HOA Fees and Maintenance Costs Erode 2021 Home Buys

Houses should be for living, not soliciting

“Houses cost money to keep up. Common number is 3% of the structure value. I done know how much the land is of your property value, but assuming $400/sqft build cost for a "luxury" house and 6500 sqft, I would guess the house is the vast majority of that cost, say $3m. 3% of $3m per year is going to be some $90k per year in upkeep not including maintaining the 6 acres, decorating the extra 2500 sqft etc. If it is a newbuild, the numbers would be less, but houses need paint, roofs, furna”

“I'm in a pickle as me and the hubby were planning to move out of country later this year. We put our house on the market its a 4 bed 3000sf quarter acre property with large lot. We paid 730 for it a few years ago and spent 100k on remodeling, everyone says it's beautiful that has viewed it and given feedback. The price is now dropped to 799k and it's still sitting. We already will be losing a bunch of money selling for this price so no way we can drop even more. Looked into renting i”

“worth separating two questions, do you want more leverage, and do you want more property to manage. youre in a great spot fully paid off, and taking a mortgage to buy more is fine if you actually want to be a landlord at bigger scale, but it does trade your current safety for growth. if what you want is more real estate exposure without more tenants and toilets, there are lower-touch options. tax lien certificates are one, property secured, no management, and you can do it with cash in states yo”

“what do the numbers look like”

“A lot of people flamed out dreams are being sold for pennies on a dollar. Why waste money? Figure out a little bit more about what you want and go from there. Let your dreams fit around what you can do and not what you can do fit for your dream. Wish you luck”

“So, I know variations of this question have been asked before, but trying to figure out the right move for my specific situation. I have been searching for a large property for years. As of a couple days ago, I’m finally under contract on a 140 acre farm, for 2.8M, with plans to build a large home/barns/garage/pond/workshop. There is also a 1 acre parcel and large home on the farm I’m still negotiating on, and expect to land in the 1.1m range. MY ideal plan is for my parents to move into this, b”

wrong sub. this is like pocket change.

No, the house is worth way more than what I can rent it for.

“Renting it won't put much of a dent on my mortgage. House worth more than what I can get out of renting.”

I’d talk to a realtor

“All aspects of this arrangement are either spelled out in a contract or it's a no. I wouldn't do it even then.”

“My wife and I go back and forth between staying in our starter home or upgrading to our forever "family home". It seems ritual for American families to level up to the larger 3-4k sq ft home once they have kids and are in their 30's or 40's. I'm almost 36 and my wife is 34 and I think we earn well for our medium cost of living medium size city in the Midwest (very mid). We understand the financial benefits of staying in our current home but also feel the pull emotionally fo”

“A family member has come to ask the rest of the family advice on path forward and I really don’t know what to tell them is the best option, maybe I’m not thinking of some factors that you all would. Let me break down the situation. They have a house worth maybe $800k They owe (amounts and % are estimates of what I remember them saying) Mortgage 475k @ 3% Heloc 150k @ 8.5% Car $30k @ 5.xx% Personal loan 57k @ 7.49% Credit cards 60k half 0% for a year and then like 15% for other half Here are the”

“I’m over estimating a but on the PITI maybe by one or two hundred. What do you think of this shakeout. Building a new home. Edit it- we drive 3yo cars bought basically new- I have a ton in buffer so we can put it onto mortgage. Below is take home after taxes, 401k (about 13% per person), and health insurance. PITI (mortgage): $4,000 Extra principal payment: $231 Emergency fund (top-off): $350 Home maintenance/updates fund: $400 Car replacement fund: $150 Groceries: $700 Gas (vehicle): $325 Auto”

“I'm sorry, i know this has probably been brought up a lot on here, but I need advice. We will be building a home shortly and plan on putting in sweat equity into the floor to lower the cost. Our contractor is a really nice and down to earth guy with integrity and he would never in a million years want to screw us over. He recommended Aquaguard to cut costs at least at first and then when we can afford it, we can go in and put in better floors. So as some background: We do have 2 cats and 2 k”

“Unless you have a need to sell, why sell? You’re sitting on a cash cow. My thoughts would be, remodel the 3rd unit and raise the rent. Now consider selling either on a 1031 exchange OR, sell on an owner finance WRAP around mortgage. Prepare it for sale but be sure it’s ready for an appraisal. Spotless, curb appeal, the units and cleaned and ready to have it appraised for max value. Your current 2.25% Int rate is a huge benefit to you if you sold it at 9%. Run it through an Amt Schedule and see f”

“Hey all. We are looking to buy a house to upgrade from out existing home and want to get some thoughts from the wise heads here. When we started to look at houses, we wanted to keep our purchase below $900k. But, after looking at a few houses and doing more research, the house we would want that will check all our boxes (great school district, decent commute, close to kid’s activities) would probably be around $1M. Do you all think we are financially viable and stable enough to buy a house in th”

“Hey all. We are looking to buy a house to upgrade from out existing home and want to get some thoughts from the wise heads here. When we started to look at houses, we wanted to keep our purchase below $900k. But, after looking at a few houses and doing more research, the house we would want that will check all our boxes (great school district, decent commute, close to kid’s activities) would probably be around $1M. Do you all think we are financially viable and stable enough to buy a house in th”

“Question since I can’t post here - I’m an only parent and My house is for sale for $410,000 and is under contract but we don’t have a final commitment from the buyer still in legal review back-and-forth back-and-forth That being said that in the last eight months 4 to 6 homes have sold for $560,000 within a block of me. I have been alone so couldn’t do anything to update it when I struggled from cancer years ago or income decline. If I paid past due mortgage and paid off HELOC and fixed up in ne”

“My wife and i are tired of the struggle, we are only in our upper 20s and we have been talking about this for that last year or two. We right now are saving for the land but it feels so far off. We rent and sublet to save as much money as we can but are still years away, i want to get land before i grow to old or damaged from work to build a homestead. Does anyone have any recommendations saving or raising money so we can buy land ASAP? submitted by /u/Clear_Pepper_1708 [link]”

“ymmv but the more I plan, the more I see owning houses as a bad thing it ties you down to an area and makes moving much harder, so I can't easily switch cities or countries, that's a huge red flag even disregarding finances”

“Right. The move for Canadians is to stack that cash while working in tech in the US, move back home, buy a house, then you don’t have to worry too much about ongoing costs.”

“we are the second owners of our small but lovely home. I remember the previous owner crying during the closing ten years ago, this was the house she raised her kids in. now I’m in the same situation, this time as the seller. i cry every night thinking about leaving, but my husbands job is being relocated and my son got into a great magnet program in a different district. I was thinking to reach out to the previous owner (we stayed in periodic light contact in the beginning to pass on mail, packa”

“Hi everyone! I searched the group for info about Ryan homes and I didn't find anything good lol but i didn't find anything recent either. So my question is...have they improved? We are buying one of their condos through affordable housing (they just broke ground last week, estimated to be finished in November) and everything I'm reading about them is freaking me out lol BUT I can't find anything recent. I'm guessing we should have an inspector come to either the 2nd or 3rd me”

“Yes I think the look back period can be as long as 7 years in some states. 3-5 years is very common.”

“The part that gets missed is the volume. Existing home sales are running at 4.09 million annualized, the same pace as the 2008 collapse, while median prices just hit a record $440,600. Crisis-level transactions, all-time-high price, same report. That record price is held up by almost nobody selling, not by real demand.”

“Your gut is right: sell the new build. The logic that matters isn't age of the asset, it's risk concentration. The SFH is one tenant, one income stream, in a location that caps your appreciation forever (nicest house on a rough block never comps up - you built value the neighborhood can't support), with a tenant pool limited to Section 8 and turnover costs scaled to 1,800 sq ft. The duplex is two income streams, major systems you've already renewed, and the tenant profile you act”

“Option 1, and it's not close. Renting a house you already control at $3,100-3,800 against an $1,800 PITI at 3% is a better deal than anything you can go buy at 7% - you'd need to find a unicorn to match the spread you already own. The 1% rule you mentioned struggling to find locally? Your own house clears it. The real cost of Option 1 is the new primary at 7% on $600-700k, so keep that purchase as modest as your family tolerates. Every $100k less is ~$660/mo you're not paying. On Opt”

“Yeah this isn’t really a real estate investing question at that point. You have money you explicitly don’t want to invest in real estate. If you want advice, I recommend you try personal finance or general investing forums.”

“Hi all, I have some concerns about a new construction that just went up for sale in my neighborhood. This is the front of the new house. this is the original house. Basically it went from a 1200 sq ft cape to a 4200 sq foot colonial. My concern is with how it was permitted (see permits for demo and build here) . I don't see any rough framing inspection, nor rough insulation inspection, and no certificate of occupancy. It's been on the market for 34 days and likely has potential buyers wa”

“Are the rental houses or townhomes/condos? Because if they are the latter, HOA fees and special assessments can be crazy, I had a $700 special assessment last year on a townhome rental (plus HOA dues increasing like 10% that year, about 40% increase since I bought in 2022), my uncle had a condo rental in Hawaii which was leasehold, and the land lease was up and the land owners wanted $400k per unit or else they’d take possession of the building (so you saw some units for only like $100k or less,”

“I would not buy in an unfamiliar city based only on expected appreciation. Study job and population growth, rents, vacancies, taxes, insurance, major employers, and neighborhood conditions. Visit the area, speak with local professionals, and start with one property. The deal should provide solid cash flow today, with appreciation treated as a bonus.”

“You'd be permanently selling part of your home at what is probably an unfavorable valuation to deal with a temporary cash flow issue. You'd probably be better off selling the home outright. You'd be much better off shopping around for home equity loans.”

That real estate generating any cash?

“Houses are terrible investments imo. They only make sense if you're trying to keep up with the joneses and you want to flex on your friends that you're a homeowner. Otherwise the money should be in equities.”

“I think your reasoning makes a lot of sense. A newer property isn’t automatically the better asset if the location creates more operational headaches. A lot of experienced investors end up realizing that the best property is the one that is easiest to manage and produces reliable returns, not necessarily the newest one. The duplex also gives you some diversification since one vacancy doesn’t completely wipe out your income. I’d probably look closely at the long-term maintenance outlook, insuranc”

“The gap that made this a real story was 2.75% vs 7%, that's genuine money to walk away from every month. But the composition has shifted a lot. The share of mortgage holders under 3% is now roughly even with the share over 6%, and some trackers say by early this year more homeowners are above 6% than below 3%. One brokerage's own numbers had about a third of this spring's listings coming from sellers giving up sub 5% rates. At some point staying put just isn't the dramatic financ”

“I guess I'm not. Because the immediate $75k for $30k and the locking a mortgage payment instead of raising rents makes it hard to spot the tricky part of the question. In many places rents are up 30%+ since Covid, I'm still paying the same mortgage payment as 12 years ago. That's how dumb I am.”

“yep that’s probably the cleanest way to frame it. the duplex still earns its place in the portfolio but the single-family sounds like it keeps asking for more attention than the upside justifies.”

“Hi! I’m planning on listing my home for sale in the next few weeks. I also plan on moving out of state and renting for the next year or two. What is the best and smartest thing to do with the funds from the sale of my home? Something short term since I want to be able to access them, potentially in a year if I decide to buy a new home next year. Thanks so much! submitted by /u/Sneezy_weezel [link] [comments]”

“So this might get some flack here, but here's the short story: I own a home. I bought it in 2020 so I have an insanely good interest rate and don't want to lose that. I don't like where I live (it's not dangerous or anything, it's just boring). I live in south NJ. I want to move to north NJ closer to NYC. I can't afford to buy/own two homes, so my idea would be to rent either a home or apartment up there. Because it's such an expensive area, I feel like it would be a”

Sell it.

“Sounds like it $2k month each unit which if 2 bedrooms that is pretty low for many major cities . Now one bedrooms it would be high but not far off.”

“Do you see your taxes in your area going up? Will the numbers still work for someone to rent it at the selling price now? What about when it goes up higher? Best to sell when there is still skin in the game rather than pricing out then not being able to sell because numbers don’t work. Also look at how much area is appreciated it year does the trend seem to be continuing? Would someone be ok buying for just appreciation and rents not fully covering each month? Could you 1031 into something bigge”

Don’t invest in real estate going forward. I’ll just leave it at that.

“I have posted here about this before but wanted to run the scenario again. I realized a couple of changes I could have made in the original scenario. I had a townhome that I'd had a weird history with somewhat hostile neighbors before but had been living there peacefully for quite a while. I met a realtor that insisted she could get me a really good deal and I took it. Similar homes in my neighborhood are listing at wildly different prices for fixed up versions, which would put mine at below”

“my wife, toddler and myself recently moved out of our home that we owned for about five years now since the end of COVID. We moved to an area much closer to family and are renting out a home as the area is significantly more expensive than where our house is and it was the quickest path to get into before growing our family further. the idea was originally that we would rent out our current home and then eventually purchase in the new area after building up some money, ultimately having to sell”

“not naive imo,,, it’s just a different risk bucket. fewer residential headaches sounds like the appeal but with NNN the tenant/lease quality starts carrying a lot more weight. is the main goal buying back time?”

“I definitely have a lot more in-depth research to do, along with actually sitting down with multiple specialized professional ahead of me. Small goals for now, sell the single family, then reset and begin the long slog lol”

“TLDR: Is moving out of my 2bed/2bath rental $1975 worth moving to an apartment $1200-1500~ (base rent only) to save money and losing the luxury of a backyard? Is it worth moving from a house to an apartment saving $400-600 a month? I currently pay $1975 for a 2bed/2bath (rent 1185, the rest is amenity and car port) for a house in a rental community. I am lazy and I like where I stay currently because of the backyard for my dog. He can come and go as he pleases during the day and he’s used to it”

“It comes down to whether you define success as a full BRRR or a partial BRRR. If you recover 70% to 90% of your invested capital while keeping a solid property, that may still be a successful deal. Interest rates are also a major factor. A partial BRRR now, followed by another refinance if rates improve, could be a reasonable strategy. I would also look at markets that haven’t appreciated as sharply and may still offer better rent-to-price ratios. Some investors mention Pittsburgh, but definitel”

“The math side of this is more lopsided than you're treating it. $200k on $12M is a 1.67% withdrawal rate. Even if you add a house and pad the burn to $300k, you're at 2.5% — a rate that has survived every retirement start date in recorded market history, including 1929 and 1966. Going from $12M to $20M does not move your failure risk from low to zero. It moves it from zero to zero. So the extra $8M buys you no safety at all — it only buys lifestyle upgrades you haven't actually named”

“Before you jump into NNN, it's worth pressure-testing the numbers on paper first rather than starting with the property search. Build a simple model for a hypothetical deal, purchase price, your expected LTV, actual amortizing debt service at today's commercial rates (not residential rates, they're a different animal), and a realistic vacancy assumption of 12-18 months if the tenant leaves, since that's the real risk with NNN, not day-to-day management. Also worth talking to a co”

“I'd probably ask myself one question: if you didn't have the primary residence tax exemption, would selling even be on the table? If the answer is no, then I'd be careful not to let the tax tail wag the investment dog. A great property at 2.25% is hard to replace. On the other hand, if you'd sell it regardless, then the exemption is just a nice bonus.”

“You said you’re still figuring out whether the income scales that’s the real question and it’s separate from the appreciation math. Trading into a bigger asset scales your appreciation exposure but that’s still paper equity on a leveraged asset. It doesn’t automatically fix a low yield portfolio. A larger stabilized property at a low cap can be the same problem just bigger and with new debt service on top. Income only scales if there’s NOI you can actually move under market rents, mismanagement,”

“Financially its just a math problem. https://www.calculator.net/rent-vs-buy-calculator.html Renting is more flexible than owning. Rent includes maintenance. And one thing no one seriously considers for whatever reason is that single family homes are more energy intensive than housing that shares walls. That means higher utilities. My house is a masonry home from the 60s and my last apartment was built in the 80s. I went from 60 dollars a month all energy in my 600 sq ft apartment to 300 dollars”

“It depends on u. Are u getting married soon, stable job, want kids soon? Maybe a house is for u. Me. I wasn’t stable. I was footloose, floating between jobs & travel overseas. Wanted to marry later (got married at 38 & kid at 43). I rented places near my work. Travelled the world between jobs. Then started stable work at 34. Rent was cheaper than a mortgage payment. Saved up money. Invested the difference. Got married & when the boy was 6 I bought a house (paid 80% downpayment from m”

“Looking for outside perspective on a decision I've been going back and forth on. Quick background: Built this house myself, originally planned to live in it, but outgrew it after having a kid. It's basically a high-spec new build at this point. Coastal CA 2/1 bungalow, conservatively worth $800K. $175K left on the mortgage, locked at 3.7% fixed, 20 years remaining. Renting it furnished to travel nurses for the past 2 years. Current tenants (great ones) move out in December. Nets about $1”