Profile picture for skyt

buy vs rent

Hi, I have some questions and hope to find some answers here. A little background of my family, we immigrated to the United States around 6 years ago and are considering purchasing a primary residence. We currently have approx. 150k in cash and have an approx. family income of 110k (pre-tax). We are considering to buy in the queens/Nassau area in New York. My questions are,

1. is it a good time to buy now and why? I've heard others saying that the interest rate right now is one of the lowest in history, how is the home price?
2. this residence is more of an investment than a house to live in since both of my parents are not living in New York, so we are looking to rent out part of the house to help out on the mortgage payments, what type of residence should I consider? (1/2 family house? condo? co-op?)
3. based on my family income and available cash, what is the recommended price range of house i should consider?

Thanks for your help

Ed
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August 29 2010 - Town of Nassau
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Answers (5)

Profile picture for dacolan
Here is a link to the NY Times Rent vs Buy calculator that may further help prospective buyers with their analysis.

Whether a RE pro or an anonymous stranger, don't take anyone's word at face value without performing your own due diligence, especially when it comes to what may be the single largest investment of your life. Caveat emptor.
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October 01 2010
Hello Ed,

Determining if it's a good time to buy is a very objective question.  Yes rates are very low.  Home prices are down from there peak a few years ago, but values are climbing.  And no matter the market conditions, with quality information and by taking your time a good deal can always be found.  Using the right proffessional is important too.

Since you are looking for not only a home, but an investment then a multifamily home may be right for you.  2 to 4 family homes can provide you an excellent source of income along with all the benifits of homeownership.

There are many other factors to consider than your cash on hand, income and family.  Those 3 factors are only your limits.  To find out what price range is the best for you takes more information and thought.  We can compare your wants,goals, family, financials and current market conditions do determine your price range.

Thomas Robinson
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October 01 2010
Profile picture for the_country_hick
Your cash reserves will increase. Housing prices will continue to decrease.

Look at the site below.
http://www.housingpredictor.com/newyork.html

In the Bronx, Brooklyn and Staten Island despite declining prices, new buyers see value in homes that are priced lower than just a few years ago. Foreclosures in Long Island and the rest of the boroughs of New York will have a major impact on the market as more homeowners walk away from mortgages. Brooklyn, Staten Island, Queens and the Bronx are forecast to average 10.3% deflation in 2010. (lower prices)

Do some research. Look up alt-a mortgages. Look for loan resets and loan recast. A lot of bad mortgages were written. The way they were made they must fail and foreclosures must happen. People with interest only loans can not make payments once they also have to pay for the house as well as the use of the money.

It is likely to go something close to this:
2012 loans finish going bad in major amounts.
(government interferes with things like hafa, hamp and so on.) add more time
The foreclosures take often a year (sometimes longer) to finish foreclosing)
We have a lot of excess inventory of housing that will take another year, perhaps much longer to work through.

Not adding anything else 2014 is the earliest possible year for prices to be a bottom and it will be a long time to get then up strongly again. 2015 or later is very reasonable.

 As interest rates increase house prices will decrease.


p.s. for a realtor now is always the best time for you to buy so they can get their selling commission.
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August 29 2010
Profile picture for skyt
I do plan to live there for a long time, (well at least before I can afford a 2nd home), the reason I call it an investment is because I will be the only one living in this house for a long period of time and the primary purpose of the house is to collect rent and pay off the mortgage. (as oppose to raise my family in it).

Should I talk to the bank to see how much money I can get before even start looking at listings?

Thanks!
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August 29 2010
You should talk to a lender about what you will qualify for. When you call it an investment and a primary residence - do you plan to live in it long term? Is the "investment" you are seeking appreciation or the ability to create rental income in the future? These are very different strategies. 

If you plan on renting portions of the home out, you may need to stay away from condos, and even more likely co-ops as they often have restrictions about whether or not you may rent and to whom.
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August 29 2010
 
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buy vs rent
Profile picture for dacolan
Latest answer by dacolan
October 01 2010 | 5 answers
  • Asked by skyt
  • In Rentals
  • August 29 2010
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