User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Buy house or car?

Sun Jun 16, 2019 2:20 am

Here's the story:

I'm in the Seattle area, where the housing market is hotter than a summer in Phoenix. My lease is currently $1800/month and unless we experience a sudden crash in the economy this year, it doesn't look like my lease rates will go down any further. Enter the decision to buy a place and start building equity. Many houses are starting out at decent prices (decent for a hot market) and they're selling out quickly.

Here's the second angle: the car I have is a 2013 Rio. It has held together pretty well, though I've been in the market looking for options (refer to the various threads on the subject). In a state as expensive as WA, getting a hybrid or electric is definitely a huge plus since you'd save some money on gas. My main concerns is that as the car ages it will start asking for maintenance. Ordinarily this wouldn't be an issue except that if I decide to buy the house, I'd be about 25 miles from work (about 40 minutes in total commute time), around the outskirts of Tacoma. I've thought about mitigating this with public transportation as there is a train that goes between Tacoma and Seattle in the busy commute hours, at $8/rt.

So what should I go for?

For context: I have no further debts except a mortgage in Maryland being paid through rent and credit cards that are always paid in full.
"You haven't seen a tree until you've seen its shadow from the sky."
 
User avatar
Aaron747
Posts: 9346
Joined: Thu Aug 07, 2003 2:07 am

Re: Buy house or car?

Sun Jun 16, 2019 2:31 am

Building equity is smart on paper but carries a lot of risk as you’re banking on a strong market and solid economy nationally/globally for the duration of the loan. Banks don’t give a shit as they’ll get a bailout and you or I won’t.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
Airstud
Posts: 4627
Joined: Wed Nov 29, 2000 11:57 am

Re: Buy house or car?

Sun Jun 16, 2019 2:31 am

A) How much is left on the mortgage in Maryland?

2) Why the hell are you paying a mortgage in Maryland?
Pancakes are delicious.
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Sun Jun 16, 2019 2:42 am

Airstud wrote:
A) How much is left on the mortgage in Maryland?

2) Why the hell are you paying a mortgage in Maryland?

A) 28 years

2) I lived in Maryland, bought a place thinking I would stay there for a few years, and out of nowhere got a good job offer to the Seattle area. I would sell the house BUT it is still being developed (though HOA finally passed to our hands so that means 75% of the units have been sold).
"You haven't seen a tree until you've seen its shadow from the sky."
 
User avatar
DocLightning
Posts: 21480
Joined: Wed Nov 16, 2005 8:51 am

Re: Buy house or car?

Sun Jun 16, 2019 2:50 am

Sell the place in MD and then use the funds from that sale to buy a place in WA. A car depreciates quickly. You keep the car until it dies. A house appreciates, especially in that region.
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
mham001
Posts: 5519
Joined: Thu Feb 03, 2005 4:52 am

Re: Buy house or car?

Sun Jun 16, 2019 3:14 am

You have to do the math. Figure all your costs to buy and maintain, include taxes and interest in your desired area. Then get out your crystal ball and decide how much appreciation you might see less inflation, subtract your costs and you get return on investment. Then put that up against a years's rent. The Seattle market has cooled a bit, so there is that. You also consider how long you plan to stay, this matters because you'll be eating closing costs in escrow and sales commission when leaving. It is not always a slam dunk unless the market stays hot, Seattle may be played out.

What area are you considering? I have a line on a Beacon Hill house not yet up for sale.

Selling Maryland after 10 years should be looked at carefully with the same considerations as above, how much are you making? At this point you are getting into the meat of paying down the principle, renters doing that for you is a wonderful thing, if you have the stomach being a landlord.

New cars are a quickly depreciating asset, never a good investment. A two year old car is better value. Used Model 3's are beginning to hit the market. I bought a used Leaf 4 years ago for $7k, it is fine for city life but you'll be spending money on rentals for trips. Too bad it costs more for electricity in California than it does to drive an equivalent gas car, you won't have that problem with Seattle City Light.
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Sun Jun 16, 2019 3:26 am

mham001 wrote:
What area are you considering? I have a line on a Beacon Hill house not yet up for sale.

Puyallup area. WAY south of Seattle, but my workplace is in Kent. Speaking to folks who have been here since the 90s, they've all mentioned that if I want affordable housing, I'll have to stomach the commute.

mham001 wrote:
A two year old car is better value. Used Model 3's are beginning to hit the market. I bought a used Leaf 4 years ago for $7k, it is fine for city life but you'll be spending money on rentals for trips. Too bad it costs more for electricity in California than it does to drive an equivalent gas car, you won't have that problem with Seattle Light.

I'd definitely look into a used car. No need to get the latest and greatest. I'd consider electric if it weren't for the fact that my current rental place has no charging station (neither does my workplace). So hybrid seems to be the way to go at the moment.
"You haven't seen a tree until you've seen its shadow from the sky."
 
anrec80
Posts: 1986
Joined: Mon Jan 10, 2011 7:50 am

Re: Buy house or car?

Sun Jun 16, 2019 4:31 am

I also have a home in Redmond WA, that I am renting out after I moved to New York, and still have the car I bought in 2005 when I first moved to Seattle from Canada. My take is this:
a) Stick to the car you have until it dies. It hasn’t lost in quality much yet, but did quite a bit in value. A new hybrid will be expensive to buy. And used one - what happens when it’s time to replace its battery? If you are talking about highway commute, savings on gas will be rather small - highway mileage of Toyota Prius isn’t that much better than that of Toyota Corolla. Save that $$$ for down payment or keep savings in case your home needs repairs or you are out of work.

b) Certainly consider buying. BUT - that only works if you plan to stay there long term (7-10 years), raise the family there, etc. Cost of buy/sell transaction with a home is huge - 8-10% (realtor’s fees, closing, some inevitable pre-sale repairs). Plan in such a way that you need a paid-for piece of property before you retire. Also - your age matters. If you are in your 20s, maybe early 30s - then 30 year mortgage is OK. If you are in your late 30s or older - a home that you cannot buy comfortably with 15 year mortgage is out of your league, sorry.

So if you really like Seattle area and want to stay there long term - I would prioritize a house over a car.
 
chimborazo
Posts: 233
Joined: Sun Sep 25, 2011 7:51 pm

Re: Buy house or car?

Sun Jun 16, 2019 8:12 am

Buy a new car and live in it :-)
 
anrec80
Posts: 1986
Joined: Mon Jan 10, 2011 7:50 am

Re: Buy house or car?

Sun Jun 16, 2019 8:47 am

chimborazo wrote:
Buy a new car and live in it :-)

Well - since the topic author talks about buying a home - we hope he is not there yet.
 
User avatar
Dutchy
Posts: 9531
Joined: Sat Nov 03, 2007 1:25 am

Re: Buy house or car?

Sun Jun 16, 2019 9:00 am

einsteinboricua wrote:
Here's the story:

I'm in the Seattle area, where the housing market is hotter than a summer in Phoenix. My lease is currently $1800/month and unless we experience a sudden crash in the economy this year, it doesn't look like my lease rates will go down any further. Enter the decision to buy a place and start building equity. Many houses are starting out at decent prices (decent for a hot market) and they're selling out quickly.

Here's the second angle: the car I have is a 2013 Rio. It has held together pretty well, though I've been in the market looking for options (refer to the various threads on the subject). In a state as expensive as WA, getting a hybrid or electric is definitely a huge plus since you'd save some money on gas. My main concerns is that as the car ages it will start asking for maintenance. Ordinarily this wouldn't be an issue except that if I decide to buy the house, I'd be about 25 miles from work (about 40 minutes in total commute time), around the outskirts of Tacoma. I've thought about mitigating this with public transportation as there is a train that goes between Tacoma and Seattle in the busy commute hours, at $8/rt.

So what should I go for?

For context: I have no further debts except a mortgage in Maryland being paid through rent and credit cards that are always paid in full.


Depends on all what your long term goals are: how long do you expect to stay in the area, do you want to keep your house in Maryland and why (if the market is good in MA, then perhaps selling the property at a profit and use the profit to buy your home in WA might be a better option), what is your outlook at the WA market, will it soften in a year? Perhaps the prices might be coming down a bit?

As for your car, it should be a separate decision, if the financials work for you, go for it, but a car, like others have said, isn't an investment, but an expense. A Tesla 3 is nice and if it takes a few your current expenses in gas and maintenance away it might cover the cost a bit. The same for taken the train, that might come out at the top, especially if you don't have to own a car.

As with everything, just make a model for yourself in excel and see what it does for you and make sure you stay on the financial good side if something happens to you, having a house is less liquid than owning some type of investment.
Many happy landings, greetings from The Netherlands!
 
User avatar
Aesma
Posts: 11640
Joined: Sat Nov 14, 2009 6:14 am

Re: Buy house or car?

Sun Jun 16, 2019 11:24 am

2013 car should be fine. My 2002 car is long in the tooth, though, with a long list of "little things" that need fixing, even though the basics are OK (engine, drivetrain, no rust).

I can't imagine paying 1800 anything per month, as that's basically my take home pay. So if anything I'd want that to be building equity not "go away" as rent, but I'm French and that's the French way of seeing things. Also here real estate has been going up without a hitch for more than 25 years.

I think Seattle is an attractive city and should stay that way, but I don't know the local market so Tacoma doesn't talk to me.

Looking at a map, you could take a speedboat or floatplane from Tacoma to Seattle !
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
JJJ
Posts: 3241
Joined: Wed May 31, 2006 5:12 pm

Re: Buy house or car?

Sun Jun 16, 2019 11:32 am

einsteinboricua wrote:
Here's the story:

I'm in the Seattle area, where the housing market is hotter than a summer in Phoenix. My lease is currently $1800/month and unless we experience a sudden crash in the economy this year, it doesn't look like my lease rates will go down any further. Enter the decision to buy a place and start building equity. Many houses are starting out at decent prices (decent for a hot market) and they're selling out quickly.

Here's the second angle: the car I have is a 2013 Rio.


For most people buying a car or paying for a place to live is a question of "or" but rather how much of each.

Your car can perfectly hold for a few more years with minimum maintenance. Or you can trade it for a newer (not necessarily brand new) similar car for a few thousand. Find out how much you pay for gas for a whole year and you'll realise hybrids, not to mention electrics, come with a hefty upfront cost it will take years to compensate.

Financially speaking whatever amount you sink into a depreciating asset like a car is bad so it makes perfect sense to keep it low. But a car is also a measure of success and social status, so find a budget you're comfortable with and go along with that.
 
aviationaware
Posts: 2812
Joined: Mon May 19, 2014 12:02 pm

Re: Buy house or car?

Sun Jun 16, 2019 11:48 am

I don't understand the question. The premise is just wrong.

It assumes that the only ways to invest your liquidity is buying
a) a rapidly depreciating asset (I don't assume you mean some kind of rare vintage car that retains or increases in value); or
b) an overpriced asset that might fall victim to deflation.

There are plenty of other assets you could buy with that money. Only ever buy a car if it will help you earn more money than you'd make if you didn't own one. Never buy the apartment/house you live in/want to live in.
 
Okie
Posts: 4019
Joined: Wed Jul 16, 2003 11:30 am

Re: Buy house or car?

Sun Jun 16, 2019 12:37 pm

DocLightning wrote:
Sell the place in MD and then use the funds from that sale to buy a place in WA. A car depreciates quickly. You keep the car until it dies. A house appreciates, especially in that region.

Doc laid it out for you quite precisely.
Let me add that your mortgage company is going to only loan you the amount of money that includes all taxes, insurance, credit card payments, other debt payments and CAR LOANS you have until your load is 33-35% of your income.
DO NOT Buy the car until you CLOSE on you new house unless of course you want to spend that $500 car payment on a depreciating item. That will severely limit the house that is available to you.

Okie
 
Ken777
Posts: 9863
Joined: Thu Mar 11, 2004 5:39 am

Re: Buy house or car?

Sun Jun 16, 2019 5:13 pm

I've never had a car that performed for me like owning a home has. Each home purchase has delivered a tidy profit, making the transition to the next home. Right now we are getting ready to down size (a huge task) and the sale of the current house will cover that more with retirement funds to spare. All car purchases have done is depreciate, which is why we tend to drive them around 15 years these days.

Personally I'd keep the car and buy the house. Look for one with a small yard for easy care and everything you want (like a/c and and a dishwasher) then get the home warranty to cover ap]pliances.
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Sun Jun 16, 2019 5:58 pm

Ken777 wrote:
Look for one with a small yard for easy care and everything you want (like a/c and and a dishwasher) then get the home warranty to cover ap]pliances.

Townhouse for me. Not that I can't do yard work but I'd rather not have a yard falling apart due to lack of time.
"You haven't seen a tree until you've seen its shadow from the sky."
 
Ken777
Posts: 9863
Joined: Thu Mar 11, 2004 5:39 am

Re: Buy house or car?

Sun Jun 16, 2019 7:15 pm

Nothing wrong with a townhouse or detached condos. I consider purchasing the same as buying a house. Actually the wife and I are look at condos right now.

One trick for home buyers - get an amortization schedule on your loan and pay two full months at once by adding the last unpaid principle amount on the list to your payment. On my first house that was adding $16 to the monthly payment. The other option is wait until the end of the loan and pay 15, 25 or 30 years of interest. When I had paid off the house I had cut off about 5 years off a 30 year VA loan.
 
mham001
Posts: 5519
Joined: Thu Feb 03, 2005 4:52 am

Re: Buy house or car?

Sun Jun 16, 2019 8:52 pm

Ken777 wrote:
One trick for home buyers - get an amortization schedule on your loan and pay two full months at once by adding the last unpaid principle amount on the list to your payment. On my first house that was adding $16 to the monthly payment.


Isn't that a constantly moving target?
 
luckyone
Posts: 2773
Joined: Thu Aug 21, 2008 1:50 pm

Re: Buy house or car?

Mon Jun 17, 2019 1:16 am

aviationaware wrote:
I don't understand the question. The premise is just wrong.

It assumes that the only ways to invest your liquidity is buying
a) a rapidly depreciating asset (I don't assume you mean some kind of rare vintage car that retains or increases in value); or
b) an overpriced asset that might fall victim to deflation.

There are plenty of other assets you could buy with that money. Only ever buy a car if it will help you earn more money than you'd make if you didn't own one. Never buy the apartment/house you live in/want to live in.

A) I agree. I was always told that “a car loses at least 10% of its value the minute you drive it off the lot. I’ve never purchased a brand new car.
B) Unfortunately that is always the risk when buying a house. Interestingly, last time housing costs collapsed in the US (and they certainly will again) it was the exurbs that were hit the hardest. Areas far from city centers where people were buying because they were cheaper. Think Stockton, Riverside County, the outer suburbs of Atlanta where a lot of my family and friends are. That’s not to say that will happen again, but it’s worth considering.

Geographically constrained cities like Seattle, NY, SF etc tend to have some buffer.
 
aviationaware
Posts: 2812
Joined: Mon May 19, 2014 12:02 pm

Re: Buy house or car?

Mon Jun 17, 2019 1:44 am

luckyone wrote:

Geographically constrained cities like Seattle, NY, SF etc tend to have some buffer.


That's true, but you also have to think about where that buffer comes from, and that's mainly:
a) High demand due to many high income jobs in the area
b) Foreign investors regarding it as a safe haven

both of which can change rather rapidly in a true economic meltdown that includes large scale bankruptcies, and then you're stuck with an asset that you can't sell quickly.

The main problem with real estate is that most people buy the house they (want to) live in themselves and that's a recipe for disaster as you bring emotions into the investment decision.

Also, you don't only put all eggs in one basket but you even loan to buy those eggs. Now I'm not someone who believes in this modern diversification mantra, I think diversification of assets as taught in portfolio management classes in business schools these days is terrible and a recipe for mediocrity, but you should have SOME diversification in your assets - unless you truly believe that the house you're buying there is the single best investment you can make in your life. And you're unlikely to be rational in that decision since you're probably (going to be) living in that house, and you have all those romanticized family function fantasies in your head that cloud your judgement.

If you go by these simple rules with real estate you'll never go wrong:
1) Never buy the house you (want to) live in.
2) Never buy in a market that's already hot because you think it'll get ever hotter. It'll crash eventually and then you'll have a very illiquid and hard to sell asset on your ass that costs money (taxes & maintenance) and may not earn any or, in a best case scenario, will underperform what you could have gotten from a non-RE investment.
 
User avatar
777Jet
Posts: 6972
Joined: Sat Mar 08, 2014 7:29 am

Re: Buy house or car?

Mon Jun 17, 2019 4:12 am

Buy a house / another property. Vehicles are a liability and depreciate in value from day one. If you can get by on public transport do so; the commute may be longer but you can use the time you sit there getting stuff done on electronic devices. I invest as much of my money as I can into real estate. Even if prices drop it doesn't matter unless you plan to sell soon. You will always have a place to live or rent out for an income with a property. If you buy into the right area / market you will make money.I think real estate is the safest bet by far. You might not make quick gains like on the share market but you won't get wiped out either and you have somewhere to live if need be. Real estate 100%
DC10-10/30,MD82/88/90, 717,727,732/3/4/5/7/8/9ER,742/4,752/3,763/ER,772/E/L/3/W,788/9, 306,320,321,332/3,346,359,388
 
User avatar
Aaron747
Posts: 9346
Joined: Thu Aug 07, 2003 2:07 am

Re: Buy house or car?

Mon Jun 17, 2019 4:21 am

aviationaware wrote:
luckyone wrote:

Geographically constrained cities like Seattle, NY, SF etc tend to have some buffer.


That's true, but you also have to think about where that buffer comes from, and that's mainly:
a) High demand due to many high income jobs in the area
b) Foreign investors regarding it as a safe haven

both of which can change rather rapidly in a true economic meltdown that includes large scale bankruptcies, and then you're stuck with an asset that you can't sell quickly.

The main problem with real estate is that most people buy the house they (want to) live in themselves and that's a recipe for disaster as you bring emotions into the investment decision.

Also, you don't only put all eggs in one basket but you even loan to buy those eggs. Now I'm not someone who believes in this modern diversification mantra, I think diversification of assets as taught in portfolio management classes in business schools these days is terrible and a recipe for mediocrity, but you should have SOME diversification in your assets - unless you truly believe that the house you're buying there is the single best investment you can make in your life. And you're unlikely to be rational in that decision since you're probably (going to be) living in that house, and you have all those romanticized family function fantasies in your head that cloud your judgement.

If you go by these simple rules with real estate you'll never go wrong:
1) Never buy the house you (want to) live in.
2) Never buy in a market that's already hot because you think it'll get ever hotter. It'll crash eventually and then you'll have a very illiquid and hard to sell asset on your ass that costs money (taxes & maintenance) and may not earn any or, in a best case scenario, will underperform what you could have gotten from a non-RE investment.


If you are going to play Russian roulette and get in bed with a bank, Aviationaware’s advice is highly sound and logical.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
User avatar
TWA772LR
Posts: 6764
Joined: Thu Nov 17, 2011 6:12 am

Re: Buy house or car?

Mon Jun 17, 2019 4:24 am

Buy a house.

Then when you feel comfortable enough, buy a car. Maybe by then the support infrastructure for electric vehicles will be sufficient for true widespread use, on the level that gas powered cars is. If EV infrastructure isnt up to snuff by then, get a hybrid.
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
TheF15Ace
Posts: 279
Joined: Fri Mar 04, 2011 10:27 am

Re: Buy house or car?

Mon Jun 17, 2019 5:11 am

You can sleep in a car but you can't race a house :old:
 
luckyone
Posts: 2773
Joined: Thu Aug 21, 2008 1:50 pm

Re: Buy house or car?

Mon Jun 17, 2019 11:23 am

Aaron747 wrote:
aviationaware wrote:
luckyone wrote:

Geographically constrained cities like Seattle, NY, SF etc tend to have some buffer.


That's true, but you also have to think about where that buffer comes from, and that's mainly:
a) High demand due to many high income jobs in the area
b) Foreign investors regarding it as a safe haven

both of which can change rather rapidly in a true economic meltdown that includes large scale bankruptcies, and then you're stuck with an asset that you can't sell quickly.

The main problem with real estate is that most people buy the house they (want to) live in themselves and that's a recipe for disaster as you bring emotions into the investment decision.

Also, you don't only put all eggs in one basket but you even loan to buy those eggs. Now I'm not someone who believes in this modern diversification mantra, I think diversification of assets as taught in portfolio management classes in business schools these days is terrible and a recipe for mediocrity, but you should have SOME diversification in your assets - unless you truly believe that the house you're buying there is the single best investment you can make in your life. And you're unlikely to be rational in that decision since you're probably (going to be) living in that house, and you have all those romanticized family function fantasies in your head that cloud your judgement.

If you go by these simple rules with real estate you'll never go wrong:
1) Never buy the house you (want to) live in.
2) Never buy in a market that's already hot because you think it'll get ever hotter. It'll crash eventually and then you'll have a very illiquid and hard to sell asset on your ass that costs money (taxes & maintenance) and may not earn any or, in a best case scenario, will underperform what you could have gotten from a non-RE investment.


If you are going to play Russian roulette and get in bed with a bank, Aviationaware’s advice is highly sound and logical.

I don’t disagree. I just purchased a modestly-sized property in Seattle that meets our needs, below list and we avoided properties where the selling realtors were trying to suggest we would need an escalator. The monthly payment is 1/4 of MY monthly take home—not factoring my spouse’s income. We can rent the property if we need and have no plans to sell for at least ten years. We fully expect the market to lose some steam in the next year or so, but as a psychiatrist my specialty is in very high demand and that demand goes up during times of economic stress.
 
slider
Posts: 7385
Joined: Wed Feb 25, 2004 11:42 pm

Re: Buy house or car?

Mon Jun 17, 2019 12:53 pm

Buying a new car--brand new--is one of the more financially unwise things to do, actually.

I'd almost always say buy a house, build equity and that's how you start to build true wealth. But given the overheated Seattle market, who knows how long that'll continue. There has to be a limit to things there; when the median home price is $600k, there's bound to be some adjustment, especially if Chinese investment withers a bit.

The length you want to keep the house is also a factor, and how much you have to put into it, insofar as remodeling, etc. And property taxes and so on.

Good luck!
 
anrec80
Posts: 1986
Joined: Mon Jan 10, 2011 7:50 am

Re: Buy house or car?

Mon Jun 17, 2019 1:40 pm

luckyone wrote:
as a psychiatrist my specialty is in very high demand and that demand goes up during times of economic stress.


Wow - nice choice of profession!!! Hardship resistant, most importantly. No wonder you can afford to support your family on your income alone, but there aren’t many in this country like this.
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Mon Jun 17, 2019 2:10 pm

Thank you all for your input.

I've submitted for a credit check to see what options are available in terms of rates. This townhome is similar to the one I have in MD (albeit smaller) and I do not intend to make it my forever home. I mean, it's good for a couple with no kids; it's good for two single folks. It's really a bachelor's home. And unless Microsoft, Boeing, AND Amazon all decide to move out of the Puget Sound area, there's gonna be some stability in terms of pricing, especially if Tacoma itself can sustain the market.
"You haven't seen a tree until you've seen its shadow from the sky."
 
NIKV69
Posts: 12645
Joined: Wed Jan 28, 2004 4:27 am

Re: Buy house or car?

Mon Jun 17, 2019 2:29 pm

DocLightning wrote:
Sell the place in MD and then use the funds from that sale to buy a place in WA. A car depreciates quickly. You keep the car until it dies. A house appreciates, especially in that region.


Myself and Doc are polar opposites in politics but I agree with him here. I bought a condo when the market was crap and it has appreciated 100% in value. Real estate is always a winner over the long haul. Both my vehicles are old but they save me tons of money.
Nikon from day one, Nikon till I die,
 
User avatar
DocLightning
Posts: 21480
Joined: Wed Nov 16, 2005 8:51 am

Re: Buy house or car?

Mon Jun 17, 2019 2:38 pm

NIKV69 wrote:
Real estate is always a winner over the long haul.


I'm going to respectfully disagree with "always," but perhaps we can agree on "almost always."
-Doc Lightning-

"The sky calls to us. If we do not destroy ourselves, we will one day venture to the stars."
-Carl Sagan
 
NIKV69
Posts: 12645
Joined: Wed Jan 28, 2004 4:27 am

Re: Buy house or car?

Mon Jun 17, 2019 3:05 pm

DocLightning wrote:
NIKV69 wrote:
Real estate is always a winner over the long haul.


I'm going to respectfully disagree with "always," but perhaps we can agree on "almost always."



Over a long period I will take it every time. Let's go half on something!
Nikon from day one, Nikon till I die,
 
User avatar
Aaron747
Posts: 9346
Joined: Thu Aug 07, 2003 2:07 am

Re: Buy house or car?

Mon Jun 17, 2019 4:10 pm

NIKV69 wrote:
DocLightning wrote:
NIKV69 wrote:
Real estate is always a winner over the long haul.


I'm going to respectfully disagree with "always," but perhaps we can agree on "almost always."



Over a long period I will take it every time. Let's go half on something!


Case in point - my grandparents enjoy a wealthy retirement because they went in with another couple on a vacation property near Lake Tahoe in 1974 when the market was near bottom - their share was $22K then. They sold the property in 2006 when too old to drive up there anymore, and their share of the profit was close to $600K.
If you need someone to blame / throw a rock in the air / you'll hit someone guilty
 
GalaxyFlyer
Posts: 3373
Joined: Fri Jan 01, 2016 4:44 am

Re: Buy house or car?

Mon Jun 17, 2019 4:59 pm

That’s very dependent on location and economic trends. I live in western Mass and I’d, in real dollars, lose money on my house if I sold today. It wasn’t an investment, it was a long-term (29 years) purchase of housing. People in southern Fairfield county Connecticut are taking baths trying to sell. I know people in upstate NY who can sell their house for what paid 30 years ago.
 
User avatar
ER757
Posts: 3425
Joined: Tue May 10, 2005 10:16 am

Re: Buy house or car?

Mon Jun 17, 2019 5:24 pm

einsteinboricua wrote:
mham001 wrote:
What area are you considering? I have a line on a Beacon Hill house not yet up for sale.

Puyallup area. WAY south of Seattle, but my workplace is in Kent. Speaking to folks who have been here since the 90s, they've all mentioned that if I want affordable housing, I'll have to stomach the commute.

mham001 wrote:
A two year old car is better value. Used Model 3's are beginning to hit the market. I bought a used Leaf 4 years ago for $7k, it is fine for city life but you'll be spending money on rentals for trips. Too bad it costs more for electricity in California than it does to drive an equivalent gas car, you won't have that problem with Seattle Light.

I'd definitely look into a used car. No need to get the latest and greatest. I'd consider electric if it weren't for the fact that my current rental place has no charging station (neither does my workplace). So hybrid seems to be the way to go at the moment.

First off - glad to hear that you are planning to stay in the Seattle area for a while. :bigthumbsup:
Just a word on that commute - Puyallup to Kent would be a killer - you might be able to find something affordable in Renton or even Kent (I live in a townhouse in Kent and I am by no means wealthy). If not, maybe think east - North Bend perhaps. About as far as Puyallup but not into the teeth of traffic doing the rush hour commute. If you do settle on Puyallup, you could do the Sounder to Kent and then the 150 bus to your office (I am pretty sure I know where your office is and the bus goes right there).
Good luck
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Mon Jun 17, 2019 5:52 pm

ER757 wrote:
Just a word on that commute - Puyallup to Kent would be a killer - you might be able to find something affordable in Renton or even Kent (I live in a townhouse in Kent and I am by no means wealthy). If not, maybe think east - North Bend perhaps. About as far as Puyallup but not into the teeth of traffic doing the rush hour commute. If you do settle on Puyallup, you could do the Sounder to Kent and then the 150 bus to your office (I am pretty sure I know where your office is and the bus goes right there).
Good luck

But you likely were in the Seattle area BEFORE it got hot, which probably why you were able to afford in Kent.

There are some new places opening up in Kent, but those are single family houses and they start in the low $400s which is WAY out of my means. Used places sell closer to what I want, but I'd be out of luck in terms of incentives, like no closing costs and little to no down payments.
"You haven't seen a tree until you've seen its shadow from the sky."
 
User avatar
casinterest
Posts: 8854
Joined: Sat Feb 12, 2005 5:30 am

Re: Buy house or car?

Mon Jun 17, 2019 5:59 pm

You are in Seattle, by a houseboat :)

Seriously though, I would buy the car first and rent. Especially as you still own a property in MD. But make sure the car is used.
Where ever you go, there you are.
 
User avatar
Dieuwer
Posts: 1347
Joined: Tue Dec 26, 2017 6:27 pm

Re: Buy house or car?

Mon Jun 17, 2019 9:19 pm

How about using this calculator: https://www.nytimes.com/interactive/201 ... lator.html

If I was in the market to rent or buy a home in Seattle, I would probably wait a little longer. According to the St. Louis FED, the housing market in Seattle is cooling right now. I would give it another year or two and then consider buying.

https://fred.stlouisfed.org/series/SEXRNSA

(Click "Edit Graph", "Change from Year Ago", ENTER)
 
User avatar
trpmb6
Posts: 2611
Joined: Thu Apr 19, 2018 5:45 pm

Re: Buy house or car?

Mon Jun 17, 2019 9:41 pm

a 2013 car is still "new" imo. My truck is a 2013 and I wouldn't even dream of selling it to buy something new. It's just now getting into its prime usage!
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Tue Jun 18, 2019 1:26 am

trpmb6 wrote:
a 2013 car is still "new" imo. My truck is a 2013 and I wouldn't even dream of selling it to buy something new. It's just now getting into its prime usage!

That 2013 car was the car I needed to get at the time, not the one I wanted. I don't care for all the gizmos and gadgets that many of them are coming out with, but I could stand to have cruise control, push to start, and (begrudgingly) back up camera (I tend to back into parking spaces to having the rear view camera helps).
"You haven't seen a tree until you've seen its shadow from the sky."
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Tue Jun 18, 2019 1:33 am

Dieuwer wrote:
How about using this calculator: https://www.nytimes.com/interactive/201 ... lator.html

If I was in the market to rent or buy a home in Seattle, I would probably wait a little longer. According to the St. Louis FED, the housing market in Seattle is cooling right now. I would give it another year or two and then consider buying.

I've used the calculator. All the numbers, as realistically as possible, still point to buying. The only way renting makes any sense is if I plan to stay less than 3 years in the area (which, at the moment, is not the case). From rent of $3000, it drops down to rent of about $1250 by year 3. Unless I am willing to rent in a dump (which even then may exceed $1250), it makes sense to buy. Heck, even with negative growth, the price is roughly the same as a mortgage for the area ($2100).
Last edited by einsteinboricua on Tue Jun 18, 2019 1:54 am, edited 1 time in total.
"You haven't seen a tree until you've seen its shadow from the sky."
 
User avatar
TheFlyingDisk
Posts: 1773
Joined: Mon Jun 09, 2008 12:43 pm

Re: Buy house or car?

Tue Jun 18, 2019 1:36 am

einsteinboricua wrote:
trpmb6 wrote:
a 2013 car is still "new" imo. My truck is a 2013 and I wouldn't even dream of selling it to buy something new. It's just now getting into its prime usage!

That 2013 car was the car I needed to get at the time, not the one I wanted. I don't care for all the gizmos and gadgets that many of them are coming out with, but I could stand to have cruise control, push to start, and (begrudgingly) back up camera (I tend to back into parking spaces to having the rear view camera helps).


But do you really need cruise control & push to start though? I take a somewhat similar distance commute as you and I rarely use cruise control on the highway.

The only thing I think you need is the back up camera - and an aftermarket setup would do you just fine.
I FLY KLM+ALASKA+QATAR+MALAYSIA+AIRASIA+MALINDO
 
luckyone
Posts: 2773
Joined: Thu Aug 21, 2008 1:50 pm

Re: Buy house or car?

Tue Jun 18, 2019 1:47 am

einsteinboricua wrote:
Dieuwer wrote:
How about using this calculator: https://www.nytimes.com/interactive/201 ... lator.html

If I was in the market to rent or buy a home in Seattle, I would probably wait a little longer. According to the St. Louis FED, the housing market in Seattle is cooling right now. I would give it another year or two and then consider buying.

I've used the calculator. All the numbers, as realistically as possible, still point to buying. The only way renting makes any sense is if I plan to stay less than 3 years in the area (which, at the moment, is not the case). From rent of $3000, it drops down to rent of about $1250 by year 3. Unless I am willing to rent in a dump (which even then may exceed $900), it makes sense to buy. Heck, even with negative growth, the price is roughly the same as a mortgage for the area ($2100).

I had a chuckle with the equivalent rent...such a rent *might* get you a one bedroom in the area of Seattle we bought, assuming you don’t have a car to park. For a couple planning for children, buying favors hands down.
 
Fars
Posts: 9
Joined: Tue Jun 18, 2019 1:45 am

Re: Buy house or car?

Tue Jun 18, 2019 2:01 am

If i were you,i'd like to buy a house,the house can appreciate.
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Tue Jun 18, 2019 2:12 am

luckyone wrote:
I had a chuckle with the equivalent rent...such a rent *might* get you a one bedroom in the area of Seattle we bought, assuming you don’t have a car to park. For a couple planning for children, buying favors hands down.

I was under the impression that only Seattle city proper and surrounding neighborhoods (Bellevue, Kirkland, West Seattle, etc.) had horrible parking situation. I didn't expect it to spill over to areas like Renton and Kent. I only recently got an assigned spot and I think leaving a negative review might have influenced that because out of nowhere, on a wait list, I was suddenly given a spot. But that's still an issue since it means I can never have someone over unless there's a weird shuffle (I take an unassigned spot and they take mine).

Apparently there's a regulation in King County overall about parking: a property can get away with as little as one parking space for every 5 dwelling units provided they are close enough to public transportation. The idea is that fewer parking spots reduces costs and thus, lower rent. They're encouraging folks to move away from cars, but even though there's good public transportation, it's still impractical to be car free.

In my property's case, it is apparently at 2 spots for every 5 units. There's garage parking at $125/month, with a couple of tandem spots going for more than that. I have an outside spot for $30/month, which I gladly pay for peace of mind. Of the remaining spots: 4 are for the leasing office which is open M-Sat, 2 are for a hair salon (open Tue-Sat), and the rest are for a business center not affiliated with the community (can only park there from 5pm to 6am on weekdays and all day weekends). There are some city of Renton spots but even then, there are signs being posted by the city warning that they're not meant for residents.
"You haven't seen a tree until you've seen its shadow from the sky."
 
luckyone
Posts: 2773
Joined: Thu Aug 21, 2008 1:50 pm

Re: Buy house or car?

Tue Jun 18, 2019 2:19 am

einsteinboricua wrote:
luckyone wrote:
I had a chuckle with the equivalent rent...such a rent *might* get you a one bedroom in the area of Seattle we bought, assuming you don’t have a car to park. For a couple planning for children, buying favors hands down.

I was under the impression that only Seattle city proper and surrounding neighborhoods (Bellevue, Kirkland, West Seattle, etc.) had horrible parking situation. I didn't expect it to spill over to areas like Renton and Kent. I only recently got an assigned spot and I think leaving a negative review might have influenced that because out of nowhere, on a wait list, I was suddenly given a spot. But that's still an issue since it means I can never have someone over unless there's a weird shuffle (I take an unassigned spot and they take mine).

Apparently there's a regulation in King County overall about parking: a property can get away with as little as one parking space for every 5 dwelling units provided they are close enough to public transportation. The idea is that fewer parking spots reduces costs and thus, lower rent. They're encouraging folks to move away from cars, but even though there's good public transportation, it's still impractical to be car free.

In my property's case, it is apparently at 2 spots for every 5 units. There's garage parking at $125/month, with a couple of tandem spots going for more than that. I have an outside spot for $30/month, which I gladly pay for peace of mind. Of the remaining spots: 4 are for the leasing office which is open M-Sat, 2 are for a hair salon (open Tue-Sat), and the rest are for a business center not affiliated with the community (can only park there from 5pm to 6am on weekdays and all day weekends). There are some city of Renton spots but even then, there are signs being posted by the city warning that they're not meant for residents.

I found it pretty similar to Chicago. In the downtown core you’re going to pay no matter what. In the neighborhoods the business streets can get clogged. But if you’re willing to walk a block you can find ample free parking on the side streets. I parked on the street in Chicago for three years (even during winter), and thus my frame of reference may be different. Ive found that people who are accustomed to city environs adapt, and the loudest complainers are usually people who are accustomed to suburban strip malls.
 
User avatar
einsteinboricua
Topic Author
Posts: 7384
Joined: Thu Apr 15, 2010 4:11 pm

Re: Buy house or car?

Tue Jun 18, 2019 2:45 am

luckyone wrote:
I found it pretty similar to Chicago. In the downtown core you’re going to pay no matter what. In the neighborhoods the business streets can get clogged. But if you’re willing to walk a block you can find ample free parking on the side streets. I parked on the street in Chicago for three years (even during winter), and thus my frame of reference may be different. Ive found that people who are accustomed to city environs adapt, and the loudest complainers are usually people who are accustomed to suburban strip malls.

Over here, it's quite a walk before you find free parking. I (jokingly) considered changing my profession and become a towtruck driver due to all the signs I see about towing.

(Separate discussion: what is a towtruck driver called? Can they be called towers [toe-ers]?)
"You haven't seen a tree until you've seen its shadow from the sky."
 
Ken777
Posts: 9863
Joined: Thu Mar 11, 2004 5:39 am

Re: Buy house or car?

Tue Jun 18, 2019 3:06 am

mham001 wrote:
Ken777 wrote:
One trick for home buyers - get an amortization schedule on your loan and pay two full months at once by adding the last unpaid principle amount on the list to your payment. On my first house that was adding $16 to the monthly payment.


Isn't that a constantly moving target?


It was a moving target and that is the reason for starting early. Your first payment includes Pymt 1 that has the lowest principle. Add Principle for payment #2 and that is the second lowers amount for the live of the loan. Each double payment in the early years will always be the cheapest. Each double payment also shortens the length by a month. A good spread sheet allow you to enter the additional principle paid and will display the amount of money saved for that payment as well as your new payoff date.

My rule for buying a house is to:

1. Buy one to sell it . In other words, attractive to buyers for that size house.

2. Buy one to live in it. Why pay for a house and then rent an apartment, or trailer home?

3. Prepare for putting work into the property. Painting, repairing/replacing appliances and yard work. Mowing, gardens, etc to to boost appearance.
 
User avatar
Aesma
Posts: 11640
Joined: Sat Nov 14, 2009 6:14 am

Re: Buy house or car?

Tue Jun 18, 2019 6:38 am

einsteinboricua wrote:
trpmb6 wrote:
a 2013 car is still "new" imo. My truck is a 2013 and I wouldn't even dream of selling it to buy something new. It's just now getting into its prime usage!

That 2013 car was the car I needed to get at the time, not the one I wanted. I don't care for all the gizmos and gadgets that many of them are coming out with, but I could stand to have cruise control, push to start, and (begrudgingly) back up camera (I tend to back into parking spaces to having the rear view camera helps).


I find it surprising that a 2013 car doesn't have cruise control. I won't argue with you on that one, because it's definitely one of my main reason to change cars. My commute car has cruise control (company car) but my personal car doesn't, and it's really annoying, as there are dozens of speed cameras all around me, wherever I go.

Keep the advice about new cars though, look at getting a used one that has what you need.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
User avatar
trpmb6
Posts: 2611
Joined: Thu Apr 19, 2018 5:45 pm

Re: Buy house or car?

Tue Jun 18, 2019 12:38 pm

I remember the parking situation being a nightmare up there. Fortuantely, where I was stationed at the time was in Mukilteo and we had excellent parking available to us. That was a blessing we didn't even realize until we were there for several months.

Who is online

Users browsing this forum: scbriml, seb146 and 51 guests

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos