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Buy a house now? Or trailer now, house later?

Discussion in 'Stocks & Investments' started by gupster88, Apr 19, 2013.

?

Buy trailer now? Or house later

  1. Buy trailer now, save up some, sell it, buy a house later

    18 vote(s)
    20.5%
  2. Screw the trailerhood life, save up now, buy house sooner

    65 vote(s)
    73.9%
  3. You tell me

    5 vote(s)
    5.7%
  1. Apr 21, 2013 at 8:22 PM
    #41
    Osugoose

    Osugoose Well-Known Member

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    Buy the house.

    Trust me, I went the trailer route and now All I have is a gutted in-progress airstream remodel and no house:(
     
  2. Apr 22, 2013 at 5:09 PM
    #42
    hansdoward

    hansdoward Active Member

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    I'll bet you could list an Airstream on craigs list and sell it in less than a week. Getting out of rental sounds good, win win.
     
  3. Apr 23, 2013 at 4:02 AM
    #43
    gupster88

    gupster88 [OP] Well-Known Member

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    We came up with just about the same numbers. I think I have made up my mind to buy this trailer, save up more, pay off the Taco, and put a 20%+ down payment on a house in a couple years!

    Haha wow that sucks man. Lucky for me this trailer is already remodled, and I helped do it since its my parents' place!


    List it on Craigslit in the Charleston, WV area and I bet it goes quick. Even quicker if its around income tax season :cookiemonster:
     
  4. Apr 24, 2013 at 9:33 PM
    #44
    ChiveOn

    ChiveOn City Slickin' Redneck, I wear a suit with a mullet

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    Sweet Jebus, is your current place 10sqft for $475/month???? I'm paying $1,100 a month for a one bedroom....I gotta move to the states

    I have no idea about the housing market in the states but I do know that if someones says "dude I live in a trailer...etc" I tune out and instantly hear Banchoes while thinking of

    [​IMG]
     
  5. Apr 24, 2013 at 9:40 PM
    #45
    Pchop

    Pchop Beavis Killer

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    Neither, buy a hammer, go to construction projects and scrounge lumber. Half the shit they throw away you can build a house with. Go to Barnes and Noble and buy a book called "Tiny Homes, Simple Shelter by Lloyd Kahn" it will give you ideas.
    Go find a piece of land (which is the most key factor) that suites you, in WV land is extremely cheap compared to where I live.
    You have a truck, you will have land and you will have something you built. Nothing better than that. Only reason I havent done it is because I cant afford property here and I move to much.
    Moving twice in one year is nothing, thats the least of your worries, if your doing it to better your quality of life then its not a hassle.
     
  6. Apr 25, 2013 at 12:11 AM
    #46
    EricTheRed

    EricTheRed Damn dirty Swede

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    LOL, yeah...shit's expensive in our neck of the woods dude.

    You can't paint all trailer parks with the same brush though. There are a TON of very beautiful, properly managed parks in BC. I would assume it's the same pretty much anywhere you go.

    ...except Calgary. They're all turds there. XD
     
  7. Apr 25, 2013 at 12:19 AM
    #47
    EricTheRed

    EricTheRed Damn dirty Swede

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    Can you mortgage land in the US? The wife and I were hoping to do that up here but our mortgage broker told us that mortgages aren't issued for properties without dwellings on them. We could get a "land loan", but that requires a 50% down payment, and we don't have $50,000+ in cash lying around. Also, you have to consider the cost of running utilities to the building and/or possibly building a septic field. I was quoted $10-20k for that kind of work. Maybe it's different/cheaper in your neck of the woods, OP.
    Fuck it's expensive to live in Canada...lol.

    I do agree with scrounging construction sites and lumber yards...there's so much needless waste coming out of there! It would be so simple to go the "tiny home" route.
     
  8. Apr 25, 2013 at 7:20 AM
    #48
    OZ-T

    OZ-T All of those moments....will be lost.....in time

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    50% downpayment is probably your borrowing circumstance , it is not the standard , that is 25%
     
  9. Apr 25, 2013 at 7:42 AM
    #49
    blakes09

    blakes09 Toyota Tech..when im not Fishing

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  10. Apr 25, 2013 at 7:41 PM
    #50
    Twatwaffles

    Twatwaffles Well-Known Member

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    You guys have the cheapest real estate in the developed world. If your long term goal is to get into a house, then do it....but only if you can do 20% down and can afford rates at 12%.


    A lot of the reasons I've read here are also the reasons why you guys tanked your economy 5 years ago. Everyone seems to think of their home as a 'safe, appreciating asset' which it is completely not, and assign some sort of stigma to rentals; I can't help but laugh a little when I hear people say "you're throwing your money away" when you tell them you're renting for just slightly less than a mortgage payment. The reality is that the majority of new buyers are still renters; they’ve just gone from renting space to renting money.
     
  11. Apr 25, 2013 at 7:47 PM
    #51
    Pchop

    Pchop Beavis Killer

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    Yes you can mortgage land, but like OZ said they want more down, not sure what the % is though, 30-40% I have been hearing.
     
  12. Apr 25, 2013 at 8:13 PM
    #52
    Tacomada

    Tacomada Well-Known Member

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    Yes and no. Obviously people were way over leveraged. But reasonable debt isn't a terrible thing. Am housing prices aren't likely to decrease further for you guys.

    I agree with the renting money comment to a point. It's more like buying money at a premium..

    Think I it this way. You rent a place for 10 years for 5000 a year.

    For those same 10 years you buy a house worth 50000 and it cost you 25000 in interest.

    At the end of the ten years in the first situation a you have nothing left. But we will say you set aside the money you would have spent on interest. So you have 25000 dollars from 75000

    At the end of the second scenario you have a house ( assume no appreciation or depreciation) worth 50k. So you are 25k ahead...
     
  13. Apr 25, 2013 at 8:55 PM
    #53
    Twatwaffles

    Twatwaffles Well-Known Member

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    That's a very simplistic calculation. And you're missing lost opportunity costs, like the return you could have earned by investing your money instead of spending it on a down payment. In your example, and paying a more reasonable amount of interest (5.5% fixed on a 10 year amortization) and earning a modest 4.5% ROI, buying is only "better" after year 11, and very modestly so, and even by year 30, your savings are still fixed in the 3-4 digit level. Assume a more reasonable/aggressive ROI on your investments (5%) and home ownership in this example makes no sense whatsoever.


    Now let's take a more reasonable example. Rent of $1000 a month versus an average $300,000 home. Keeping the same interest rates (averaged to 5% fixed) and an averaged 5% ROI for the market funds, by year 5 you're looking at a cumulative cost of $147,269 to own that home, versus $66,415 to rent. By year 25, home ownership will have cost you $997,514 versus renting at $525,572.
     
  14. Apr 25, 2013 at 9:06 PM
    #54
    EricTheRed

    EricTheRed Damn dirty Swede

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    You might have missed the part where I said that our mortgage broker informed us that they don't mortgage land without a property on it. The "land loan" as he called it, requires a 50% down payment. Borrowing circumstances has nothing to do with it. His words, not mine.
    Perhaps that's just the policy of my bank (RBC), but he made it sound like that was a Canada-wide requirement. We spoke with him only a couple of weeks ago and haven't had time to seek a second opinion.
     
  15. Apr 25, 2013 at 9:11 PM
    #55
    650H1

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  16. Apr 25, 2013 at 10:59 PM
    #56
    cmack

    cmack Impeach Chris4x4!

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    no.
     
  17. Apr 26, 2013 at 8:49 AM
    #57
    Tacomada

    Tacomada Well-Known Member

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    My calculation was definitely simplistic. I don't think that's an apples to apples comparison. If you can rent the 300k home for a thousand a month it's certainly a better plan. At 5% interest thts 1750 a month though. Presumably if you can afford that. You will be rentin a nicer place.. I'm probably renting that 300k house for 2000...

    You've also ignored appreciation of the house. If 5% market return is reasonable. Then likely the home will see close to the same.

    So at 5% mortgage after 25 years the home has cost 524k and is now worth 450,000

    You invest the extra 750 payment in the rent situation for a 5% return. After 25 years thts 451k. So now the scenarios are essentially identical.

    But there are still more factors.. Investment income is taxable.. Of that 451k, over 200k is investment income. Not 100% on us tax but in canada that would be taxed at a higher rate.. Say the government takes 25%. Now after renting you're only left with 401k. Furthermore. I believe mortgage interest is tax deductible in the US.

    Then you have to factor in home ownership costs like insurance and repairs. It's a complicated question no doubt. But in my mind unless you are an absolute frugal renter. The house is a good way to 'force' savings... In canada our mortgages are much more restricted than yours bit the same logic applies
     
  18. Apr 26, 2013 at 8:58 AM
    #58
    OZ-T

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    Long and short of it is , you don't need a 50% down payment on land sales

    Raw lots here are between $300K and $500K and nobody is forking out half of that in a down payment
     
  19. Apr 26, 2013 at 8:59 AM
    #59
    tooter

    tooter play every day

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    Spot on.

    My wife and I built our own tiny home and own it outright with no mortgage. :)
     
  20. Apr 26, 2013 at 9:04 AM
    #60
    Tacomada

    Tacomada Well-Known Member

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    There will certainly be different options. RBC may have that policy. I bought land not to long ago. Given my circumstance I required 35% down and financed the remaining with a secured line of credit. (Secured by the land).

    Lots of banks won't go to the minimum (25 %) in canada.

    A possible route for land buyers is to buy Land with a trailer on it. Then you can rent the trailer or live in it until you are ready to buy. Sell the trailer and build when the time is right. Can be difficult to find the right piece o land with a trailer on it...
     
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