when buying a home what is better for a first time buyer? This is for someone in the NYC area.
By a bit smaller/cheaperhome, and be able to still go on vacation, or eat out
By a bit costly/bigger home, not be able to put 20% down, and kind of be living on a tight bugdet for a while.
The thing in in NYC usually you can purchase 1 home in your life time, so is it better to go big and be in a tight financial position, or get somthing that is definately affordable with room to spend money as well?
I have seen people buying bigger homes, but renting out a portion to offset the mortgage payment in their favor. I have also seen people living in smaller size. It all depends on what you can afford. If I were you, I would go with the house that would leave me with some cash flow.
You have to decide what is important to you. As a Realtor, I don’t like to see my clients be “house poor”…meaning they over extend themselves to go into a pricey house, but then are living month to month with no savings or cushion for the incidentals (rise in taxes, maintenance, etc) that WILL pop up.
For a first time home buyer, the average time a person stays in a "starter’’ home is 7-10 years, before they upgrade or move on.
My personal and professional opinion is not to over extend yourself financially to the point where you can’t even enjoy life outside of paying the mortgage every month.
I think the general rule is to not have a mortgage that exceeds 30% of your pay check. so if you can afford that then its all good. It also depends on what other expenses you have, debts and stuff.
what I’ve seen most first time home buyers do is that they buy a small condo, live in it for a bit, save a downpayment and buy a bigger house and rent out the condo.
I bought my first house in 2012, the idea was to invest mostly that’s why bought a 2 bed room condo in upper west side manhattan. It was costly but suited our life style as both me an my brother were single and working in down town manhattan. It was a perfect choice as the market price has already increased 30% plus we are getting tax rebates and we saved a ton of money on rent which we were earlier paying. We had figured out that Jersy city and brooklyn were far much expensive and higher taxes.
When I got married and moved out my other siblings moved to the city in the apartment as both go to college in the city and jersy so it has been working out perfect by far. Even if we don’t live there in far future due to getting married or to raise a family we can always rent it out and it’s going to easily give us 3-4 K in rent income.
My only worry is the increase in condo fee as some times the increase in exponential.
We eventually will sell it but not before it’s worth a million ( a girl can dream right?)
( a girl can dream right?)