A first home buyer need advice. - please help...

[usctrojancpa]

I figure I spend more time inside my house rather than on my driveway!

IHO would cringe at your comment 

I did when I read it....EEEKKKK

 

[thelinux]

Everyone would prefer a newer and detached house, but when it comes down to finance, we have to choose between a newer attached home and an older detached house. In Irvine, the older house in this range must be around 30-40 years old. If you are handy and enjoy home improvement, you may get the older one. For me, it is just a lot easier to buy a new home in a new neighborhood, new schools and new parks. We enjoy the house the day we move in, one of my friends had to tangle plumbing issue in the first month they moved in. The driveway is nice, but I would prefer the newer floor plan, it is much nicer. I figure I spend more time inside my house rather than on my driveway!

Interesting. For some reason, I've been thinking that a driveway is important. (Maybe I wanted a space to wash my car?? Is it even allowed to wash your car on your driveway in Irvine anyway???) And your quote made me to re-think about it. Right, I am not going to spend that much time on my driveway but it will be convenient parking space for my guests though. Anyway, thank you for enlightening!!!

Also, I am not a good handy man. Maybe it's because I've never owned my own home so never had to work on house maintenance??? Maybe I have a potential to be a good handy man with some experience but that's one reason that I am afraid to buy an old home.

Anway how old is considered to be old? Before 80s?

 

[IndieDev]

A drive way is also a great place to setup a machine gun nest, a defensive point that shouldn't be ignored.

 

[thelinux]

Irvine not be the best city to make an investment in residential housing but if I had to pick I'd look at old Northwood, West Irvine, Woodbridge, and Oak Creek.  I think that Portola Springs might have the best chance of future appreciation as gets fully built out.  I would focus on looking at detached condos or homes.  If a property is maintained well and it checks out when you get a home inspection, I wouldn't be too concerned about how old it is.  As for timing, I think there are currently more downside pricing pressure than upside due to the headwinds that we are facing.  Can property values in Irvine fall by 5-15%?  It's possible...will it happen?  I have no idea.

So which city is the good place for investment?
Where can I find a detached, not too old, no MRs and low HOA homes at between 400K and 500K (or between 500K and 600K)?
Why do you think PS could show best appreciation?

Thanks.

 

[usctrojancpa]

Irvine not be the best city to make an investment in residential housing but if I had to pick I'd look at old Northwood, West Irvine, Woodbridge, and Oak Creek.  I think that Portola Springs might have the best chance of future appreciation as gets fully built out.  I would focus on looking at detached condos or homes.  If a property is maintained well and it checks out when you get a home inspection, I wouldn't be too concerned about how old it is.  As for timing, I think there are currently more downside pricing pressure than upside due to the headwinds that we are facing.  Can property values in Irvine fall by 5-15%?  It's possible...will it happen?  I have no idea.

So which city is the good place for investment?
Where can I find a detached, not too old, no MRs and low HOA homes at between 400K and 500K (or between 500K and 600K)?
Why do you think PS could show best appreciation?

Thanks.

Better options would be Costa Mesa, parts of Tustin, Aliso Viejo, RSM, Anaheim Hills, parts of Orange, Laguna Niguel, and Yorba Linda to name a few.  Those cities have home prices that are closer to rental parity than homes in Irvine.

 

[freedomcm]

....  It's like money down the drain every month ....
I'd rather sock away some of that $$$ .... with a lower single HOA ..... and put that into a house maintenance account.  When maintenance needs arise, you would tap into that fund. 

That is what is supposed to happen.

But have you looked at a sampling of HOA reserve funds lately?  Many are depleted due to non-paying occupants.



That's exactly what the HOA does, and they can get things done far cheaper due to volume.  A significant portion of your HOA fee goes into the reserve fund.

 

[irvinehomeowner]

I figure I spend more time inside my house rather than on my driveway!

IHO would cringe at your comment 

To each their own.

I like the driveway more because it gives the house separation from the street and provides extra parking space for guests.

But sometimes you have to give up to get (like a 3-car wide garage).

 

[IndieDev]

Irvine not be the best city to make an investment in residential housing but if I had to pick I'd look at old Northwood, West Irvine, Woodbridge, and Oak Creek.  I think that Portola Springs might have the best chance of future appreciation as gets fully built out.  I would focus on looking at detached condos or homes.  If a property is maintained well and it checks out when you get a home inspection, I wouldn't be too concerned about how old it is.  As for timing, I think there are currently more downside pricing pressure than upside due to the headwinds that we are facing.  Can property values in Irvine fall by 5-15%?  It's possible...will it happen?  I have no idea.

So which city is the good place for investment?
Where can I find a detached, not too old, no MRs and low HOA homes at between 400K and 500K (or between 500K and 600K)?
Why do you think PS could show best appreciation?

Thanks.

Better options would be Costa Mesa, parts of Tustin, Aliso Viejo, RSM, Anaheim Hills, parts of Orange, Laguna Niguel, and Yorba Linda to name a few.  Those cities have home prices that are closer to rental parity than homes in Irvine.

Aliso Viejo is getting extremely close to parity for pretty good homes. I still wouldn't go all in, if I were an investor, but I would keep an eye out in the next year or so.

 

[irvinehomeowner]

I am in agreement with Indie about Aliso. The prices have gone down there quite a bit in the last year or so.

Close to coastal cities, somewhat central, newer and lower MRs... it also has its own job centers although no 99 Ranch or 85?. But there is a Sonic nearby... heh.

 

[thelinux]

Aliso Viejo is getting extremely close to parity for pretty good homes. I still wouldn't go all in, if I were an investor, but I would keep an eye out in the next year or so.

What do you mean by "close to parity"? Sorry that I am so ignorant with this subject...

 

[IndieDev]

Aliso Viejo is getting extremely close to parity for pretty good homes. I still wouldn't go all in, if I were an investor, but I would keep an eye out in the next year or so.

What do you mean by "close to parity"? Sorry that I am so ignorant with this subject...

Rental parity.

Say I want to rent a 3 bedroom house in Aliso Viejo, and it cost me $2,200 a month. If I can purchase a home of equivalent location, dimensions and quality for the same monthly cost, you say that the monthly outlay of the home is at rental parity.

There are many complex heuristics out there that calculate monthly cost including appreciation, inflation, depreciation, tax implications, etc, but that's the basic idea.

Many investors, or even potential home buyers look at rental parity as an indicator of whether it's a good time to purchase a home because unlike "mortgage payments", market rental rates are primarily determined by three inputs; supply, demand, and the median salary in the area. You can't take out a stinky, festering, sub prime loan to rent an apartment. 

 

[akula1488]

Aliso Viejo is getting extremely close to parity for pretty good homes. I still wouldn't go all in, if I were an investor, but I would keep an eye out in the next year or so.

What do you mean by "close to parity"? Sorry that I am so ignorant with this subject...

Rental parity.

Say I want to rent a 3 bedroom house in Aliso Viejo, and it cost me $2,200 a month. If I can purchase a home of equivalent location, dimensions and quality for the same monthly cost, you say that the monthly outlay of the home is at rental parity.

There are many complex heuristics out there that calculate monthly cost including appreciation, inflation, depreciation, tax implications, etc, but that's the basic idea.

Many investors, or even potential home buyers look at rental parity as an indicator of whether it's a good time to purchase a home because unlike "mortgage payments", market rental rates are primarily determined by three inputs; supply, demand, and the median salary in the area. You can't take out a stinky, festering, sub prime loan to rent an apartment. 

Is it true renting should cost more than owning? otherwise being a landlord is not a very smart investment

 

[IndieDev]

Aliso Viejo is getting extremely close to parity for pretty good homes. I still wouldn't go all in, if I were an investor, but I would keep an eye out in the next year or so.

What do you mean by "close to parity"? Sorry that I am so ignorant with this subject...

Rental parity.

Say I want to rent a 3 bedroom house in Aliso Viejo, and it cost me $2,200 a month. If I can purchase a home of equivalent location, dimensions and quality for the same monthly cost, you say that the monthly outlay of the home is at rental parity.

There are many complex heuristics out there that calculate monthly cost including appreciation, inflation, depreciation, tax implications, etc, but that's the basic idea.

Many investors, or even potential home buyers look at rental parity as an indicator of whether it's a good time to purchase a home because unlike "mortgage payments", market rental rates are primarily determined by three inputs; supply, demand, and the median salary in the area. You can't take out a stinky, festering, sub prime loan to rent an apartment. 

Is it true renting should cost more than owning? otherwise being a landlord is not a very smart investment

Historically, holding a home has been nominally more expensive than renting, all things considered. Of course, that is balanced by the fact that there are certain attributes to home owning that don't necessarily have a dollar value.

It's not an exact science because of the latter, but rental parity is a good indicator of relative value.

As for being a landlord, I personally would never become one. I've never thought buying "rental properties" was ever a good investment.

 

[thelinux]

Rental parity.

Say I want to rent a 3 bedroom house in Aliso Viejo, and it cost me $2,200 a month. If I can purchase a home of equivalent location, dimensions and quality for the same monthly cost, you say that the monthly outlay of the home is at rental parity.

There are many complex heuristics out there that calculate monthly cost including appreciation, inflation, depreciation, tax implications, etc, but that's the basic idea.

Many investors, or even potential home buyers look at rental parity as an indicator of whether it's a good time to purchase a home because unlike "mortgage payments", market rental rates are primarily determined by three inputs; supply, demand, and the median salary in the area. You can't take out a stinky, festering, sub prime loan to rent an apartment. 

Thanks! That was a good thing to know indeed...

 

[NoSoup4U]

Rental parity.

Say I want to rent a 3 bedroom house in Aliso Viejo, and it cost me $2,200 a month. If I can purchase a home of equivalent location, dimensions and quality for the same monthly cost, you say that the monthly outlay of the home is at rental parity.

There are many complex heuristics out there that calculate monthly cost including appreciation, inflation, depreciation, tax implications, etc, but that's the basic idea.

Many investors, or even potential home buyers look at rental parity as an indicator of whether it's a good time to purchase a home because unlike "mortgage payments", market rental rates are primarily determined by three inputs; supply, demand, and the median salary in the area. You can't take out a stinky, festering, sub prime loan to rent an apartment. 

Is rental parity usually calculated assuming a 20% down payment?

 

[IndieDev]

Is rental parity usually calculated assuming a 20% down payment?

It can be calculated assuming any percentage of down payment. I've seen calculations using 3.5%, all the way to 50%.

All you have to do is determine the correct opportunity cost of not having that percentage of money available for other money making means (CDs, HY Checking, other money market), and you can calculate parity.