Is Being House Poor Good or Bad
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- čas přidán 5. 09. 2024
- Most financially savvy people will tell you to not buy more house than you need. But how is it possible that I benefited greatly ignoring such advice? I bought much more than I needed, felt house broke for a few years, but it eventually got better. The stretching of my limits eventually greatly contributed to my net worth.
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What I've learned from this is California Is too expensive
It is. But weather is awesome. Except for the occasional forest fires.
@@BeatTheBush Is weather a huge factor in property value? Still trying to figure out why California real estate is so expensive despite problems such as the homeless crisis and spoiled youths leaving graffiti. Many of the homeless are from other states by the way. Meanwhile, all middle states such as Kansas and Nebraska have much cheaper real estate. Why?
@@Rockerlady Homes on the coast are always much higher in cost because the living environment is better. Imagine being able to be comfortably outside for 11 - 12 months of the year. In the midwest expect to get 4-6 months were being outside is really remotely enjoyable (say 40F - 85F). But, that is only one factor. Local economy, near by attractions, near by companies, schools etc all effect home prices.
Correct. At the end of the day it isn't sustainable either. People at all income levels need a place to live and that isn't really possible long-term unless there is a system to ship people in from the desert hinterlands. Of course, there are more affordable Cali towns, but they aren't the metro areas BTB mentioned.
@@BeatTheBush "Occasional" forest fires are an annual event, but sporadic in their coverage, and don't forget the earthquakes, and then there are the mudslides in the rainy season.
Houses are risky. They are inherently a concentrated, non-diversified investment and your mortgage is basically like a short position on fixed income. Sometimes things happen completely outside your control that can bring your house value down and there is nothing you can do about it. Say a neighbor passes away and their house is in intestate court and become dilapidated (this happened to a friend of mine). Your house value goes down because no one wants to look out the window and see an eyesore. Leverage is a reward AND risk multiplier.
Yes they are and many people shy away from it because of the risks. But heck, I'm biased since I benefited off of it. The amount of gains resulted in the equivalent of many YEARS of working value.
Wow !where is your frd house? Location is the issue,
Renting is also a risk since you also don’t have control over the property. Rent also increases over the years and if the owner pass away or sold the house you will also have to find a new place to live too. If you missed rent or even temporarily late in rent the landlord could write you an eviction notice and also charge additional fee for late rent. If you don’t comply you will be take to court. Also depending where you live the rental market is competitive as well especially in California. You pretty much have to spend money just get a credit check every time you get an interview with a potential housing. Sadly it’s a supply and demand scenario. Too many people fighting to get housing. Renting lack a lot of stability. It’s cool if people aren’t planning to stay in a rental unit on long term. People buy housing mostly if they are planning to settle.
The rental market and the housing market are actually both inclined with each other. If the housing market is up so are the rental market. The market is determined by the limited amount of housing is available in the area.
@@CrimsonEclipse If a renting circumstance becomes unfavorable, you can walk away in a year - max. If an ownership circumstance becomes unfavorable, it is much harder to get away from. Ownership is a much less flexible option. Flexibility vs stability is a fair tradeoff on both sides.
What I was trying to say in my comment is that PURPOSELY becoming house poor as an investment strategy is very risky. You need to thoroughly research the market you're buying into and a) hope you are right and b) hope that no situations arise that lower your property value that are outside your control (like the one I mentioned above). Not sure how it would do in a risk-adjusted return basis
Depends on where you live. In the Bay Area, people would buy that home for the land, tear it down and rebuild. Non habitable homes in the Bay can sell for over one mil.
I did exactly the same as you. It's been a stretch financially but it was the right decision. My house is now worth $250k more than I paid 4 years ago. My salary has also gone up $20k per year. I still have a high housing payment but it's worth it to me 😃
Being house broke is going to be the norm moving forward. My sister bought a home in 2016 for 224k, it's now worth 400k.
*House poor or not... house poor is prob better than no house AND poor?*
house + poor > poor
@TheLifeBidder Depends. A person can be poor AND have debt lol (think credit card and college loan). But it is true that it's much harder to "relocate" with a house
@dachicagoan True true. Freedom is also important in life! Sometimes people have to decide between more "material things" and more "freedom"
BeatTheBush actually house + poor < no house poor
I was house poor in the beginning. Then, inflation caused my mortgage to be cheaper than rent. Ill soon be mortgage free. Paying off the 15 year mortgage, 5 years early.
Back in a different time and place My parents bought a house while living off my dad’s PHD grant because renting was more expensive than buying. Something like 85% of their money was on mortgage payment for 2 years. however 40 years later the neighbourhood changed and became very fancy and it’s worth a huge huge amount now.
My house payment (mortgage,tax, insurance) is $665, my rent on my old apartment was $800. I save money on a monthly basis with my house. I even pay $100 extra towards principle and I'm still paying less than I was in rent.
What state are you in?
@@vladram9084 CT
jcrowley1985 CT! Omg dude I’m in CT & it’s completely bonkers right now. When did you buy? I looked for a house for about a year & finally gave up last month. Overinflated listing prices & insane property taxes. A few months ago you couldn’t even think about a house for a day since they were going under contract same day they were listed. Often above list price. It’s cooled down some now but prices are still inflated. You’re one of the lucky ones in CT.
In certain areas of Connecticut, the real estate taxes alone are about $400- $600 per month. What is your tax rate for your home?
What about your property tax, home insurance, maintenance & repairs, etc. If you add all that up, are you still paying less than rent?
Hi Francis, the moment you say "this video is brought to you by SquareSpace" I felt so proud of you. I started watching your video since 5K (or so). Maybe it's because I saw the progress of your channel. I don't know, I am just happy for you. Luv pcl
Thank you! It is so nice they are a Sponsor but not everyone feels the same and complain about it.
@@BeatTheBush You are right.. but I still think it is good and enjoy watching your videos...
I almost always go with the more conservative approach. We were always pre-approved for double what we actually paid for our houses. Being conservative with our spending allowed me to quit my job (half our income) and be a SAHM with very little change to our spending habits. My husband and I always lived on just one of our incomes and saved the rest. There is more freedom when you don’t tow the line so closely.
It's a risky way to go and this added risk turned out well in this case. If I did the same, I would not be where I am today.
BeatTheBush With great risk comes great reward! It definitely worked out in your favor.
An average professional couple who are loaded with IPO and stocks options in silicone valley make about 300k to 500 k a year. It makes sense for them to be home owners with that type of income
We did the same! We bought in 2013 and our place has doubled in value. We were also pushed to the limit with our income because I was still in grad school and we could barely afford to eat back then. Now that I'm working too, our income has more than doubled and affording this mortgage is like chump change to us now. If we didn't buy back then, we would be perpetual renters because we would never buy a first home at current prices. Housing prices are coming down again soon though! Save your cash and snatch up a rental property in this next downturn!
This is excellent advice, BTB. I bought a house in 1977 for the horrendous price of $160,000. I took out the maximum mortgage, (open), and borrowed an additional $12,000. Within 5 years, the house was paid off, thanks to high inflation, and I have never had a mortgage since. Today, I own a $2.2M house, with enough money to buy another one, all generated from the original $160K investment. For a few years, no travelling, second hand TV's and a frugal lifestyle. It was worth it.
Very good decision with the home purchas & paying it off! Being somewhat house broke for 2 or more years really paid off for you.
Living in California, I sometimes want to buy a piece of land and build a really really nice adobe hut LOL
Victor Ramirez the land cost more than the house with the land. Also the zoning regulations is also terrible too depending on the city.
@@CrimsonEclipse yup, but that's why the land is worth buying. Not the property.
Just go do it way the hell out somewhere then u won't have to pay for it. I'd be bored personally without some of my belongings though.
Basically, it's risky. It involves being highly leveraged which increases returns and risks. If you get lucky like yourself, you'll do extremely well. But you can also end up doing extremely bad.
I think worst case would've been loss of a job and foreclosed. Or the value of the home could worsen from when I bought it. Those risks were lowered when the prices fell a lot.
BeatTheBush wait the price of what lowered?
@@M_SC house...he bought during the downturn.
I'm learning to be a loan processer and you've helped me so much.... I watch your ads to say thank you lol
I'm not even a loan processor though, thank you for doing so! =D
I did the same. Had to buy a house because of birth of my son. Was house broke for 2 years but the tax reductions were great. It was like the same price as renting but it did increased my networth as now I had options to refinance, remove the PMI with the increased equity and lowered my mortgage payment.
Buying a house was one of the best decisions.
Do it! Reduce that mortgage payment. But then remember, when you refi, you make it lower but also resets the payment length from 28 years back to 30 years again if you go with a 30 year loan.
@@BeatTheBush yes that is correct. I refinanced in 2 years out of the 30. But it got rid of the PMI payment that wasn't tax deductible.
I was on a FHA loan instead of a conventional.
Leverage can be both good and bad, depends on your financial position & risk tolerance. Higher leverage can grow you net-worth faster, but it can lead you to financial turmoil.
Home prices here in Texas is soooo much cheaper! The home I live in is 3bedroom, 2bath,
960 sqare feet, huge yard (could care less for) 10yrs old was under 60 grand
vacationboyvideos Not in Houston, Texas. Suburbs $200,000 and up. Inner city $300,000.
I suppose you live a little further away for $60k.
@@KOALA1LOVE I live in small town in Texas. Yes hoston and Austin and dallas are expsive!
@@BeatTheBush true
@NurturingTalents Homes in Houston are now in the 400s and up. Suburbs are closer to 300k in better neighborhoods with good school districts. Homes in the 200s are in less desirable places and/or come with horrible commute times. Source: I'm a Houston native and have kept a close eye on the market.
Ironically, some years ago, I was turned down for a refinance loan on my car because my debt to income was too high. Gee, how could I ever afford to pay LESS than I'm already paying. Banks are stupid.
Hi BTB, a house is only an asset once you have sold it, otherwise its a liability with running costs. after 26yrs pursing the ever increasing the life style, now I just keep my life as simple as possible and have sold off am other UK property.
True. My costs are pretty low though.
Looking at my bank statements and investment profile was what got me the loan. I save 40% everything I earn and it was well over mortgage. Despite my proportionately lower income, I got a huge mortgage.
Damn Daniel! I didnt know you watch Beat the Bush too :D props on the stats in the comment, well done!
Thanks Level1!
Hopefully that turned out well wit the equity in it increasing like many places.
BeatTheBush Absolutely, huge boom here in Alaska right now!
What are your thoughts on the housing market crashing soon? Everybody and they mommas been saying it should crash either this year or next? What’s your honest opinion? ...I know no one knows for sure etc but what are your thoughts?
Quiet Entropy might be awhile then?. There are lots of jobs in California, they also hired minimum wage, minimum wage will still continue to go up so makes sense for houses to keep rising correct?
So the answer is "It depends." If you're in a great housing market that continues to appreciate, then it makes sense to push yourself to buy more than feels comfortable. It's sort of easy to make that gamble in San Francisco, more difficult in other parts of the country. I did something similar to what you describe in Chicago that ended up working out, but if home prices even stay flat, you could end up behind because of the taxes and maintenance to keep a home.
I wouldn't say that today for San Francisco. It's always harder to predict the future. The chances of it doubling again seems less likely but heck, I was wrong before.
@@BeatTheBush Well, you may be right in terms of San Francisco now. How much higher can it go, right? (Actually maybe a lot higher; it's so out of whack now, people seem to have lost their minds IMO.)
If you look at Vancouver or London, the prices are about 2x that of San Francisco. So it is not without precedent that unaffordable prices becomes even more unaffordable and ridiculous. Normal joes might not be able to afford it but plenty of richer people that are willing to move in.
@@BeatTheBush Exactly.
8:20 should be =>$190k/year
Agreed...prices not for the average wage earner. I prefer to refer to it as house poor instead of house broke. (House broke reminds me too much of trying to teach a pet to "go" outside..) :D Thanks!
Ahhh... perhaps it's the wrong term.
Damn, I’m so glad I live somewhere where the median house price is ~140k...I just bought my 2 bedroom house (3 if you include the attic office) for 92,000! Mortgage is only $800/month. I could afford living here even with my last job!
You net worth went up but, you are still in the same cash position unless you sell now. I think Housing will crash again because gains of 100% are bubble territory.
Housing market may crash again, but I would not hold my breath...
Larger homes cost more to maintain. Homes can also be a liability. What happens if there is an earthquake or other disaster that damages your house? What happens if you have a costly foundation issue or water damage. Homeowners insurance policies have plenty of escape provisions to deny claims. Yes, you can make a lot of money if the value of your home dramatically increases, but it's also important to look at the potential negatives.
I’m so glad I moved away from the Bay Area but I wish I would’ve waited to sell so I could’ve sold at these higher prices :)
Very hard to time the market. If I could push a button and easily sell, I probably would have done it much sooner as well.
that tax example is a joke... sure after taking into account the large standard deduction and a relatively low state income tax that is fair... but all of the other taxes and insurances you have to pay make it closer to 40% reduction of gross income. If you only have a typical W-2 income, banks should be using net income for their calculations adjusted appropriately.
'House broke' sounds like when you train a puppy to stop crapping on the carpet!
Houses where I live are crazy out of reach for the average person, it's quite sad - even the rents are terribly high and people have no choice but to move out of the city.
I'm very fortunate that I got into the market before it blew up.
Things blow up and you find yourself on one side of the line by chance. I feel it was that way for myself.
Thanks for the numbers, BTB! Useful information, as always! Would love you to comment on how you view the loss of opportunity loss of the money you have in a house that's paid off.
I talked about that many times. You can go around buying many properties with the money and you may make more that way but it's not very secure. Having a paid off home is like a cement foundation where the economy can collapse, stock market drops 99%, and I will still be here making CZcams videos.
@@BeatTheBush thanks for your insight.
I bought a huge 5 bed 4 bath and rented one of the rooms. Since it has its own full bathroom, I can rent it out for a nice chunk of change. With one room rented, the house is cheaper than my last apartment, and I can rent out two comfortably.
Please make more videos about starter homes. THANK you!
How can I? I never had one. I just went crazy and bought this one.
BeatTheBush Yes, but your insight is really valuable! I rent, btw, so I would watch the starter home analysis video if you made one!
As an investment the increase in value is okay. Do you let out rooms on airbnb or similar? There is no way to cash out the increased value of the house other than selling it, and if there's a down market or crash then the increase in value is lessened.
you reminds me of myself , writing the biggest cheque as a downpayment last year. I was so nervous haha .Hope to finish it asap.
Blop... money just vanished after years of collecting. It's crazy but gets you a place to live.
@@BeatTheBush yea .But then we have a comfy place :D
@@BeatTheBush I see it more as a transfer of money to a different "account." The money is still there, just in a different form.
@@jason_v12345 depending on when in the housing cycle you bought though...that's the key.
Average people aren't buying homes in SF , its mostly international investors buying all that up and the rest are peolle who bought 20+ years ago before prices were so crazy
Non citizens should not be allowed to own American property. That's what China does
Let's say you had the cash value of your equity in your bank account, would you buy the house that you currently live in?
The first video I've come across where the peas are inside their pod😂
It seems like it's pretty much always good to buy in CA if you're planning to buy and live in your home long term because you can lock in prop 13
Chef’s kiss. Amazing video man.
You didn't include the California state tax in your calculation, which is a lot.
Or health insurance premiums and soon to come mandatory 401k contributions
Let’s all shout out a big “L” for liberalism!!! Lol
There are celebrities or people that simply work in the entertainment industry - cameraman, crew, film producers, screenwriters, film editors, stylists, fashion designers - that make more than enough to afford those mortgages, not just pharmacists, doctors, lawyers, and tech gurus. It is California, after all.
Athletes make a lot of money too and so do their coaches and team owners.
kinda wish i understood what you are talking about here planning to move back in with my mom for a will to save me money so i can buy me a place. grew up dirt broke mothers account always in the red could not really afford to feed myself till i got in with the guard. never want to be that broke again
Thanks 🙏
What is your opinion on taking money out of your 401k to cover the 20% down? My options are to wait and save till I have 20%, borrow the 20% from 401k via hardship withdrawal which does not have to be paid back or 401k loan which would be deducted from pay.
I wish I bought a 3 bedroom to start n over stretch myself even tho I'll be sweatig buckets for the first few years at work. Even trading upward now to a modest 3 bedder will incur txn costs legal, agent... But if u r in a 3 bedder already doesn't it make more sense to be In a detached home than townhome when latter has HOA expenses especially with generous prop 13
Generally house, or any other kind of over extension is a bad idea. You just explained why California is the fastest growing outdoor homeless camp in the USA. Speculating on RE is almost like slow motion gambling. I wouldn't do it
Generally yes but you see how I fall outside of generalities since it had a very positive effect for me.
@@BeatTheBush You are also not the average person financially inept and buried in debt.
@@zloungeact yeah I don't think so. That is statistically impossible.
@@sassed12many most of them are on drugs. i know. i live here.
Hello BeattheBush, thank you for another great video! However, this time I have a question. It is about something that I didn't understand: How can we know that the house prices will stay the same or go up or go down .....and how long and when any of these will happen? For example, right now house prices are insane (June 2021). Would it be insane for me to buy a single family house now in San Diego, CA (detached and 2+ story house....due to my and my child's sensitivity to obnoxious people's noise and due to security reasons)? I trust you and believe in you. Will you please answer me? Shouldn't I buy now? How long should I wait. I am paying 2700K for rent now (80 percent of my salary) and it is killing me to flush my money into toilet (aka: rent). We cannot live in a cheaper place because of the two reasons I mentioned above (sensitivity to loud noise and security reasons). I really look forward to your answer (a clear, not beating around the bush type of answer please). Thank you!
I am just curious how do you keep your house clean all the time? It sounds like a dumb question, but cleaning my studio and keeping it clean takes time, so I am just trying to imagine how I would manage in a house your size.
Wow, California is ridiculous! For 1.2M you could buy an enormous house with plenty of land in other states. (Not counting NY of course). But if you love Cali then more power to you! Enjoy the sunshine! 🌞
But in other states, not counting NY, you couldn't earn the income to make the payments. Salaries and wages are too low.
I guess being house broke isn't always a bad thing. Lenders will allow you to have a mortgage over that 28% of gross & that's a scary percentage (40-48%). I opted to buy in 2009 & was house poor til the economy rebounded, about 4 years. Glad I did it. Love the equity I have now. Couldn't afford my house if I wanted to buy it now & wish I had bought 2! Keep that content coming!
You really pushed it hard. This must've really gave you a lot of equity now. It probably beats out your accumulated salary. That singular decision to buy can allow you to basically not work for those same years and still earn the same amount.
I bought in 2009 as well. My house was new construction. Today it is worth slightly less than when I bought. I live in central NJ. Property taxes have increased dramatically during this time. Now the mortgage, property taxes and insurance eat about 40% of our after tax income. I feel house poor.
When do you realize this home value increase? When you sell the house and move to a cheaper area or retire to a smaller house. But if you stay in the house it never turns into money in hand. In fact it can cost you more money through higher taxes, repairs and maintenance if it’s a bigger house or higher taxed area.
I suppose when I feel like moving away.
Do a video on rejecting modern capitalism and monetary ties and just choosing to live deep in the woods. Hunting buffalo and gathering potatoes like our ancestors ( Pandas and rice i assume for you)
hah I want to see Francis do a #carlife video
I wish I could but then I have never done it myself.
Here: czcams.com/video/pAEw5NqXN4E/video.html
House broke is NEVER good for you. Cash flow is the way to go.
James Yuan I cashed flowed college and a new car best way to go without dipping into retirement
The guy just just explained how it greatly benefited him and you say it’s never the way to go? 🤔
@@kidkrusher1996 that's like for a lotto winner to advise people spend their life savings on lotto because it worked for one guy.
The way to go is passive income, in general. Yes, I like to have my money working for me in investments, but I also love and value the security and peace of a paid-off house. So have a mix of both. A lot of it is personal comfort level, peace of mind. Also, I live in a very expensive area but I bought years ago and paid less than 1/3 of what my new next door neighbor did, so not the stretch it might have been. Another truth: aim for high net worth but low income in early retirement, the govt rewards that at tax time.
Also some IT employees might get a good chunk of cash when their companies went IPO. Most people I know sold their stocks to make downpayment.
Buy with a plan for AirBnB...it will generate some income for your mortgage payments. At the current level of prices in 2019 and the looming trade war, just stay away from these inflated real estate prices :)
i agree with going house broke only if you are good at saving money, it's not for people who like to spend spend spend. Also i think putting more than the minimum down is a mistake because of cost of opportunity.
You might be highly against me paying it off as well due to the opportunity cost.
Born and Raised is San Diego but i can move somewhere else possibly! So many places to experience!!!
Indeed you can! Only if you are light enough in terms of material goods. Or else it'll be that much harder to move.
3 bedrooms? At least T-Rex has room to roam!
I was house poor 10 years ago, my dog is house broke now... LOL
Well, there are affordable California cities. You just have to drive longer in the morning but it's worth it in the end
That’s debatable. For myself, I absolutely hate commuting.
So if your crystal ball is working buying too much house is okay. Home values can go the other way... be cautious.
That house equity and the earning potential it could bring is eating at you. I got a feeling you’re thinking of something big.
nah- he really likes being right where he is, imo
(No hate just asking) Why does every financial person calculate with the gross income? That number is an illusion, you only make what you bring home. If I did a budget with 100k and bought home 70k I'd have a $30,000 discrepancy. If you bring home $1,000 per week your house payment should not be over $1000.
Because the ladder is ambiguous depending on your tax situation. If you use $70k then you have to say you assumed a 30% tax rate which is an assumption.
@@BeatTheBush You're right, I'm assuming everyone's tax situation is the same as my own. There are to many different tax scenarios, you have to use the gross number. Beat the Bush just put me in check!
Too much commercials at beginning :-(
Marco Liedekerken He has to make money to support himself to keep making these videos. Nothing wrong with that :)
He can monetize his videos. I have not sent him money yet.
They have this thing called CZcams Red where you can skip all commercials for any video.
Too expensive for us peasants
I guess there are a few that wants free content with no ads.
250k is normal income for a mid level programmer in Bay Area. Salary plus bonus plus RSU can get you to 250k quite comfortably. I know many people making way more than that. Some of my friends from college who are now directors or VPs make anywhere from 500k to a million a year. The prices are high because there are people paying those prices. I actually think SF is underpriced compared to many cities in the world such as London, Paris, Tokyo, Hongkong, Sydney etc. None of these cities have such a huge concentration of not just millionaires but mass affluent. Companies like FB, Google, Apple, Netflix, Uber are all concentrated in a very small area and they are sucking up resources/profits from all over the world. Google is building a ridiculous campus in San Jose right across Diridon Station that’s going to hire 20k mostly hi tech jobs. I would suggest wait for a slowdown or a recession which will happen soon and leverage yourself all the way... You will make a killing! 😂
Wow... you know so many rich people!
BeatTheBush I am surprised you say that.. Do you not have friends working at Google or FB or Apple... Techies are all over the Bay Area and most of them have really high incomes! I know 1 engineer at Pinterest and 2 at Uber who became multi millionaires (At least on paper till their stocks vest) in the last couple of months! Considering that you are Asian and went to UC for engineering, I am sure you know at least a few engineers that work at one of these companies! 😊
@@fnamelname7296 I no longer work for tech. I worked at a warehouse for about $15/hr for a short time though. =D
People are overpaying for homes driving up prices for those of us who are more frugal.
Oh! I thought this was about proper use of the bathroom 😆😆😆
Some risks pay off. But when they don’t....
I could've lost my job and the house foreclosed.
Love the content! I am a fan
Thank you!
House poor could be bad if much cheaper rent can be found. Otherwise, I would suggest building equity in a house unless someone can predict the housing market for the next decade..
What would happen to your 1.2 million dollar house in San Francisco if it's destroyed by an earthquake? Does your home insurance cover your loss? What do you pay for earthquake insurance?
Usually, in earthquake prone areas, it's probably a good idea to get insurance. Depends on the insurance it will fund the rebuilding of a home.
Super accurate
=D
Have u heard of Dan lok? Also from hk. You guys should do a video together.
Oh yeah, I saw that guy before. We shall see.
I don't like that guy
I’m definitely not ready to buy a house lol. I don’t know if I want one anyway
It's a good base to have when trying to retire early.
can you do a video on uber stock shares? do you think its a buy?
Renting is much better?🤔
Hey, BtB! I love the housing market in TX. It is hard for me to imagine having a $1.2 mil mortgage for a 2 bedroom home in CA--I don't see how the average person can live there. (There's a typo around the 8:18 mark. $190k/month should read $190k/year) Thanks for all your updates and info. Take care, my friend.
When I look things over... I don't see the typo. Somehow when I release the video... typos comes out lol.
@@BeatTheBush It's there like Gary says. San Jose example: $190k/month should read $190k/year.
It feels like squarespace and skillshare are sponsoring half of all CZcamsrs
House poor is only good if homes become more unaffordable.
Yes, only if the price of homes go up.
Omg did he say $1,200 property taxes on a 1.2 million dollar home in SF? In CT on a tiny 900sq ft starter home under 200k you’re lucky if your taxes are under 4K! It’s insane.
It’s around 1.3% so $1200/month
BeatTheBush ohhhh that makes more sense! Lol thanks for clarifying!
=D
I got a house...push myself to get a new job to make more money.
Oh boy... set yourself up to run harder I suppose.
4.2 interest ... must be nice
Hi, can a person that makes 70k salary are they able to pay a monthly mortgage of 2k and still be able to live ok?
Depends how much you have to pay in other debts per month. The more other stuff you have, the harder. If not other debts, it should be possible.
@@BeatTheBush I live on the east coast and price is also high here too but agreed California's price is ridiculous. To me 2K a month is a lot and I worry if I lose my job the house will be put on foreclosure. Thanks for the reply.
Are tiny home living worth the investment? in term of value and depreciation etc
Too dependent on local laws. You can have a tiny home but what about property tax? Will they require sewage, water, electric connections?
Tiny homes are like mobile homes. The house depreciates while you don’t own the piece of land for equity.
how can people afford these house prices holy shit!!! my house is worth like 150k and it's paid in full, my taxes are like 4k a year. i don't drink or go out and spend money ever, and i can barely save 20k a year here in michigan. even saving for a decade wouldn't buy me anything good in Cali. it's a whole other world out there.
I think salary is an important factor. In less costly areas, salary is also much less.
What needs to be done is too have the majority, not buy homes.........sadly, this wont happen.
Great video ! : ]
Thanks!
Do you live in a townhome? If so, how do you feel about the HOA fees?
No ..he lives in a house
I pay HOA fees and it's minimal so I let it slide.
I wish I could look into a crystal ball and have it tell me if I made the right choice :(
Long term, it is a good choice. Cash will be tight the first few years and it gets better every year after.
Great advice! Beats Dave Ramsey
My wife and I have a combined income of $200k, we can't live in SF haha
Depends on your net worth, income and debt. If you have net worth of $2M+ liquid, income of $200K+ annual income and manageable debt level you're better of renting.
That makes little sense. You're better of buying and renting out half your home.
@@ivarlosna6516 Yes, you could do that or buy a small home and have a separate investment properties. Where I'm from it's usually not a good idea to rent out part of the property you live in. Also, I refer to higher net worth people only. The effect of owning your home diminishes the wealthier you become.
@@postmodgent1499 Might be different in different countries of course, but if you had 2 million liquid here in Norway you would do well putting down 25% (maybe $500k) and buying a large $2m house and rent out the first floor as a student housing and live in the second floor yourself. The income would be tax free.
For having the mortgage you'd get tax deductions and the interest would be at around 3.1% fixed with 75% equity in the house. $500k down, you're paying $6400 a month on the $1.5 million loan and with such a big house the first floor could fit a kitchen, living room, 2 bathrooms and 10 bedrooms. That's easily 8k a month, you're not just living for free but you're getting paid to live. The remaining 1.5m can be put in index funds.
Can’t someone use this same logic for bit coin investing? The basis of your argument is that you should invest if you “some how know the prices will rise”.
That's really taking things out of context. You cant live in a bitcoin but you can in a house.
I am Asian and I don't understand why many Westerners always think about selling their houses in the future. Many Asians, including me, tend to view houses as the place we will live in as much as possible instead of renting the place for years. We don't buy with selling in the future in mind as a rule. Well, many Asians also have extended families so this mindset is something second nature to us.
2:38? (You mean $3,460)
Ahhh dang it.. yes. Typo.
@@BeatTheBush no prob. BTB is human too. It's OK to make mistakes...
If you want you can send me the videos and I can proof it before you post to YT ;)
Do you expect the housing market to repeat what its done for the last 10 years? I don't. Being house broke in 2019 sounds extremely dangerous.
I've seen the market go a long time up so I wouldn't know. I think risks are high just like most people think.
As always, *AMAZING* content. Looking to grow my small CZcams channel of 50 subscribers. Your videos definitely keep me going!
Whats house broke ???
Ahhh man... do I have to change it?
Okay, I changed it.