My lease is up at the end of September (7 months), so I need to make a move ASAP.
I’ll have my 15-20% down, depending on what I buy plus closing costs covered.
I’m pre-approved for a mortgage, I know what I can and cannot afford. I do NOT want to buy based on my approved amount, so I know that I’ll be good with whatever I buy.
I have two paths.
Do I…
Buy a double in the Kenmore/Tonawanda (under $125k) and live in it for a couple years, while recieving a decent chunk of rental income to cover the mortgage? Wait a few years and move out and then use the second unit I won’t be living in for additional income?
or
Do I just buy/build the house (over $200k) I want right now in the Williamsville/Clarence/East Amherst and most likely never have to move/buy/build again? This option also allows me to have a mortgage paid off when I’m 40-45 years old and MONSTER equity.
I won’t have to blow my entire nut if I go with option one, allowing me to save up a little longer and go with a bigger house in a few years. However, with mortgage rates where they are now, it seems like it’s a better idea to just buy what I want now…however, I’d be blowing my entire nut.
Being as I would never live in Kenmore or Tonawanda I would go number two. I think the better option is to get a double in a nice part of the city but you won’t get a nice neighborhood and nice double for near that price(in the city).
I personally am living in mine until I have the cash to buy the house I plan to raise a family in. Not playing the house jumping game so next will be 300k+ in a few years. So closer to your number one plan.
If you think you could build your first house and be satisfied enough to live in it forever, you might be in for a surprise.
I’ve asked people about this before and they all said the same thing. DO NOT build your first house if you plan to live there for a while. Get to know what it’s like to be a home owner and understand the things that you’ll want vs what you don’t want.
Option 1 and 2 really mean picking between 1 major difference: Do you want to be a landlord? If so, great, do it. It’s a great way to cover the cost of the mortgage while you’re living there and then have some additional income after. But if not, buy your first house, gain some experience and equity and move on when it’s right.
There is still a ton of value in the existing $200k market right now, stuff that is worth 250-300k in a good market. First time homebuyer and all that did nothing to help the more upscale market. Couple that with the interest rates and it is the chance of a lifetime. However if you stretch yourself too thin it will be a struggle and you could end up worse off even if you get a great deal. Particularly in a volatile industry, could be high-risk, high-reward.
I would not build as there is too much pent up supply on existing stuff that you can get better deals on, even if you have to mod a bit.
How comfortable would you be/how much safety net would you have left if you go option 2?
Kenmore/Ton are perfect for doubles because of the rent/taxes/house sizes are just perfect. I would never rent in the city, because all you’re going to get is college kids and riff raff 99% of the time and declining housing values. Plus a lot of them are 1 bedroom, 2 bedroom 2+ units.
I’d buy a nicer double, but then there’s no point because you won’t be receiving any rental income from it because you’re barely making enough to pay your mortgage. The more expensive the property, the less of a money maker it is.
I’m right now living in a loft, in the city, on the waterfront and paying a large amount of money every month. As much as I like the city, I don’t want any kind of property here.
You clearly are not looking at nice areas of the city. College kids and riff raff are not renting remodeled 900/mo places in parkside.
Funny though when i had a college house I RUINED it was a rental in Kenmore.
Glad you have this all figured out though.
It is all about what you want to come home to at night. Obviously you understand this or you wouldn’t have the loft. If you could be happy walking in the door of that kenmore double knowing the potential benefits then sure do it.
I only put build in as an option. I wouldn’t want to build a house now anyways, only because what I can buy for $250-$300k, would cost me $450k to build. Not to mention, the prime builders are only taking on $400k+ projects now anyways.
I don’t want to make it seem like I’d be going broke, I definitely wouldn’t. I have a savings account with enough money for 8-10 months of expenses. I have a “house” account with a stupid amount of money in it from saving/inheritence/gifts.
I’m right now paying about $1800 to rent/park/utilities, in Buffalo. I’ll be right about there with option #2, mortgage wise…most likely less.
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I don’t want to buy a house in Buffalo (rental or not), unless we’re talking MiddleSex.
Glad you have me all figured out though.
(If I’m buying a primary residence, I’m spending big dough… enough dough where I won’t be moving for a while. As in…after I have kids… As in, I need a TOP tier school dist)
Very true, I had my first house built in a nice community here, 15 mintues from the beach, 5 bed, 3 bath, 2800sq ft, 2 car garage, lots of upgrades, and I already am thinking about a new place that is bigger with more land…sooooo… you never know. I would probably go option 1, stay in it till it’s paid off, then build your “dream home” and keep the first place for rental income! Good luck either way!
LOL Who said anything about you. Its the situation. If you think going to kenmore and tonawanda in a 700/mo rental is going to get you better renters you are in fantasy land. You asked for opinions/experience and that is mine. It all comes down to where you want to live imo and if that is the desired location I think you SHOULD do it. I do not think you should justify the location with that means though.
I can also tell you from EXPERIENCE that when you own a more expensive they will rent for more money so they are still great money makers. Difference being at the end of the day you will have more value in equity and a more expensive house. My lower tenant is a 37yo who works in IT for a bank. He has been there almost two years so far. Don’t be so offended I am just offering advice from experience I have first hand. There are some really nice doubles in Kenmore and Tonawanda too. I almost bought a fully remodeled very nice one in Kenmore for 140k which was a great deal but it had serious foundation/basement issues so I walked.
So basically I am not saying to deff live in the city but I do think you should consider 140-160k rentals(everywhere) if you have the cash to get into it. They will rent for more money, probably be more updated(which lets be serious you want a nice place), need less maintenance, and pull better tenants.
Imagine being the landlord in a situation like where Newman lives at: a nice neighborhood, a renter that never plans on moving and you know he is good for it.
Of course I would live in the garage apartment and rent out the front (possibly having it be a duplex itself) for $$$.
Those houses on Beard are BIG money. They definitely aren’t doing it for income purposes.
Everyone is missing the point. I don’t mind living in a small house for income reasons… You can’t buy a $300,000 house and expect to make money/pay for itself. That’s all I’m trying to do.
Do I invest in rental income now in a less-than-favorable NON CITY house, or do I take advantage of low rates and buy a big money house in the nicer area?
That’s it. Not “Buy a $300,000 house and rent it out!”
---------- Post added at 06:11 PM ---------- Previous post was at 06:10 PM ----------
The point is… $700/month in Kenmore pays for itself with one unit, two units being rented…I’m making money. A $200,000 house on Parkside, only pays for itself with both units and will never make money.
my .02 on this, considering I’ve been there with houses I hated in the long run.
buy the double for 125k, keep the rent high enough that it wont qualify for section 8.
live in it until you can afford to buy/build your 200k house, when you move out, rent both sides and have a steady extra income for a few years, with the double on the market for 40 more than you paid.
thank you for your opinion. this is what i’m looking for. (i refuse to deal with section 8).
I’m looking for 3/3’s currently around $125k.
---------- Post added at 06:21 PM ---------- Previous post was at 06:18 PM ----------
This is what I’m looking for. Thanks Drew. I just don’t want to have to deal with BLO’s shitty garbage tax, plowing, services, etc etc…not to mention, it’s only getting worse.
Read my edit. Also I think you should look into what these nicer houses really rent for. I can tell you if I rented both sides I would bring home around $400 a month. Even if a cheaper one would pull a wee bit more I think having a nicer updated house will make up for it in gained equity and maintenance. But you are right there is probably more potential money to be made on the cheaper ones and I would buy that if I didn’t have to live in it. My problem is that I know if I personally bought a cheap one id find myself going"i want vinyl siding, new windows,nice floors,dope bathrooms, etc." but that is just they way I want to live cause im a privileged white male in America.
Well you’re on the right track that when interst rates are a touch under 5% and you’re paying $1800/mo in rent that you’ve got a great opportunity to improve your situation.
However, don’t build. For two reasons:
You’ve never owned a house before.
(Correct me if I’m wrong) You’re not married or engaged.
Both will change your priorities over time so whatever house you buy now will not be what you want to stay in forever.
Either way I support a double till you can buy the “dream house” I think it sets people up great for their future. Plan to acquire 1-2 more myself next year.
I’m kinda torn between the two options. On one hand, buying a starter (i use that term loosely) home in Kenmore is great because there are going to be a million and one things you will want in your more long term house. On the other hand I’m not the type who would want tenants, just not my thing I guess. I would probably buy in the better area that you’re going to want to end up in. Maybe get into a house that could use some updates so you can update, have fun and make some dough. Like find a house for $150-$170k and make some improvements while not having a super huge mortgage, then sell it and move into bigger better things. Happy medium? Haha, good luck with whatever you choose though dude.
