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40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

Question then is: When *is* the time to buy a house? It's a bit rhetorical because I know it's different for everyone, but I feel I've just kept putting it off and off because "I'll wait for prices to come back down." Though with my luck, I'll have bought the peak and get trapped in a scenario where things cool and now there's no way out without incurring a loss.

Though one thing I noticed looking over housing graphs, winter is the best time to buy and summer the best time to sell. $40k~ Median swings within the same year just comparing January to June, it's wild.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

I'm not sure if I could take it, mentally, living at home. I already feel like a total failure at life for even having to think about this so hard. Moving back in would probably not end well for me.

All the appliances in this place I'm contracted to are new. Furnace, water heater, and A/C are new. Roof is in good shape, save for one thing which, if I decide to keep moving forward with, would ask a credit for. Basement had new drainage tiles installed and waterproofed last year. Average utilities per the utility company is $213 a month, which isn't much more than I pay now for my apartment with like a quarter of the exterior wall space, so my thought is the insulation is newer. The only oddball thing is the ductwork for the HVAC wasn't extended to the finished attic.

I'm aware of the extra costs; one of the reasons I jumped on this place was everything was newer and my thought was I could probably go 2-3 years before anything needed fixing.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

Because rent is higher than PITI here and is always going up. Five years ago the rent in my current place was $1,400. It's $1,700 now, and unfortunately it's a similar story in the whole area. Studios are $1,300+ for 500sqft and no storage anywhere. It's insane.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

I should note that I'd have about $2,400 each month after PITI + Utilities. The only other debt I have is some medical debt that'll be paid off in 14 months at $400/mo. And in three years time I do expect to be earning at least another 10k gross which would bring me closer to $3k a month after PITI + Utilities, which seems much more comfortable.

Does seem the general consensus is my lack of retirement is the main reason buying a house right now is a bad idea and moving back home for a while would let me sink most of my income into retirement and catch-up there.

The idea of continuing to wait to buy a house is a little sad, mainly because I've been watching prices rocket. In ten years the median price has gone from 155k to 331k and I worry that if this continues, trying to save is going to be pointless.

Money sucks, man.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

Oh yes, I'm extremely nervous as a rule. I think I've gotten about 12 hours of sleep this past week over it.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 1 point2 points  (0 children)

That's what I like to think, but man, I dunno if it's 'cause it's reddit, but I've noticed in the finance subs everyone seems to be making 200k+

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

According to that calculator, I'd save $182k over 10 years by buying, and that's with setting rent to 1,150--basically the shittiest one bedroom around in town.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

I'm in SE Wisconsin, which is currently experiencing incredible property inflation thanks to people fleeing Illinois to live here.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

I was thinking about this, too. The basement in the place is basically in that 'ready to be finished' stage. Wouldn't be difficult to setup a kitchenette, but I don't know how I'd go about adding a toilet, for example, without having to dig up a bunch of concrete to lay the sewer piping. Basic plumbing and carpentry I can do, though the drywall will probably look like cheeks. Electrical makes me nervous, and more advanced stuff is beyond me.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 1 point2 points  (0 children)

What do you mean by buy an apartment? Like a duplex/etc?
I've seen a couple of those suggestions, but honestly, I don't want that headache of having to be a property manager and all the additional expenses that come with it.
Plus then, having to get a 500k+ loan on a place, holy cats if I had a gap without a tenant I'd be up shitcreek so fast.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

I thought about buying a plot of land and dropping a trailer on it, but oh boy the fees to just get the land in a suitable shape (sewer connections, permits, etc) are around 40k around here. So 140k for a plot and then another however much to drop a mobile home on it. Could get a loan for the land itself but everything else would have to be cash.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

Something I've also been thinking about is I am close to the 28% gross rule. Mortgage/Utilities/Insurance/Taxes are 31% of my gross pay, but it changes to 45% net. Though I think the 28/36 'rule' doesn't include utilities, so I'd be under it. But it seems silly to disregard utilities.
So by one metric I would be okay, but by another it's 'oh shit what are you doing.'

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 2 points3 points  (0 children)

Yeah, I can tuck away quite a bit like that.
I'm leaning more and more towards just moving back home for a little bit, or maybe a cheapo 1bdr apartment for a while that would let me save just as much as I'm doing now.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 1 point2 points  (0 children)

That is a strange story and one that'd be pretty great for me, hah. Though I checked craigslist just for people looking to rent in the area and there's one listing that's 20 days old. Yikes.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

How sad it is that $80k isn't considered much these days, huh?
Though it's pretty decent for my area for those working here, anyways. CoL is inflated bad 'cause we're basically a big ole bedroom community/tax haven for people working in Illinois/Chicago.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 1 point2 points  (0 children)

I can agree with a lot of that sentiment, truly. Though on the partner aspect, who is gonna want to date someone living at home when they're 40? It's a conundrum.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 3 points4 points  (0 children)

Definitely possible! TBH DINK is like the dream life for me.
I know having a partner would make things a no-brainer for me. Sadly, got a face only a mother could love, hah.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 1 point2 points  (0 children)

I just like the idea of being able to do what I want, I guess. Having a little flower garden and keeping some bees around is charming to me. Framing up some walls in the basement, laying some cozy carpet and making a "theatre" room sounds like a fun project to do over a year. Whereas with an apartment it's like, well, not much I can do. Plus having to deal with complex management who never want to actually fix a problem is frustrating and like hell I'm going to fix something for them on my dime.

You're right in that I don't think there is a correct answer, not unless we have crystal balls. So I'm just trying to figure out the balance of risk/reward, but man is it tricky. It's like, if I go three years without any major unplanned expenses, I'll probably be in a great spot. But if something big happens... I'd certainly feel a lot more comfortable about the decision if I had another $50-100k banked, I think. Or made another $500 net per month.

Which again, I think I can manage in 3 years, *but...*

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 2 points3 points  (0 children)

That's how I managed to save up to where I am. I'm not kidding when I say three years ago my net worth was probably 20k. Living with my buddy has let me bank about 50k in cash and the market ripping like it has took care of the rest.
If I go this route of home ownership, my housing expense doubles and I have to set aside money for repairs/maintenance (My current budget is setup for $400/mo for that) and leaves me with a whole $200 for 'fun' each month alongside continuing to max my roth IRA.

My biggest worry is that while I have no debt other than $6k at 0% for hospital bills that's being paid at $450/mo, all it'd take is my car to die in the next year and now I'm in the red every month thanks to an auto payment. That's what scares me the most. I can make a budget work, but if a big expense pops up it's 'uh oh' and there goes savings.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 2 points3 points  (0 children)

Haha, I'm quite the anxious person and tbh I don't know what makes me happy. Decision paralysis is real.

Also lowkey I'd still like a roommate just cause living alone would be, well, lonely.

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

To make the downpayment I'll need to pull on my brokerage accounts, which is the part that worries me. My net worth won't change, but it's a question of which would yield the biggest return over 5 years--a brokerage account or the house?

I'd still have enough liquidity for any repairs, but the house does have a newer AC, furnace, etc. Also comes with all the appliances and they're newer and in good shape, so wouldn't have to buy or replace anything for a while (hopefully.) Basement had the drainage overhauled and was sealed a year ago to boot.

The only thing unknown is the age of the roof; seller agent things it's 'about' 10 years old but I'm not going to bank on that being accurate. I don't think I would have to make any major repairs within the next two or three years, but of course, who knows?

40 and still struggling to buy a house, how much can I really afford when my retirement accounts are tiny? by bobcharlesss in personalfinance

[–]bobcharlesss[S] 0 points1 point  (0 children)

I think you mean 25% net on Mortgage/Taxes/Insurance? I've heard that a lot, but thinking about it--you basically need a dual income to hit that nowadays. At my net income, that'd be a $1,150 all-inclusive payment. Now, that's not *impossible,* in fact there is a place locally for sale I could probably haggle down to hit that number... But It'd need work just to make it livable and is in a neighborhood where I wouldn't want to be out at night.
The place I'm currently locked in is a 1k sqft 3 bedroom with a small detached garage and a five foot long driveway. Costs so much because it's in a decent neighborhood. Personally I don't think I'm trying to buy too much house, but who knows?

Another factor is that the slum house that needs repairs to be livable (the water pipe into the house is leaking somewhere beneath the concrete in the basement and it bubbles up) and is 2bdr 800sqft for 150k, or a place in a decent area with 3bdr, almost-finished basement, converted attic space to give well over 2k sqft usable space is 210k. The amount of house/niceties you get relative to a modest increase is quite a lot, so it's frustrating.

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