Rushing into home ownership?

Aug 8, 2021 23 Comments

25 yo, living with family in the bay area and no debt. buying a home has been a goal of mine since getting into the workforce in 2017. since then I've built a net worth of ~200k and looking to take advantage of the low interest rates before they're gone.

I would be buying the house on my own and would receive additional financial assistance from my parents if needed, but may not be necessary if I stay within budget of a 700-800k purchase price.

I'm frugal by nature and monitor my expenses closely but it's intimidating to purchase a house on my own. I've calculated the monthly costs and additional expenses I might need to pay and they fit comfortably within my monthly income. however I still can't shake the feeling that I may be putting myself in a difficult position. am I rushing into things?

TC: 150k #housing

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  • Reddit
    sNmS07

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    sNmS07
    I would go for it if you can afford it. You can always "house hack" and rent out other rooms to get extra income. There are some pretty sweet tax benefits that comes with that strategy.

    Given that you're frugal and did the math, I would expect that you're going to be fine from a risk perspective, especially with family that's local.
    Aug 8, 2021 2
    • OP
      exactly what I'm optimistic about, what I'm unsure of is being able to seriously afford it with hidden/future costs and wouldn't want to burden my family with my decisions
      Aug 8, 2021
    • Reddit
      sNmS07

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      sNmS07
      You have a lot of options in case that happens. You could take a home equity line of credit, do a cash out refinance, pause contributions to your 401k, write off depreciation, etc. Realistically, you could just collect rent and save it for an extra home improvement fund.
      Aug 8, 2021
  • Are you married/have a girlfriend and plan to have kids anytime soon bruh ? If so , you should buy sooner than later regardless of your financial situation . If not, try to first get laid bruh and then think about housing .
    Aug 8, 2021 1
  • Google
    axhe2

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    axhe2
    Yes, you're likely rushing into things. Your net worth is very low, and barely enough to cover a down payment. Your TC is likely also not high enough to sufficiently cover the monthly payments of an 800K home. A home is fundamentally an investment vehicle and you should be sufficiently financially diversified before adding a real estate category.
    Aug 8, 2021 1
    • OP
      thanks for the input, I agree on your points but the opportunity seems rare since interest rates are pretty low and bay area housing prices are always rising. im open to house hacking as a form of covering mortgage and as a potential stream of income so I'm thinking that will outweigh the costs...but I might be overly optimistic
      Aug 8, 2021
  • Apple
    s3xynotch

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    s3xynotch
    I had this thought when I was new grad 10 year ago. Held off buying even though parent was willing to help with down payment. Guess how much the house price went up afterward? I could not save at the pace of the price growth , so I am no better situation as 10 year ago
    Aug 9, 2021 1
  • Apple
    heifith

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    heifith
    You are not rushing. But you will not get anything for 800k in Bay Area.
    Aug 8, 2021 1