How long should I rent for?

At this point in my life it seems like a daunting task to be able to afford a home. Houses are so expensive here in California, and especially in the areas near the beach. There are multiple houses in the beach area where you could pay $500,000 for a 500 square foot home. In many other states that price would buy you a mansion. In order for us to be able to afford a house in this area, we would have to move inland away from the beach, and away from the areas we love. Should we forget our dreams of owning a house in this San Diego area or should we do everything we can to try to find an affordable house in an area we love?

I asked my wife this week how long she wants to rent for, and we both said that we would like to rent for another 5 years or so. Are we missing out on opportunities to buy right now? Should we be looking for a foreclosure that we could buy and renovate? At this young age there are so many unknowns, and there is so much to think about. I want to take advantage of opportunities when they are available, but the truth is, I don't know what opportunities are out there. What does everyone else do when they decide to buy their first house, do you just ask your parents for home buying wisdom?At the age of 25, I do feel that owning a house right now would be too much of a financial burden on our family. We need to get out of debt prior to purchasing a house, and we need to save up for a down payment on our first house.

The cost of buying a home is so much more than making a monthly mortgage payment. You have to worry about insurance, property taxes, and all the money you are going to put into your home. Currently we pay just under 30% of our income on renting, and there are no additional costs on top of that. Renting insurance is dirt cheap, and then all other costs are regular bills. The only problem is our monthly payment goes to pay for our landlords mortgage, and it is not building wealth for our family. While we are renting, we have a great opportunity to pay off debt, and build up savings for future purchases.

I ask you for advice here, At what point will I know that it is time to buy a home? Is there ever a point when you are ready to buy a house? Or does it all depend on the interest rate you receive and the loan you qualify for? I guess I have a lot to learn about the real estate business. My father in law is a Realtor and this topic is a conversation that I need to have with him in the near future. All you home owners out there, when did you know you could afford a house? Is there a certain mark financially that makes you ready to own a home? What mistakes with home buying have you learned from in your past? I look forward to learning from you all.

Posted in Financial Services Post Date 09/17/2020