A Wedding, a wife, a house oh my!!!

[mredskins]

Really it all boils down to risk and how much of it you are comfortable with.

Money, religion and politics are all things folks have huge varying opinions on so what you need to do is ask yourself how much are you willing to risk to in order to fill your needs.

I know folks that live in a two bedroom rancher but have the money to upgrade to something larger but are afraid of the risk involved, to me that is not living.

Then I know plenty more folks that live in houses they can't afford and they can't do anything because they are house poor, to me that is not living also.

So you just basically need to find your comfort level in the risk you are willing to take. No one here can make that decision for you.

[Schneed10]

Pay off debt first. If the interest is not tax deductible, then you want it gone before you buy a house. So unless it's a student loan, pay off the debt.

Then save up an emergency fund. Sock away enough to cover 6 months of your basic expenses: rent, food, utilities.

Then save up to buy a house, never dipping into the emergency fund. I don't think you need 20% down, that's impractical for a lot of people. The long term appreciation on the price of the home will outpace the cost of personal mortgage insurance.

Just keep your monthly mortgage payment (including taxes & insurance) less than 33% of your net monthly income. Any more than 33% and you'll start to feel the pinch.

[Ruhskins]

Originally Posted by Schneed10

Pay off debt first. If the interest is not tax deductible, then you want it gone before you buy a house. So unless it's a student loan, pay off the debt.

Then save up an emergency fund. Sock away enough to cover 6 months of your basic expenses: rent, food, utilities.

Then save up to buy a house, never dipping into the emergency fund. I don't think you need 20% down, that's impractical for a lot of people. The long term appreciation on the price of the home will outpace the cost of personal mortgage insurance.

Just keep your monthly mortgage payment (including taxes & insurance) less than 33% of your net monthly income. Any more than 33% and you'll start to feel the pinch.

To add to that, make sure that you still have room to save some money after you make your mortgage payments. With having a house, you never know when something is going to happen that will require you to put up some money to fix it.

[SirClintonPortis]

All this talk about renting out a house or not seems overlook whether WaldSkins and his wife wants to be a landlord and/or landlady and deal with tenants, and there are plenty of tenants who are "pesky". Well, there are property management companies, but there are potential principal/agent issues with them too.

[Schneed10]

Originally Posted by SirClintonPortis

All this talk about renting out a house or not seems overlook whether WaldSkins and his wife wants to be a landlord and/or landlady and deal with tenants, and there are plenty of tenants who are "pesky". Well, there are property management companies, but there are potential principal/agent issues with them too.

Dingus. The choice is whether he should buy a house or continue renting. Not whether he should rent out a house he owns.

Reading is fundamental.

[mredskins]

Originally Posted by Schneed10

Dingus. The choice is whether he should buy a house or continue renting. Not whether he should rent out a house he owns.

Reading is fundamental.

I think he got confused becasue the number of side bars going on. Which I caused most of them, sorry.

As far as answering the OP's question S10 has some great advice and a couple of others. Though I am very comfortable with my finances I took a lot of risk holding on to properties and what not early on when I was first starting out. I would not recommend it to everyone.

With that said I can't emphasized enough you have to decide what a comfortable risk level is for you when planing your finances. I build cost models everyday for my customer and everyone of my models has different levels of risk and confidence in them. All the models are then presented to the decision maker and they decide what level of risk they are comfortable with. You can easily do the same with your personal finances.

[skinsguy]

Originally Posted by mredskins

I think he got confused becasue the number of side bars going on. Which I caused most of them, sorry.

As far as answering the OP's question S10 has some great advice and a couple of others. Though I am very comfortable with my finances I took a lot of risk holding on to properties and what not early on when I was first starting out. I would not recommend it to everyone.

With that said I can't emphasized enough you have to decide what a comfortable risk level is for you when planing your finances. I build cost models everyday for my customer and everyone of my models has different levels of risk and confidence in them. All the models are then presented to the decision maker and they decide what level of risk they are comfortable with. You can easily do the same with your personal finances.

I feel more comfortable knowing that you admit what you're doing is not going to work for everyone. Sorry if my tone seems harsh, I am truly happy that it's working out for you, but it is a huge chance you're taking.

[Schneed10]

Skinsguy is right, that's a lot of risk, mredskins. Sounds like it has worked out well so far.

When you talk about risk in life - babies with down syndrome or likelihood of getting in a car wreck or likelihood of getting laid off - those are probabilities that are not easily quantifiable. However the risk that you'll lose a stream of rental income is very easily quantifiable.

Sounds like you're in good shape, but I'll say it anyway. You should make sure you always maintain an emergency fund that would cover 6 months of your own living expenses + 6 months of the cost of maintaining your rental properties + 6 months worth of whatever debt service payments you have on those rental properties.

If you lost your job and at the same time lost a tenant and still had to make mortgage payments on your rental properties, you'd be in real bad shape.

Sounds like you have some contingency plans. If I were you, I could sleep real well at night in your situation as long as I had 180 days cash on hand.

You were very very exposed to risk early on in this venture. Sounds like it worked out and paid off. But now you have taken steps, and maybe can take more steps, to minimize that exposure going forward.

[firstdown]

The great thing about buying a home now is that you can get the sellers to pay some if not all closing cost. Actually you should ask them to pay cost associated with closing because it covers more things. Some things like insurance ar not considered closing cost but are cost associated with closing.

[SBXVII]

Save your self and just don't get married.

[GMScud]

Pay no mind to SBXVII. He hijacked my wedding thread a while back.

Enjoy your marriage and best of luck with the housing situation.

[mredskins]

Originally Posted by GMScud

Pay no mind to SBXVII. He hijacked my wedding thread a while back.

Enjoy your marriage and best of luck with the housing situation.

OMG that is right LOL! I forgot about that.

[firstdown]

This thread has gone down hill

For the record get a house with a detached garage beause its harder for your wife to yell at you when your out in the man cave drink and watching football.

[los panda]

let me congratulate waldskins and back out of this one. best wishes to you and your family.

[mredskins]

I am not the only one that finds Dave R kind of a joke.

Is Dave Ramsey A “Financial Expert”