1) Were we prepared to settle down in one area for at least 4 years?
2) Were we financially prepared to buy a home?
3) How much to spend?
4) How much work are we willing to do to the house?
5) What area do we want to be in?
I’ll talk about the first questions today, and the other questions will follow. I don’t claim to know everything, or even nearly enough, but these questions were what was important to us when looking for a house!Are we prepared to settle down in one area for at least 4 years? First, why 4 years? Basic rule of thumb in real estate is that you will not get your money back out of a house unless you live there for AT LEAST 4 years before selling. This could be more or less depending on what region the house is in, but in our area I felt like 4 years was a fine estimate.
But do you have to sell the house to move? No, no you don’t. We have the option to rent out the house, make some income off it, and move if we choose to. However, if we wanted to sell it and be done with it, we need to hold on to it for 4 years.
We both work in the area that we eventually bought in and we like the neighborhood, but it is important to considers school districts, taxes, crime, and access to roads, parks, and shopping when choosing a location. The better the school district, the higher the taxes (generally) but the easier the home will be to sell. The more access, and the less crime, the easier it will be to sell as well, and the value will appreciate more quickly. We considered all of these things, except we were not planning on having a baby, so we disregarded school districts. Now, the school district we ended up with is a middle-of-the-road school, but we are slightly nervous about it because crime moved closer to our neighborhood when the recession hit. I believe (hope) that everything will improve over the next 4-5 years.
Regardless of whether the school district improves, we do not want our child in school in the city. But, she won’t be going to school until she is 5, so we’re covered there :-)
Bottom line, we want to give ourselves enough time in the house to either sell it and get our money (or more) back out of it, or live in it long enough to get it ready to rent…..4 years minimum. Obviously, we decided we were ready!
OTHER POSTS IN THIS SERIES:
We Bought a House (at 22!)
We Bought a House (at 22)! – Part 2
We Bought a House (at 22)! – Part 3
We Bought a House (at 22)! – Part 4
We Bought a House (at 22)! – Part 5
halie walter says
Love this! My husband and I just bought our first home last month! I am 21 and he is 23. We have two children and I am a stay at home mom. We didn’t put 20% down only 15% but once we hit the 20% mark I am calling to have the pmi removed. We cloth diaper and I breastfeed our infant. My mother lives 3 blocks away and I do our laundry there. We also borrow my dad’s lawn mower but plan to buy our own in the fall when they are on sale. I cook everything from scratch.