OT - Buying a House

[polycom]

This thread has solidified my thoughts on renting for the foreseeable future.

 

[methodology]

Funny part is throughout this whole thread no one has even mentioned how much of a pain in the ass it is buying a house with erything they ask of you/ ask to see non stop through the process up to closing. They need the stuff over and over again immediately and then take forever getting back to you on their end.

 

[8893]

I keep thinking this thread title is “Buying a Horse.”

I am now convinced that’s a better investment.

 

[MadDogRevival]

Septic systems have shelf life and can hinder house expansion. Nervous to own but it is nice to be self-reliant.

But really, with today's tech, septic systems are much more reliable, if you're reasonable about it.
Modern HE washers, flow restricted showers, low flush toilets. Really, even a septic field on its last legs should be able to be nursed along for a very long time. Rip out the food grinder in the sink and get a composter! I'm being serious.
If it's any consolation, every new install out here is either a sand mound (14k and hideous) or a chlorine treatment (20k and ridiculous). In grounds are being hounded out of existence by the .gov.

 

[methodology]

I keep thinking this thread title is “Buying a Horse.”

I am now convinced that’s a better investment.

My wife's sister spends 12k/yr for boarding and rides the damn thing maybe 2 times a year. Refuses to get rid of it even though she only visits it maybe 6 times/ year

 

[whaler11]

This thread has solidify my thoughts on renting for the foreseeable future.

As an old person I feel some responsibility to your generation.

Buying a house in Connecticut in 2018 comes with a negative expected value.

Unless you’ve got a spouse and kids combined with two solid well paying jobs do not invest in a house in Connecticut.

If you’ve got a spouse and children buy in a top 15 school system, that will limit your losses and you’ll get some ROI from the schools.

If you aren’t married and aren’t making incredible money get the hell out of here.

 

[superjohn]

I'm certainly not a financial adviser and I have no idea about the conditions in CT, but I'm really surprised that your house has only appreciated 5% in 15 years. I know there was the bubble burst in that time but I thought most places had increased significantly since the bottom. I was fortunate that I got my home in 2010 and it's appreciated 80% since then. Even if I go back to the price it sold at in 2006 before the bubble, it's still up 30% since then. Add in the tax benefits of interest and property tax (which may be more limited in 2018) and the fact that when you sell, most or all of the profit isn't taxed and I can't see a reason not to buy a house if you can afford it.

My advice for a 25 year old person with the means to buy a house:
1) Get rid of all debt - particularly credit card debt. There's no reason to pay double digit interest on money you don't have. Low interest car or student loan debt is more tolerable but you still want to get rid of it as fast a possible. Pay off the higher interest debt first while maintaining the lower interest debt. Eat raman, get rid of as much of luxury things you can live without, put on a sweatshirt and turn down the heat and pay off as much debt as you can. You have your 40s and beyond to be comfortable.
2) As to the 50/30/20 rule, there's no reason to spend 30% on things you want at that age - lower it. Your late 20s early 30s will still be amazing without spending 30%.
3) Don't get married or have kids until you can afford it. You're going to live longer than you parents and way longer than your grandparents. 40 plus years with a spouse is more than enough - wait until you're 35 or so. Your kids will be out of the house when your 60-65 - that's good enough.
4) Go ahead and live with someone who can do 1) and 2) above until you're ready to have kids and can afford it.
5) If you can do 1) and 2) go ahead and buy a house as soon as you can. Buy the worst house you can afford and can fix up in the best neighborhood you can find. If you are handy, you can create at ton of equity/worth in a fixer - particularly if you don't have kids to deal with. Know your limits. It's stupid expensive to find contractors for things you can't handle.
6) Sell your first house in 2 to 5 years depending on market conditions. If you can get 250k in profit, it's not taxable. That profit is in your pocket tax free.
7) Take the profit and equity and buy the next worst house you can fix in the best neighborhood you can find. You have 5 years this time because you can only take the free tax from profit once every 5 years.
8) Rinse repeat buy, fix, sell every 5 years until you have enough money to buy the house you want to spend the rest of your life in. You can turn about 5 houses over between 25 and 47 or so. If you get married in that time frame, you take 500k in profit without taxes. If you do it right, by your late 40s, you can buy a great house with no mortgage.
9) Make sure you never get emotionally attached to a house so that you can't do the 5 year turn over. It's all a means to an end.

Good luck!

I know the market has been terrible for sellers in Northwest Connecticut for a longtime. New Yorkers aren't going up there to buy second homes like they used to and there is zero economy up that way, no young familes moving in. From all these posts it sounds like the whole state is dead which makes sense with all the economic problems and jobs leaving.

 

[Jaker]

Condo's are ok until some major defect is uncovered and the entire community gets stuck with a huge assestment to make repairs.

 

[CTBasketball]

What about Cheshire?

 

[UConnDad]

This is one of the more interesting OT threads on here. Some great advice. There is a lot to consider. I've been through 2 home purchases and one vacation home, dealt with septic issues, major addition, learned about the reality of dealing with contractors, and expanded my expertise in numerous trades. Keep in mind your house will always have things to maintain, fix, and upgrade. One thing to point out is current interest rates are still historically low. This can make a big difference in affordability now and in the future. You will learn so much from this process and home ownership. Good luck.

 

[the Q]

Condo's are ok until some major defect is uncovered and the entire community gets stuck with a huge assestment to make repairs.

Nothing is perfect. But it’s probably better than home ownership for most.

 

[methodology]

What about Cheshire?

Cheshire is nice just have feeling you will be hard pressed finding what you want in your 250k range

 

[Excalibur]

What about Cheshire?

Anything in the price range you’re looking for will likely need major work, even though the prices of the roughly 10,000 1960’s era colonials in town have come down a bit.

 

[CTBasketball]

Interest rates definitely play a factor. I was quoted well below 4% back in February and I know those will rise.

 

[fatlucy]

I'm a developer. We study demographics and buying trends. We develop mostly multifamily and hospitality but we're looking at land now in preparation for building entry level housing for young families and retiring Boomers on the next 5-10 years in CT. A large segment of the millennial generation comprised of 80m people is going to start having kids, the majority of the 70m Boomer generation is getting ready to retire, at least part time.

CT has one of the best school systems and quality of life in the country. Millenials will move here if we have less expensive entry housing (multifamily/starter homes) in the good school systems and boomers will stay at least part time if we give them housing that's affordable enough that they can spend part of their time in warmer climates or traveling.

The cost of educating the millennials is going to drop substantially over the next 10 years to the point where our cities and towns will be closing school regularly. Its not (in large part) because people are moving out (CT has a pop growth of ~1.5%), its because the biggest demographic of kids our country has ever seen is aging out of high school and college. This will help the state get out of its fiscal nightmare.

Barring huge increases in interest rates, additional government screw-ups or some unforeseen problems, CT home values should be rising steadily for the next 15 years.

Buy a reasonably priced house in a town with an excellent (not ok or average) school systems near an excellent healthcare system. Buy the smallest least expensive house in a good neighborhood. If you can buy near a walkable downtown, you're way ahead of the game.

Don't overspend on big. Big is a financial mistake and really only boosts your ego. Buy program. Program elements are those elements you want in a house, like a kitchen, living room, # beds/baths, etc.. Buying a big McMansion is a huge mistake. Those McMansions that my competitors built like wildfire in the early 2000's were built cheaply and are not going to age well. They're not energy efficient and they cost a lot to maintain.

Flipping houses every 2-5 years for the next 15 years should be reasonably safe if you do it right.

 

[Husky25]

I lived in Manchester for 11 months in one of the Mills back in 1995 for 22 months. Ditched the lease early, with penalty, to GTFUDGEOUT.
Thought the place was a hole. Went there on a whim because it was rated highly in CT magazine and was between UConn and Hartford, where we studied and worked, respectively.
The day I wanted out was when I walked into a convenience store near the Mills and there were adult videos, with explicit cover scenes, by the front door on ready display.
That was the place where I bought my first handgun and started carrying it. Thought the schools were poor.
Long time ago and we really didn't spend much time out and about, so, granted, limited exposure, but I'd strongly recommend against - PM me if you want more details that would get this post deleted.

Which mill did you live in? I lived with a roommate in Clocktower for 4 years, from '99 to '03 and had a good friend in Velvet, before I moved across town. Apparently we had very different experiences. The worst part about the mills are the thin walls. The fire alarm seemed to go off 3 times a month as well. It was almost like a living in a dorm again. I'm trying to remember said convenience store, but I do not recall. I'll take your word for it, but it comes with a sideways glance. Either way, I'd be shocked if it was still there 15 years later.

At 22-30 years old, I cared not one iota about the schools. Didn't have kids. Didn't pay property taxes. At the same time, the quality of the school district plays no small part in the quality of community you choose. At this point in my life, I don't mind paying for it, especially when it will benefit my kids. I don't know what the taxes are in Manchester, but I can't justify paying taxes that mainly benefit public education, and then turn around a write a tuition check for private schools.

 

[GemParty]

Quick pitch. Any UConn fans buying or selling this year? My real estate network works throughout the entire country. Recent projects including New England, Florida, Missouri, Maryland.

Sold a Boneyard referral on a farm last year in Puerto Rico that didn't even have a formal address. Expired listing that had previously sat for months. Realtors showed it by lot number with longitude/latitude coordinates.

When you're on the move, shoot me a private massage. It's a good idea to interview multiple agents anyhow. Honored to earn your business.

Mike-

 

[Excalibur]

Quick pitch. Any UConn fans buying or selling this year? My real estate network works throughout the entire country. Recent projects including New England, Florida, Missouri, Maryland.

Sold a Boneyard referral on a farm last year in Puerto Rico that didn't even have a formal address. Expired listing that had previously sat for months. Realtors showed it by lot number with longitude/latitude coordinates.

When you're on the move, shoot me a private massage. It's a good idea to interview multiple agents anyhow. Honored to earn your business.

Mike-

Barring an unforeseen job change, we're staying where we are until the day that the youngest leaves for college. And I mean the day -- as soon as the car pulls out of the driveway, the "For Sale" sign goes in the ground.

 

[Jaker]

I built my last 2 homes, it's a very rewarding process.

 

[the Q]

The best I'd probably do is a condo because of the pointlessness of yard work.

Mowing is fine, it's all the bs around the house, like the plants, mulch and other nonsense, that is a complete waste of time.

 

[Dove]

Barring an unforeseen job change, we're staying where we are until the day that the youngest leaves for college. And I mean the day -- as soon as the car pulls out of the driveway, the "For Sale" sign goes in the ground.

What if they left as a commuter?

 

[Excalibur]

What if they left as a commuter?

She can find somewhere to commute from . . .

 

[UConnMike04]

A lot of the nice towns worth living in are still septic and wells. Just have to understand what it's about if you are coming from sewer/ city water

This 100%. Grew up on well/septic, went to my condo and it was sewer/city. Now our home in Monroe is well/septic. Fortunately for me (and unfortunate for previous owners), the septic system broke a week before closing. Our sellers had two options with us: either replace the entire system (tank, leaching field, etc) or we walk. Obv they had to replace it all (which we oversaw bc the work was completed after the closing). It was worked out that they didn’t get $20K of their $ until the whole system was completed, to our satisfaction.

As for the well, the pump broke the day before we were moving in so that was on us. However, it’s $2400 that will last us 15-20 years and mimics city pressure (new pumps released in the last year are built that way).

Only issue with well (since the pressure is now about equal to city with this pump) is not being able to run diff items at once (shower while dishwasher is on, etc) bc it’s too much pull for the pump. Also no water if you lose power (installing a whole home generator in the fall...this is our forever home hopefully, which will alleviate the no water issue).

Other than that it’s extremely easy. Lucked out with a new septic system at no cost, we just have to get it pumped every 2-3 years. With the well, every 2 months I buy Morton’s crystal softener from Home Depot for $10 and throw it in, that’s it. Plus no water bill.

 

[Madmannsucks]

When I lived in Conn Meriden was known for Ted's KKK rallies bikers and the downtown area that was featured in the movie Jackknife.

 

[ColchVEGAS]

A lot of hate for well/septic.

I bought my house 4 years ago and have not pumped the septic yet. Theoretically your septic may never need to be pumped as it relies on good bacteria to do its job and that takes time to build up. If your septic is functioning properly it should only need to be de-sludged/pumped every 3-5 years depending on size and how many people live in the house. It should only cost a few hundred at the most for that. Pumping too often is bad for your septic and could lead to early failure. The septic needs the bacteria so every time you pump you are getting rid of that good stuff. You should always avoid a garbage disposal with a septic too.

The only issue I had was the dry summer a couple years ago my shallow well was not recovering quick enough for our liking so we bit the bullet and drilled a deep well, 485' and a pretty penny later I now have two wells, one for the house and the original for use outside if needed.

In the long run without having to pay a water/sewage bill every month it is worth it for me.