FW (and now north FW) the past 20 years and it did not take long to turn.
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JDCAG (NOT Colin)
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In reply to Definitely Not A Cop • 1:56p, 5/16/22
AG
Definitely Not A Cop said:
I got in back in 2020, and am deciding between selling, moving into a rent house, and DCA'ing my profits into a mutual fund, or buy a new house with more money down to lower my mortgage payment. I would probably end up in a smaller house than the one I'm currently in though, due to inflation.

What's the best option, in your opinion? I don't think the real estate market in Texas is going to get hit nearly as hard as other areas in the country if a recession is imminent. In fact, you might see even more people start moving here. The flip side is that I think we might be due for even more pain in the market the next 6 months.


Do you have to move?

Either option is likely going to be worse than being in a house you bought in 2020 which probably has a ton of equity already and a really, really good interest rate. Moving into a rental where the landlord likely just saw uncapped property tax increases of 50-100% is not likely to be a great savings and buying a new house certainly won't be. Obviously lots of factors here, but if you don't need to move, I would think sitting where you currently are probably makes the most sense.
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12thMan9
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In reply to LMCane • 2:48p, 5/16/22
AG
LMCane said:
Ghost of Bizbee said:
Who all is in this bucket that doesn't own a home?

Every day that passes I get more depressed about the housing market. Needs to be a crash soon, otherwise I don't know why I just won't continue to rent.

At some point the market will stop paying these ridiculous prices for homes.

Inflation blows

even if the prices come down a bit- you will still be paying higher than normal interest rates so your monthly and total payments are not going to be much lower.

other than 2009- home prices (in locations people want to live) really do not drop a significant amount.
"Normal interest rates" are relative to one's perspective. My wife & I bought our house the 1st time at 9.25% in 1994. Both sets of parents had collateral obligated as we were new in the working world.

Our 1st refi took us to 7%, the next to 4.25%, the last to 3.5%. That was 2016.

The 50 year average for mortgage rates? 7.78%

If you're renting, then you know what you can afford. Figure out if you can go higher. FHA 1st time buyers can put down as little as 3.5%. You can do low down payment on conventional as well. Figure out what you can, and want to do.
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Ghost of Bisbee
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In reply to The Pilot • 5:01p, 5/16/22
AG
The Pilot said:
I'm surprised you can find cheap rent somewhere that you can't find an affordable home. Our rent in Denver was only slightly cheaper than our mortgage.


Well, paying $2.7K mortgage/month in CA won't find you anything reasonable in northern cal to own, unless it's a townhouse 40 miles inland.
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Diggity
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In reply to Petrino1 • 5:05p, 5/16/22
AG
sounds cheap these days. You can't even find a crappy Camden apartment ITL for under 1200
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Petrino1
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In reply to Diggity • 5:53p, 5/16/22
Diggity said:
sounds cheap these days. You can't even find a crappy Camden apartment ITL for under 1200
Yea I moved here 5 years ago when rents were cheaper, and they havent raised my rent once in 5 years lol.
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Diggity
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In reply to Petrino1 • 5:57p, 5/16/22
AG
Yeah, I think I would stay too!
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AggiEE
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9:16p, 5/16/22
If you're not married and don't have a lifestyle preference to own a house, there's absolutely no need to do so and financially it can make a whole lot of sense to rent.

I have never owned a home and have taken the monthly savings and invested them into the market. I just prefer owning more diversified assets with higher expected returns, and renting does come with some perks if you do not care about home maintenance, yard work, etc.
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Aggie09Derek
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10:21p, 5/16/22
AG
Owning a house is overrated

It's good if you have a family and need the space/stability though

Despite what people say, renting is not "throwing away money"....
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Ogre09
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10:49a, 5/17/22
AG
I'm 35. I bought in 2011 (1 yr out of school) for $180k. House is worth $280-300k now. I owe about $90k on it now. Best financial move I've made.
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AgsMyDude
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In reply to Ogre09 • 11:18a, 5/17/22
AG
Same.

House we bought in '14 has increased 100%.

Rental in Bryan purchased spring of '20 has increased 75%.

Those 2 purchases have been fruitful.

Looking for another slam dunk rental but not so easy in this market.
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southernskies
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In reply to Ag CPA • 11:46a, 5/17/22
Ag CPA said:
evestor1 said:
Ghost of Bizbee said:


At some point the market will stop paying these ridiculous prices for homes.



Read this to yourself in 5 years and see how far it gets you. Starter /reasonable homes rarely lose value like you are hoping.

If you are in the middle and upper market (500k and beyond) ... yes those will fluctuate.
The problem is those starter neighborhoods can quickly turn into hoods in a place like DFW where new homebuyers just decide to move out further and you are left holding a bag. Have seen plenty of this in south FW (and now north FW) the past 20 years and it did not take long to turn.
oh fook I just bought it south FW
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Aggie09Derek
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In reply to Ogre09 • 12:59p, 5/17/22
AG
Ogre09 said:
I'm 35. I bought in 2011 (1 yr out of school) for $180k. House is worth $280-200k now. I owe about $90k on it now. Best financial move I've made.
Bought at a good time for sure...just never know

Also wonder how much more you've paid besides the $90k in equity total...

From 2011 avg to now you would have been up 4.5x+


Buying is not always a smart option - but yes for some people it makes sense and obviously if time the market right it can do very well.
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2:16p, 5/17/22
Ogre09
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In reply to Aggie09Derek • 2:48p, 5/17/22
AG
Definitely bought at a good time. Market has appreciated significantly since then, clearly. That wasn't linear, and I don't expect that average to continue, but I do expect it to continue appreciating.

Renting something similar would cost me about the same in monthly payments. Renting something much smaller would net me maybe $500/mo savings. Investing that savings continuously in S&P 500 index fund (averaged 12% growth the last 11 years) would have given me a balance of $135k. I'll take the $200k in home equity and the bigger house over that.
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utah, get me two
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9:32p, 5/17/22
im thinking more and more about a condo or townhouse
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texagbeliever
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In reply to Ogre09 • 9:41p, 5/17/22
Ogre09 said:
Definitely bought at a good time. Market has appreciated significantly since then, clearly. That wasn't linear, and I don't expect that average to continue, but I do expect it to continue appreciating.

Renting something similar would cost me about the same in monthly payments. Renting something much smaller would net me maybe $500/mo savings. Investing that savings continuously in S&P 500 index fund (averaged 12% growth the last 11 years) would have given me a balance of $135k. I'll take the $200k in home equity and the bigger house over that.

Just curious is that after property taxes?
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TxAG#2011
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9:44p, 5/17/22
I bought a small 1 bed condo in a nice part of Dallas about 5ish years ago and it's been great. Wish I had bought a house instead obviously but it makes a lot of sense now given prices.

Mine is so cheap <1k I can move to another city and not worry about paying for it.
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Jet Black
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In reply to Aggie09Derek • 9:57p, 5/17/22
Aggie09Derek said:
Owning a house is overrated

It's good if you have a family and need the space/stability though

Despite what people say, renting is not "throwing away money"....


True and I own my place.

I'm gen x and buying a home was beaten into my head growing up. It isn't always the right move.
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jamey
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In reply to Aggie09Derek • 10:08p, 5/17/22
AG
Aggie09Derek said:
Owning a house is overrated

It's good if you have a family and need the space/stability though

Despite what people say, renting is not "throwing away money"....


At retirement once the taxes stop going up much due to
homestead, it's worth it not to mention sitting on a nice asset.

My mortgage is 2600 and about 1000 of that is what I'd owe monthly if I owned the house outright

Mortgage rates are still in historic low range
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htxag09
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In reply to texagbeliever • 10:14p, 5/17/22
AG
texagbeliever said:
Ogre09 said:
Definitely bought at a good time. Market has appreciated significantly since then, clearly. That wasn't linear, and I don't expect that average to continue, but I do expect it to continue appreciating.

Renting something similar would cost me about the same in monthly payments. Renting something much smaller would net me maybe $500/mo savings. Investing that savings continuously in S&P 500 index fund (averaged 12% growth the last 11 years) would have given me a balance of $135k. I'll take the $200k in home equity and the bigger house over that.

Just curious is that after property taxes?

Property taxes, insurance, new AC, new water heater, etc.

I'm in almost identical a spot as ogre. Bought in early 2012, owe less than $80k on a house that's almost doubled in value and my mortgage is less than I could currently rent an apartment.

But that's really just luck. And even with those gains that ignores the tens of thousands of dollars of upkeep, taxes, maintenance, etc that homeownership requires.

I know plenty of people my age (35) that have been renting and they have been putting aside extra (not their savings or retirement) that equal most peoples equity.

I also know a **** ton of people who move every 3 years, ignore realtor fees, moving costs, taxes, etc, and just talk about how much equity they gained in their house so they "could" upgrade.

There are pros and cons for both. And people can be dumb about both….
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Aggie09Derek
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In reply to htxag09 • 10:38p, 5/17/22
AG
htxag09 said:
texagbeliever said:
Ogre09 said:
Definitely bought at a good time. Market has appreciated significantly since then, clearly. That wasn't linear, and I don't expect that average to continue, but I do expect it to continue appreciating.

Renting something similar would cost me about the same in monthly payments. Renting something much smaller would net me maybe $500/mo savings. Investing that savings continuously in S&P 500 index fund (averaged 12% growth the last 11 years) would have given me a balance of $135k. I'll take the $200k in home equity and the bigger house over that.

Just curious is that after property taxes?

Property taxes, insurance, new AC, new water heater, etc.

I'm in almost identical a spot as ogre. Bought in early 2012, owe less than $80k on a house that's almost doubled in value and my mortgage is less than I could currently rent an apartment.

But that's really just luck. And even with those gains that ignores the tens of thousands of dollars of upkeep, taxes, maintenance, etc that homeownership requires.

I know plenty of people my age (35) that have been renting and they have been putting aside extra (not their savings or retirement) that equal most peoples equity.

I also know a **** ton of people who move every 3 years, ignore realtor fees, moving costs, taxes, etc, and just talk about how much equity they gained in their house so they "could" upgrade.

There are pros and cons for both. And people can be dumb about both….


This.
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Ogre09
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In reply to texagbeliever • 6:19a, 5/18/22
AG
I included property taxes and insurance in my monthly payment.
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jamey
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In reply to Ogre09 • 8:39a, 5/18/22
AG
Ogre09 said:
I included property taxes and insurance in my monthly payment.


When I bought my first house in 2013 I went from renting at 1250 a month to a full mortgage at 1250 month.

Over the years after the rent where I use to live soared while my mortgage stayed ~ the same. Property taxes and insurance went up some but not as much as rent

I never had to replace an AC or roof but if I had I probably saved that equivalent in mortgage for rent trade off.

Imo the big benefit will be in retirement when I live in a house I own at a fraction of the cost(still got taxes and insurance) of
renting.

And sitting on a million dollar asset'(decades from now) isn't a bad side effect either in case I ever need money.


Hell, could probably sell the
house at retirement and put the cash in a brokerage account and let the investment yield alone pay my rent. Maybe do a year on a beach in Florida one year, mountains of Coloarado another year...etc
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coolerguy12
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In reply to utah, get me two • 9:45a, 5/18/22
AG
utah, get me two said:
Yep, sucks op. Lotta people I know lucked out with their homes and interest rates. I'm more savvy than the average millennial when it comes to finances and have stacked away a good amount but even the cheap houses I can't afford. That being said I don't see Texas home prices going down with all the millionaire out of staters moving in


Yeah you're more savvy than everyone else, all the people that did it right just got lucky. Keep telling yourself that champ. Maybe one day you will catch your big lucky break that the rest of us got by pure chance.
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utah, get me two
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In reply to coolerguy12 • 9:52a, 5/18/22
coolerguy12 said:
utah, get me two said:
Yep, sucks op. Lotta people I know lucked out with their homes and interest rates. I'm more savvy than the average millennial when it comes to finances and have stacked away a good amount but even the cheap houses I can't afford. That being said I don't see Texas home prices going down with all the millionaire out of staters moving in


Yeah you're more savvy than everyone else, all the people that did it right just got lucky. Keep telling yourself that champ. Maybe one day you will catch your big lucky break that the rest of us got by pure chance.
keep thinking you're a great investor and smarter than everyone else. I'm sure you just so magically timed the market perfectly to buy a house like the millions across the country. Maybe one day you'll realize that you're not as smart as you think you are
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LMCane
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In reply to Definitely Not A Cop • 9:54a, 5/18/22
Definitely Not A Cop said:
I got in back in 2020, and am deciding between selling, moving into a rent house, and DCA'ing my profits into a mutual fund, or buy a new house with more money down to lower my mortgage payment. I would probably end up in a smaller house than the one I'm currently in though, due to inflation.

What's the best option, in your opinion? I don't think the real estate market in Texas is going to get hit nearly as hard as other areas in the country if a recession is imminent. In fact, you might see even more people start moving here. The flip side is that I think we might be due for even more pain in the market the next 6 months.

agreed with the above.

I am in Maryland so the DC market usually will never fall.

I have been looking at homes on the coast of Florida and can see some are going down in price on Zillow.

I doubt that Texas will ever see a decline in cost as they have one of the highest growth rates of any state in the Union along with Florida.

keep the home you own and rent it out for passive income, and buy another cheaper home to live in.
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coolerguy12
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In reply to utah, get me two • 10:46a, 5/18/22
AG
utah, get me two said:
coolerguy12 said:
utah, get me two said:
Yep, sucks op. Lotta people I know lucked out with their homes and interest rates. I'm more savvy than the average millennial when it comes to finances and have stacked away a good amount but even the cheap houses I can't afford. That being said I don't see Texas home prices going down with all the millionaire out of staters moving in


Yeah you're more savvy than everyone else, all the people that did it right just got lucky. Keep telling yourself that champ. Maybe one day you will catch your big lucky break that the rest of us got by pure chance.
keep thinking you're a great investor and smarter than everyone else. I'm sure you just so magically timed the market perfectly to buy a house like the millions across the country. Maybe one day you'll realize that you're not as smart as you think you are


I'm a terrible investor. Very risk adverse and I hate messing with it. I did however get married early, waited to have kids, saved my wife's salary for a down payment, bought a starter home, used that equity plus continued saving of wife's income to upgrade 4 years later, and now rolling that home equity into our dream home on 6 acres 5 years later. So if buying a house 9 years ago makes me lucky I guess I'll take it. To me it's just common sense to own a house in most situations.

You can continue to brag on every board on TexAgs about how smart and savvy you are and just can't catch your big break. I'll continue not being smart and savvy and just doing the things that make sense.
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utah, get me two
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In reply to coolerguy12 • 10:54a, 5/18/22
I mentioned only on this thread once I am savvy and the only reason I sat I am more than the average millenial is because it's my profession. If I knew you would get so upset I wouldn't have said that. Second, you have two income streams coming in and we're able to save your wife's money how is that even a comparison to somebody who is single and has only one income stream. You lucked out by buying a house in the hottest market with super low interest rates. Nothing wrong with that, but quit thinking you're not lucky
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htxag09
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In reply to coolerguy12 • 11:14a, 5/18/22
AG
coolerguy12 said:
utah, get me two said:
coolerguy12 said:
utah, get me two said:
Yep, sucks op. Lotta people I know lucked out with their homes and interest rates. I'm more savvy than the average millennial when it comes to finances and have stacked away a good amount but even the cheap houses I can't afford. That being said I don't see Texas home prices going down with all the millionaire out of staters moving in


Yeah you're more savvy than everyone else, all the people that did it right just got lucky. Keep telling yourself that champ. Maybe one day you will catch your big lucky break that the rest of us got by pure chance.
keep thinking you're a great investor and smarter than everyone else. I'm sure you just so magically timed the market perfectly to buy a house like the millions across the country. Maybe one day you'll realize that you're not as smart as you think you are
I'm a terrible investor. Very risk adverse and I hate messing with it. I did however get married early, waited to have kids, saved my wife's salary for a down payment, bought a starter home, used that equity plus continued saving of wife's income to upgrade 4 years later, and now rolling that home equity into our dream home on 6 acres 5 years later. So if buying a house 9 years ago makes me lucky I guess I'll take it. To me it's just common sense to own a house in most situations.

You can continue to brag on every board on TexAgs about how smart and savvy you are and just can't catch your big break. I'll continue not being smart and savvy and just doing the things that make sense.
If you have bought and moved 3 times in the last 9 years and are still that ahead in equity after full consideration of expenses (closing costs, moving costs, taxes, upkeep, etc.) then, yes, I'd say that is pretty lucky. I would guess it's not standard over the course of history to be able to spend the tens of thousands of dollars required to buy a new home and move every 3 years and come out that far ahead equity wise.
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coolerguy12
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In reply to htxag09 • 11:28a, 5/18/22
AG
My point is, the people trying to time the market are the ones hoping to get lucky. The ones who have been in for a while and were able to capitalize on selling in a hot market set themselves up for success by taking a risk years ago. I bought my first house on a first time home buyer program with 5% down. Worked hard to get equity to 18% to get rid of PMI. Also refinanced a year in to a 15 year note. My wife wanted to rent in the heights and live the yuppy DINK lifestyle before we had kids. We made sacrifices to be where we are now.

Hedge has been complaining for years about how unfair it's all been for him. If he had bought a house 2-3 years ago with a low down payment and had roommates pay his bills he would be killing it right now.
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coolerguy12
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In reply to utah, get me two • 11:30a, 5/18/22
AG
Buy a house and get roommates. If I hadn't been married straight out of school I would probably have 3-4 rent houses by now. I promise you my wife slowed down my financial climb more than helped it.
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utah, get me two
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In reply to coolerguy12 • 12:00p, 5/18/22
3 years ago I was in college, how could I afford a house? Lmao. You're delusional dude, 3-4 houses lol you have 350k+ in cash for a down payment on all those houses. Are you listening to yourself
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coolerguy12
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In reply to utah, get me two • 12:14p, 5/18/22
AG
If I remained single for 10 years after graduation I would have absolutely bought a rent house every 2-3 years. Seems like a no brainer for people with steady income and plenty of time. But again, I'm not very savvy, I just do the things that seem obvious.
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