I am about to graduate college and will be working in PE. I don't want to rent and want to buy a house somewhat soon in my career. At what age did you buy your first house?
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Honestly right now, I don't think it is worth it. With interest rates where they are, something comparable to what I can rent is significantly more per month.
For example I am seeing a $1,200-$1,500* dollar minimum monthly difference in my market. I am just pocketing the extra cash right now and will either roll it in my next coinvest opportunity or let it grow until, the housing market adjusts a little more. I don't think there will be a drastic correction, but right now I am looking at condos and apartments for sale, so I will just wait until a full blown house at this point.
*For units 700-1,000 Square feet with either 1 or 2 bedrooms and 1 or 2 bathrooms.
Yeah, I've read a lot that the price to rent vs buy is the most significant difference in a long time and that renting is cheaper. I don't like how I am not gaining any equity from it, so it sucks rn.
I mean if you put less than 20% down you will probably need Mortgage insurance.
On your mortgage for the first 10 years you will be paying more interest than equity build.
You have property taxes.
Now mention if anything breaks, you are on the hook for that Capex.
Houses are expensive. I would say my net worth is on par or ahead of many of my friends who have bought in the last few years.
It's actually not "in a long time". It's the most significant difference by far since they started tracking it. If you look at a graph of cost to buy vs cost to rent, the cost to buy looks insanely out of whack compared to historical trend while cost to rent only looks slightly inflated.
The last time this metric got pretty out of whack was around 2006-07, and even then it wasn't nearly as bad as it is now.
Bump. Interested in hearing more perspectives.
Based on the insights from the Wall Street Oasis dataset, many individuals in the finance sector, including those working in Private Equity (PE), consider purchasing their first house at various stages in their career, often factoring in their financial stability, career trajectory, and personal life plans. A user shared their experience of transitioning to Real Estate Private Equity (REPE) and aiming to buy a cheaper house to live below their means while saving for investing in properties. They hoped to own a cheaper house and be on their way to buying their first property by the age of 31 or 32, starting this journey at the age of 26.
This reflects a common approach among finance professionals: prioritizing financial stability and investments early in their career before committing to significant purchases like a house. The decision to buy a house is often influenced by personal financial goals, the desire to invest in real estate, and long-term career plans. It's also worth noting that buying a house comes with significant transaction costs and requires a commitment to stay in one location for a longer period to make financial sense compared to renting.
Given your situation, graduating college and starting a career in PE, it might be wise to focus on building your savings, paying off any student loans, and understanding your career trajectory before making a decision to buy a house. Consider your financial readiness, the stability of your job, and your long-term personal and career goals when planning your first home purchase.
I got very lucky and the first three homes I purchased were in 2017-2021, so rates were very low (4%) and at bottom when I bought my primary… which I am looking to sell right now and move into a triplex. Going from a 3.325% rate to 7.625% sucks, but I don’t think it’s going to matter in five years. I can refi for a new rate when/if the Fed does cuts. And if they don’t and this is the new normal, housing in my particular region is going to stay inflated and become more expensive.
If you are from Socal like your username, I can't imagine the spike in monthly mortgages this past couple years with the avg house at around $1M
Yes it has been pretty drastic here (SoCal) given the size of the mortgages. Prices continue to rise solely due to the housing gut.
Plan to buy in 5-8 years for $1.5M - $2.0M.
Isaiah, I see you commenting on almost every post. What do you do for work, and can I work for you??? lol
lol. I have experience in a variety of different roles centered around management consulting, corporate finance, defense industry, private equity, neuroscience, automotive, US special operations, poker, modern art, agriculture, lumberjack, and caregiving.
I’m not currently hiring, but feel free to DM me to keep in touch. :)
Live in NY. Originally had plans to buy a 2BD/2BA condo for ~$1.5MM or less within 5 years (~40%-50% down). I have completely given up that dream. Interest rates are high and even though they will decrease slightly over time, it won’t be at 2020/2021 levels. Plus my market doesn’t have impressive product at my price point anymore. Values have just blown up. I’m at peace with just renting a luxury apartment in a really nice building. Renting is certainly much cheaper than buying (rents are anywhere between 70%-100% cheaper than mortgages in my area). However, I’m planning for some capital events to materialize within the next ~10 years so that I can eventually buy a house down the line. Kinda sucks that as a Gen Z, I will never have the same buying opportunity that Boomers and Gen X did.
If you don't mind me asking, what do you do for work that you are Gen Z and could afford a house like that in the next couple years.
Def not within next couple years, I mentioned five years. Banking then private equity. Also must mention, I pay very little in rent compared to my income now so it has allowed me to save more than my peers.
Currently 22, recent grad
About to finish paying off all my student loans then the plan is to start investing / saving heavily. I live with my two bestfriends and really have no desire to live alone.
That being said: my goal is to get $100k in investing accounts and another ~$10-15k in a HYSA. Then once my next 3-5 years are more foreseeable likely start saving more for a home. I want to be in a position where I’m able to put a hefty down payment on a home once the rates go down and comfortably afford the payment, taxes, HOA, repair and all the other high associated costs of home ownership
I’m guessing I’ll be looking to buy around 26-28
Have about $250K stashed at my Trust planning institution for a Down Payment and another 50-60k for more dwn pmt or closing costs, we are looking $1.2M to $1.5M, but I just can't pull the trigger, seeing what these people paid in 2020-21 for their house asking 450k more, due to lack of inventory. Add on I can rent and do a house in the same community for 4500 a month, while my mortgage would be about 8500ish for the same house, sometimes 400-500 sq ft tinnier. I recently got approached by a colleague they need investors, they have done probably 6-7 different properties over the last 5 years and make about 12% annual return, plus they usually do cash out reif's and make a decent chunk then and keep the property cash flowing. I've thought of just saving money again and waiting for the stock market dip and pumping in the difference between rent and mortgage and using my down payment as an investment and, in a couple of years after a refi, buying a place for ourselves. There were a couple of articles a bit ago about people that make north of $250k as a household, typically in Tier 1 cities/suburbs, with cash-heavy their long-term investments at a 10% return and added contributions of just the difference between rent and a mortgage being more beneficial in the long run to rent always. Also, our Hot water heater went, and within 24 hours replaced brand new and no cost to me.
There is also a calculator out there I think Bankrate has one showing if you should rent vs buy!
Yeah, I've been reading a lot recently about how the Cost to Rent is significantly lower than the Cost to Buy right now. How many years out of college are you?
For Grad school 3.5....Stem Master in Mathematics/Game Theory and Quant Fin
I hear you but that $4,500 rent could be $4,700 or $5,000 next year especially if the landlord has to replace HVAC or if tenant keeps requesting repairs all the time. Yes you could always move if rent increases are significant but it gets tricky once you are married and have kids, then you are thinking about stability, school district, etc. I also hear you on that you could rent and invest the difference in rent vs mortgage but historically people have just not been doing that or they find it hard to. Owning a home and paying a mortgage is like having a forced savings account or a 401K where you dont have to think about it. People who used to rent and not invest money are suddenly "forced" to invest when they become homeowners and start paying their mortgage. I live in a HCOL area and I agree with that the run up in prices compared to 2020 has made buying so much harder and I might be 100% wrong but the way things are looking I think I will be confidant in saying at least in the market I am in where even in 08 prices didnt drop that much and it rebounded quicker than most markets, that prices in 2030 will be higher than what it is in 2025, and in 2035 it will be higher than what it is in 2030 and so on. But that being said one should buy whenever one wants to, be it in 2025, 2030 or 2035, whenever you are financially more secure. Or it's okay to not buy as well. It'd a choice, I think the homeownership rate is around 65% right now, so around 35% either cannot afford to buy a home or can afford to buy a home but decide renting is better for their lifestyle and circumstances.
Looking to buy it ~1 year after I graduate. I've currently saved up ~$125K, and will graduate with around about the same amount, with no debt
Hopefully I can save up to ~175-200k and put 20% down so I don't get completely fucked by interest rates
lol I’m guessing it’ll be after I’m 30. If NYC then push it out even farther
Started with a condo but it was a little over a year after graduation
5-10 years. $1 - 1.5M. I'm pretty broke post MBA. Plan to save aggressively. Plan to live close to my parents and that price range would be on the lowest end in their area.
Idk if age matters that much, more like when your numbers stop being fragile. I grabbed a small starter place in my mid 20s, put down less than I wanted, kept cash back because stuff breaks nonstop. I used Time to Close Title and seeing all the little line items made me glad I didnt drain my savings to hit some perfect down payment. Tbh buy under your max, keep an emergency fund, and make sure you actually like the area because moving again is expensive and annoying.
Yeah this is the part nobody tells you. The down payment flex is cool until you realize the first year is just random stuff dying, water heater, appliances, roof surprises, whatever. Buying when your cash flow feels boring and you can keep an emergency pile is way more important than hitting some magic age.
29 Y/O $550K @ 3% APR in Dallas, TX. Have multiple smaller investment properties around ~$250K level, same APR.
Live in NYC now. Will wait until daughter is of school age. Probably looking at 1.75 / 2M at ~37 in UWS.
First of all, ignore the title in my profile (I'm old and cranky with back pain).
I bought my first home back in 2011. It was a 1 bedroom co-op on Manhattan's UES. It cost me just under $300k and I did not finance it. The co-op's bylaws had this absurd rule where if a potential owner is getting a mortgage when purchasing an apartment unit, they have to set aside a bunch of cash in a reserve escrow account to pay the monthly maintenance. I said F that and just paid all cash. I was fortunate to be able to do this, but it meant I was house rich and cash poor for a while.
I don't live in this house anymore (I moved to the 'burbs after the kids came along), but I still own it. NYC co-ops are usually very restrictive about renting out your apartments. In some buildings it is strictly verboten. In my case, it's not outright forbidden, but they make it such a pain in the ass that it might as well be. Co-ops also don't appreciate as much as condos, so if I tried to sell it today, I would probably only get $400k for it. Maybe $500k. Pretty terrible for 14, almost 15 years of ownership...
Don't want to play Mr Hindsight, but this is the crazy part. Think if you just had that 300K in a ETF or Index fund. What I argue all the time on the opportunity cost of even a 10%ish down payment. You lose market growth, which will always outpace the gains on a property's appreciation, even if this wasn't a coop and saw the crazy increase NYC condos saw, it's still a bit behind the SP 500, and you'd have all the sunk costs.
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