Home buying thread

Vinen said:

My uninformed opinion says don't do this unless you can afford both mortgages.

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I mean, this has to be sound advice.

A rental property can be vacant; if you can't afford to pay for it while its vacant, then you can't afford it as a rental property.

At least, thats where my mind goes.

Cad said:

Sure, it also means that nobody is ever able to afford any business ever. Could anybody afford to operate their business if nobody bought their products?

You should be able to afford a reasonable vacancy rate, maintenance, upgrades, etc.

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Well, I mean, starting/opening a business is a risk, and a financial pit that you throw money down.

The hope is to get a return before you run out of money.

So, you'll be fronting the startup (cost until its rented, at this point), and hoping you make enough while its rented to cover overhead (maintenance, upgrades, vacancy rate).

I don't see where we're that far apart in our though processes?

Lanx said:

Insist on English around the kid at all times. You don't want your kid to have even a hint of an accent.

With that much Chinese around the house, it'll probably be impossible. Are they speaking at least cantonese? Or do they speak the dogs language of Mandarin?

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They speak High-Elf I mean Shanghainese you dirty commoner. (I can speak both Mandarin and Shanghainese half-assed). My wife has almost no accent when she speaks English.

Is Lanx a self hating Asian?

Lanx said:

If that was the case, I would kept going after white girls,

Gotten eyelid surgery

And changed my name to bob

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You're confusing, man

But I get it.

fris said:

any advice on buying a new home and keeping your current (10 years left on mortgage) as a rental property? how much $$ should you have in reserve?

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I've done this twice now. My original home I bought in 2003. Market crashed in 2008. In 2011 I bought another home, I kept the 2003 home because it was still upside down and I didn't want to unload it for a loss, so I rented it out. Last year I bought a new home, I turned my 2011 home into a rental, so now both rentals and my new home.

I would say you should have 6 months worth of mortgage payments in the bank for reserve (i.e. you could pay your mortgage for 6 months even if it stays empty).

The most important thing to do is research on rental comps in your area. How much could you rent your home for? Will that cover your current mortgage, insurance, taxes, etc? Also note that when you convert your home to a rental, you will lose a lot of the tax benefits. You will no longer be able to deduct your mortgage interest. Any profit you make on the home becomes taxable income.

Next, research how hot is the rental market in your area. Are there a lot of rentals available on the market? Few? How many days/months does the typical rental stay on market until it gets filled?

For myself, I live in California, the rental market is extremely strong here. My 2003 home I have rented to 4 different families in the past 14 years. Each time it took 2 weeks or less to get a new lease signed. For my 2011 home I have a tenant in there from 2016, so fairly new, it also took less than 2 weeks to get a lease signed.

Bottom line......if you have money in the bank to pay the mortgage for a few months (I recommend 6), and the rental market is good in your area, then I think it's a good move. Conversely, if rentals don't really do well in your area, or you don't have much of a financial cushion, then probably you would be better off selling your home (assuming profit), and putting the money into your new home to bring down your monthly payments.

fris said:

any advice on buying a new home and keeping your current (10 years left on mortgage) as a rental property? how much $$ should you have in reserve?

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As mentioned, enough for a few months rent of course, but if you haven't already, check how landlord-friendly the rental laws are in your state. It shouldn't be hard to get an idea of how much an eviction can cost, how long it can take, and how much it might cost to get the place rentable again after someone who hates you has control of your property for a few months. You should also have a pretty good idea of what major repairs are coming up in the next few years too, and start setting aside money for them now (roof, hvac, major appliances, etc.). Just consider what your worst case scenarios are, and in the (unlikely) event that one happens, will you be able to deal with it?

I think most people just wing it at first, and that might be ok with a home you have no equity in, but with something that's getting pretty close to being paid off? I might be more risk averse. It may be a better bet to sell your house now and buy something specifically to rent. You'll be capturing your equity in a pretty favorable market, you'll have less at risk on the rental, and you'll be able to choose something specifically for maximizing the rental value. (The homes that most people like to live in probably aren't the most profitable rentals). Also, if you sell now, I assume that you'll be able to take advantage of the primary residence tax exemption. However, once you've rented for long enough, you'll lose that and will only be able to 1031, which is more restrictive and only applies to another rental property.

Also, be sure to budget enough in rent to cover a good property manager, best money you'll ever spend (once you find a good one).

good feed back, thanks. the rental market in my area is good. comps tell us we should be able to charge about $500 over our mortgage. we refinanced to a 15 year about 6 years ago, so could be more profitable if it was a 30. our neighbor moved and rents his home. family moved in weeks after he moved out and has been there for 3 years. other side of the extreme, we bought our home from someone that was renting it as a short sale. previous renters trashed the place, lots fixing up. replaced garage door, all carpet & venal floors to natural slate, etc. we've kept a home warranty the whole time and it's at least broke even and probably saved us money. one year we had our whole AC replaced. they're very resistant to work with, but worth it in our mind.

so while I think it's a good idea, i think the 6 months + possible repairs fund is a good idea.

Lanx said:

Insist on English around the kid at all times. You don't want your kid to have even a hint of an accent.

With that much Chinese around the house, it'll probably be impossible. Are they speaking at least cantonese? Or do they speak the dogs language of Mandarin?

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You sound like my mother in law with the cantonese lol - I really want to go visit her extended people in China - but so expensive - someday, once the kids are a little older.

your house may not look asian, but does it smell asian? (btw asian smelling houses are, out of all the ethnic smells, the best)

Lanx said:

so far, no, neither have my previous apartments. I always use the range hoods and i have zero chinese herbal ointments or ginseng around.

i myself don't believe in chinese fufu medicine. sure when mom cooks herbal soup or tea i'll drink it... only to please her, she'll give me a few quarts and i'll take it home and drink it up. but i never go out and cook it myself... i have zero knowledge on chinese "herbal" anything so in turn i also have zero chinese herbal drinks, which is what permeates a house, cuz you're cooking that shit for hours at a time... and you're brewing herbs so it's not horrible like vis a vis if you were to goto an indian home the pungent smell of curry will kill half your senses.

most of my 2nd/3rd gen friends are the same way, if they do not live with their parents on either side, they don't do the herbal soups, and in turn they don't have a chinese smelling house really.

is this what youre smelling? herbs? if it is, ask to check out their herbal stock, usually they'll be stored in big ass glass jars in the basement, take a whiff.


Yea if you think foh is bad with American Inventors and DREAMERS, Chinese hate other regional Chinese with as much hatred. I guess it's more akin to Boston v. NYC, only we don't have a silly accent ot sports team to separate us, just centuries of hatred. (Which is really rooted in superiority).

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What Generation are you? Both my wife and her parents are 1st Generation immigrants. Wife has just integrated quite a bit more than other 1st gen.

Lanx said:

asian born in America, so i'm 2nd gen, with a 3rd gen upbringing, since my white neighborhood and friends practically raised me.

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Explains why you are a self-hating Asian.