Do I loose money selling my house after 5-10 years?

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My wife and I are planning on buying a home in the near future. Since we are only 22 years old and don’t have a whole lot of money saved up, but decent credit scores and pretty good jobs we are looking for houses in the range of $ 150,000. We have pretty good job perspectives of making more money in the future through advancements and so on. We are thinking about may be buying a house for 5-10 years and then sell it and get something bigger. Assuming the market stays steady, would we be able to come out even or with a gain selling the house within that time period or would we make a loss due to interest?

In case it matters, we are living in Tuscaloosa, Alabama and were told that the market has been pretty steady in the past.

  1. Reply
    November 20, 2011 at 9:46 am

    Are you debt free? Do you have 3-6 months of living expenses saved up? If not then a house buy is a bad move. save up, put a down payment and get more house for the buck and save yourself some heartache from sticker shock of a new home. Real estate has always been a steady investment and in 5-10 years, depending on location, you probably won’t lose money. Talk to a real estate agent in the area and ask him these questions. You want someone with experience, not someone who just took the exam…. Good luck to you!!!

  2. Reply
    November 20, 2011 at 10:04 am

    That’s basically how people enter the real estate market–buying a lower-cost house, then moving up after a few years. Most people sell after about five years.

    It depends on where you live, but real estate usually increases in value.

  3. Reply
    November 20, 2011 at 10:52 am

    The alternative is renting. At the end of the rental what have you except a file cabinet full of rent receipts and a smile on your land lords face. I’ll bet your land lord is like all other land lords and do you a favor each year by raising your rent.

    I have a saying I learned from an old timer long ago He said “Buy real estate and wait, don’t wait to buy real estate.”

    Speak with your mother and father. Ask them how much they paid for their home and how much it is worth now. There in lies the answer to your question.

    Your plan is an excellent one buying and selling in 5-10 years and moving on. I might even suggest that you purchase a 1-4 unit place that way you will have some renters assisting you in paying for your property. Purchasing a 1-4 units is like purchasing a single family home with the no down payments loans in some cases based on your credit score and considered owner occupied if you live there.

    There are tax advantages, depreciation in this case as well as appreciation and don’t forget the interest is tax deductable, as well as any fees and points you pay to get your loan. See your tax advisor for tax information.

    After 5 years you will be worth what the property is and would have a savings to move on as well as raises from your respective jobs.

    Now this land lording ain’t easy but with a little common sense I’ll bet in no time at all you would have learned a whole lot about the business.

    So now I suggest the following

    The first thing you need to know is if you are qualified to purchase a home. You will not get a contract, talk to a real estate agent or anything unless you know if you can afford to purchase a home and how much this is gonna cost.

    So the first thing you should do is contact a “Mortgage Broker’ you may find this animal in your local telephone book. Tell him you plan to purchase a home in the next 6 months or so and want to get “PRE-APPROVED”

    Now this person is gonna want to see lots of documents to prove certain things about you and anyone else trying to buy this home with you.

    So to get you started I am gonna give you a few of the things you will need

    #1 Fed income taxes for 2 yrs as well as W-2 for the same period

    #2 Pay stubs covering one complete month.

    #3 6 months from bank statements from all the banks you use to include any 401k plans at your place of employment.

    This will get you started during your first interview. Now don’t plan on a short trip to the mortgage broker’s office or telephone to fill out the application. There are lots of questions as well as lots of forms to sign that are required by state and local authorities. He will even fax them to you. Make sure they are accurate as possible before returning them.

    Once he has the documents signed and back in his hands, he will run a credit check thus finding out your credit score. With this credit score he can now tell you what loan programs you are qualified for. The appropriate monthly payment, how much the lender will allow you to borrow to purchase your home as well as tell you about the interest rate of your mortgage.

    Once this has been discussed with you and whom ever is gonna purchase this home with you, now you are able to find a real estate agent or the mortgage broker can recommend one. At any rate you now have your “PRE-APPROVAL LETTER” and now you can look for this home you want to purchase.

    Once found you go back to the mortgage broker to complete the transaction. He will order an appraisal to prove the value of the home you have selected. The real estate agent will draw up a sales contract for you and the seller to sign. He will give copies to the mortgage broker, and escrow closing agent.

    Your mortgage broker might want additional items from you this is normal just find what he needs he is working on your behalf and acting as go between you and the lender.

    Shortly thereafter the mortgage broker will call and set up a date for you to sign your loan docs, again plan on being there for a time. This is not hurry up process.

    I hope this has been of some use to you, good luck.

    “FIGHT ON”

  4. Reply
    William M
    November 20, 2011 at 10:54 am

    Fantastic idea! Spoken like a true mortgage broker. Of course, that’s one way to do it. BUT, the best deal can be made in home forclosures and handyman specials. I live right here in Georgia. I am your neighbor. Houses around here, run from $ 30,00.00 up, depending on the location and how much land is involved. I had four houses on the “farm” I bought, and rented out one. The tennant wanted their own house. So, he went to a bank ,got a handyman special,and wound up with a mortgage payment equal to the amount of rent he was paying. Today, his handyman special is a beautiful home.

    The problem facing allot of young couples is that their eyes are bigger than their stomaches. They want to buy a great big house with no money down. It can’t be done! So, accept allot less, have money left over to do fix ups and you will increase the value fourfold. We, at ASK, are willing to helpand advise you all through any project, just like the fellow before me did.

    Just for an instance, I was able to pay cash for my farm because I bought a home for $ 75,500.00, renovated and updated it and six years later sold it for $ 227,000.00! I invested $ 30,000.00 in the renovation. Not bad, eh?

    PS; PLEASE do NOT buy a doublewide! They are like new car purchases. The value declines ever day for life!

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