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$100k/year still might not be enough to buy a home

wsj.com

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Re: $100k/year still might not be enough to buy a home

#171

Post by tathougies »

We rented while making good money because it's easier to rent. We're now buying a house. I genuinely like fixing and maintaining houses, so it makes sense for us. However, most people don't. For them, it makes a lot more sense to rent. If you're rich and have a stable source of large income, it's almost always better to rent all your stuff. Not only is rented stuff of higher quality (because you can always have new stuff), someone else takes care of it for you. This is good. My wife and I will soon sell one of our cars, and rent a car if we need it, because a rental car is certainly going to be newer than any car we own, and if it breaks, someone else will fix it. Renting is superior from a user experience perspective. If you can afford it, it is the best.

And yes, we're planning on renting out a unit in our home. It will be a very nice unit and the renter there quite lucky (as are all renters) because someone else -- me -- will take on all the risk if anything breaks.

Re: $100k/year still might not be enough to buy a home

#173

Post by refurb »

justinzollars wrote: post #9

$100,000 still a lot of money. You can buy a beer in Vietnam for 20 cents. The problem in the Bay Area, where I live, is we artificially limit the amount of housing. So prices move to infinity.

Interestingly housing is very expensive in the cities in Vietnam, on a relative basis.

A friend’s mother sold a 1000 sq ft home in Saigon for $250,000. New apartments are often $100k+.

Considering the average wage is $6,000 in Saigon, the housing is outrageous.

Re: $100k/year still might not be enough to buy a home

#174

Post by aidenn0 »

While housing is an issue (particularly in more prosperous coastal cities), if I made over $100k per year but couldn't afford a house in the $400k range, I don't think my response would be to rent a single-family house in Stapleton. There are more affordable apartments in the Denver area that are still in a good school district.

Articles like this are starting to annoy me because I see the working poor and lower-middle class, who have very serious financial issues today lumped in with young professionals with 2010 levels of student debt trying to live the lifestyle of young professionals in the 1980s (who were largely free of student debt) to their own financial detriment.

If you have a household income of $110k and both work in SF, you are screwed. If you have a household income of $110k and live almost anywhere else in the country, you have options.

Re: $100k/year still might not be enough to buy a home

#175

Post by jandrese »

anonuser123456 wrote: post #125
dbtqgoat wrote: post #99

> “I can’t think of anyone we’ve rented to recently who didn’t make $100,000,” said Bruce McNeilage, who owns 148 rental homes around the Southeast and is building 118 more. Well there’s your problem. Quit building unaffordable housing.

In most 'unaffordable' locations, land is way more expensive than housing. My house, to build new, would cost 250k. The land it sits on is another 750k. The right answer would be to demo my somewhat old house and rebuild 6 units on it. But you can't; setbacks, height restrictions, parking spot requirements etc. make that impossible. Why? Because everyone in the neighborhood already 'got theirs'. But from a usage stan…

You can't build cheap housing, it would drop property values!

That's not too far from the truth either. Comparing "comps" is a lazy man's game. They don't look that closely at the houses they are comparing.

Re: $100k/year still might not be enough to buy a home

#176

Post by seanwilson »

aledalgrande wrote: post #64
sjdb77 wrote: post #30

Earlier quoted context omitted.

Remote work is becoming more "real" by the day, so it's certainly possible in the age of the internet to work remotely in a low cost location while making a salary competitive with a higher cost of living city like SF/NY/LA.

Problem is a lot of companies get smart and "pay by location". I've seen big cos from the Bay offering half the salary (before currency exchange) for workers in Vancouver.

> Problem is a lot of companies get smart and "pay by location"

I never saw any sense in that. Would they start paying you more if you later moved to a more expensive location?

I work freelance remotely for no country in particular and my current location is never a factor for prices.

Re: $100k/year still might not be enough to buy a home

#177

Post by refurb »

aledalgrande wrote: post #52
justinzollars wrote: post #9

$100,000 still a lot of money. You can buy a beer in Vietnam for 20 cents. The problem in the Bay Area, where I live, is we artificially limit the amount of housing. So prices move to infinity.

I would say that is a problem in any place where it is desirable to live these days. Locations I've experienced first hand: London, Sydney, Bay area, Los Angeles, Vancouver... and I'm sure there are many more where you can't buy on that salary.

When I first moved to the US a decade ago, I got a job in a mid-sized city in Michigan paying $52,000 per year.

Had zero problem saving up a down payment in a couple years. Brand new houses were $150k and older, nice home were $90k.

Of course the job prospects aren’t as good as a major city, but housing isn’t a major issue.

Re: $100k/year still might not be enough to buy a home

#178

Post by bradlys »

sjdb77 wrote: post #15

I'm in a mini-retirement right now and living in SF. It was surprising to learn that below like $50k you basically pay 0 in income tax in California. As a single person I can very comfortably live off $40k/year in investment income and pay no taxes right now.

> very comfortably

> (No car, no drinking, cook during the week)

We have very different views of "very comfortably" living.

For reference, the amount you have remaining every month after paying rent is close to what I end up averaging on vacation! And I definitely don't think I live a very comfortable lifestyle. (My vacations aren't even that nice - we rent budget cars, fly max economy flights, almost always stay in the bottom 25% of AirBNBs in cost, and almost always eat at $-$$ restaurants) Compared to most Americans - clearly, I spend more on vacation. Compared to my SF Bay Area peers - I spend nothing.

Re: $100k/year still might not be enough to buy a home

#179

Post by aledalgrande »

bradlys wrote: post #153
sjdb77 wrote: post #117

Earlier quoted context omitted.

Work for yourself eventually?

All of these options people are presenting are not realistic for most workers. Contracting, starting your own company, and working at the same place for the rest of your life are generally not advisable (Or even doable!).

Yes I think a lot of people were thinking of working for Lehman Brothers until retirement, but then the company died.
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