Most state government jobs don’t pay enough to justify $300k in a house regardless of what the “experts” say
OT: Explain please
- Thread starter horshack.sixpack
- Start date
Single family rental of new construction housing is hard if you aren’t in a high demand area that is going to see appreciation. For cheaply built tract homes, a lot of the way they make it cheap to build makes them unsuitable to hold for rentals. If they were going to hold them, they would build them higher quality, but that would make the cost higher, which would make renting them less attractive.
if they build them all in for $150k a unit, they really need to rent them for ball park $1,500 a month with the tenant responsibility for utilities and yard care. Getting enough square footage that somebody will pay $1500 a month and also building that square footage for $150k, including land costs, is pretty hard.
This sounds like a great opportunity for Jackson to add more Crack houses. Well done Jackson.
The vast majority of working aged homeowners are dual income households. Most people buy their first home 5 to 7 years after starting their careers and spend several years saving and cleaning up debt before buying.
$300k is extremely affordable even at today's rates for a couple of school teachers or bureaucrats making $45-$50k a year each, as long as they are not overburdened by other debts.
Of course, that's sacrilege to the Dave Ramsey types that will tell you to live in your mom's house until you pay off every debt on the world and save up enough cash to buy a house with 50% down on a 36 month note and to eat rice and beans your entire life to make sure you have no debt, ever, for any reason under the sun... Those types are the life of all the parties they attend.**
I listen to Dave Ramsey. He’s preaching to the mass of idiots who undoubtedly exist.
Up until the last 2 years I was making way more on my money than what the bank charged me.
But I make around double what you listed and I’m not married or don’t have kids or a ton of extra debt and I’m not buying a $300k house bc I don’t NEED it.
Neither do most people.
Dave has apparently actually moderated on the home debt. I used to listen to him probably 15 years ago and he seemed relatively hard core about 20% down, 15 year mortgage or you can't afford it. I randomly heard him on the radio when I couldn't get my phone service to work probably like five years ago and he actually told somebody he was fine with 5% down on a first house provided they meet the percentages he recommends (I think no more than 25% of gross is his metric?). He also actually tells people to not live with their parents unless it's a very short term with a set goal for moving out.
You don't need it for survival, but I don't live in a very expensive area and I would have trouble finding a house for under $300k that was in a decent school district and has 3BR/2Ba and 1800+ sq ft. You have a family of four or five, and that's not exactly a spacious house. Certainly those houses exist for under $300k, but they're going to come with deferred maintenance and probably be energy inefficient so there are going to be some costs to offset the upfront savings.
Like I said... Fun at parties.
A shelter is a need. A house is a want. If you're living in anything more substantial than a FEMA trailer, you're being extravagant by your logic.
To think a $300,000 house is some kind of lavish expenditure on a house in 2023 is misguided to say the least, even in MS. For a couple making $95,000 a year, that mortgage payment represents less than 20% of their gross income. You buy a home for the same reason you buy a dog, not because it's a good investment, but because it will make you happy, not because it's a good investment.
You'd shìt a 2 ton brick if you saw what the rest of us around the country pay for housing... There hasn't been a condemned outhouse available in my markets for less than $400,000 since the housing crash.
Cheapest single family house in town
"You buy a home for the same reason you buy a dog, not because it's a good investment, but because it will make you happy, not because it's a good investment."
I get your point but if a house brings 300K in that area the only "happy" person will be the one who sold it.
I get your point but if a house brings 300K in that area the only "happy" person will be the one who sold it.
I'm guessing the only way you can sell a house for $300k in that area if it's a house that would take $500k-600k to build, and you also have some real deal security fencing and security gate.
Dave Ramsey will tell you a lot of things you probably shouldn't pay attention to...
What's the draw? Free ice for your beer?Like I said... Fun at parties.
A shelter is a need. A house is a want. If you're living in anything more substantial than a FEMA trailer, you're being extravagant by your logic.
To think a $300,000 house is some kind of lavish expenditure on a house in 2023 is misguided to say the least, even in MS. For a couple making $95,000 a year, that mortgage payment represents less than 20% of their gross income. You buy a home for the same reason you buy a dog, not because it's a good investment, but because it will make you happy, not because it's a good investment.
You'd shìt a 2 ton brick if you saw what the rest of us around the country pay for housing... There hasn't been a condemned outhouse available in my markets for less than $400,000 since the housing crash.
Cheapest single family house in town
View attachment 369461
Well let me tell you something.Like I said... Fun at parties.
A shelter is a need. A house is a want. If you're living in anything more substantial than a FEMA trailer, you're being extravagant by your logic.
To think a $300,000 house is some kind of lavish expenditure on a house in 2023 is misguided to say the least, even in MS. For a couple making $95,000 a year, that mortgage payment represents less than 20% of their gross income. You buy a home for the same reason you buy a dog, not because it's a good investment, but because it will make you happy, not because it's a good investment.
You'd shìt a 2 ton brick if you saw what the rest of us around the country pay for housing... There hasn't been a condemned outhouse available in my markets for less than $400,000 since the housing crash.
Cheapest single family house in town
View attachment 369461
you can build a couple 600 sqft houses for $469,000
you buy some land wherever you are and I’ll come build them for you.
Correct.
You could build some efficient 1200 sqft houses and possibly get $190,000 to 200,000 for them.
Would make way more sense for the clientele and their income.
He's still on the 20% train. He must have made an exception due to some circumstances or something, though I'm not sure what they'd be.
Such as? His advice might not be ironclad for everybody but I've yet to see him actually give BAD advice that will take you backwards. Might not take you as far forward as fast as you want to go, though. If you want to break his rules, it's fine, but at least know why you are doing it.
He used to strongly imply that you could use a 10% withdrawal rate from your investments in retirement, which is a good way to run out of money quickly. His rule of 10 times your income for life insurance is also pretty low. You make a $100,000 a year and leave your wife and young kids with a $1M insurance policy and you are leaving them with a tough adjustment. Maybe SS Survivor benefits makes it manageable but you're still leaving the spouse in a tough position when the kids age out of that.
$1500 is right about what everyone in the Jackson Metro area is charging for monthly rental. It's actually on the low end for anything decent.
One would think... But you are naive to the expenses of building in a ski town in the mountains.
We are looking at $200k for a shìtty lot. And then you have to build a spread footer foundation that is at a minimum of 48" deep. Your water lines and septic have to be 60" deep. Propane tank has to be buried. Septic drain field at least 60"... And the labor has to be completed over the course of 2 summers because the ground freezes for half the year and is buried in snow for longer.
That snow is the kicker. Current code requires 150 pounds per square foot roof loads to hold the snow. That means on a 470 square foot house, you could park an M1 Abrams on the roof and not even get a squeak from a rafter.... In the south you are 12-15% of that roof load. Insulation? R-49 in the roof and a near passive level air exchange is required.
I could go on for days about all the differences. We have plenty of rednecks that know how to build around here too. Cheapest guy in the valley is at $300SF on your land. His houses are t-total shìt too. Mid level is $400-600 per SF. High end is well over $1000/SF.a
You come on up and build me a few. I will take them right off your hands.
May be wrong, but I was thinking they’d need to be on the low end for that location, even if it’s new construction.
IF you'd like a second CF to follow
Developers hope to breathe new life into Metrocenter Mall
Developers hope to be open by mid-July.www.wlbt.com
I was in that area to go by Hutto's not long ago. I drove through MetroCenter for the first time in at least a decade.
There are literally large trees growing through cracks in what's left of the parking lot. It's only suitable as a set for an apocalypse film.
I stopped reading at ski town in the mountains. Let’s talk about 95% of the population
That's a pretty suspect area if it's where I'm thinking near Lake Hico, and not far away from there to the south is probably the deadliest area of Jackson, between Five Points and Hawkins Field Airport. My question about the development is, what are they going to build around it for security??
So I'm not getting my houses. Damn. You said you could do it... Basically insinuating the market is overpriced without knowing anything about the market.
As for 95% of the population, the median home price in the US is 50% higher than what you consider extravagant. 90% of new homes in the US are listed for over $300,000.
A lot of people really struggle to understand the time value of money, and I do think his advice sets people back financially when they take on the mindset of “pay off all debts asap” without taking into account interest rates and rate of return and various tax implications. so, yes, I agree that he’s not telling people to live beyond their means, but I do think it’s bad advice. I had friends refuse to refinance student loans from 6.8% to like 3.5% (and no additional cost) because of something he said. I think he’s since said to do refinancing like that, but it drives me crazy when people leave money on the table like that
I stand by what I said.
you find a plot of land not on a mountain side or in a volcano or in quick sand etc and I’ll build you 1200 sqft and sell to you for a lot less than $456,000
Refinancing the government student loans does come with risks. They paused payments and interest for 3 years and tried to forgive 10k per person. They also offer more options if you lose income. Looking at the straight percentages, yes they could lose money. However look at the last 3 years, everyone with a student loan had an interest free pause on massive loans.
If they were private loans and they wouldn’t refinance, they are crazy.
Dave Ramsey is trying to target people who have serious money and spending problems. His advice doesn’t always apply to households with healthy financials IMO.
Sounds like we've got a new version of "Meet me in the Vet school parking lot", boys
That's not what you said. "Wherever you are" were your words. And excluding the land cost in building a home is cheating anyway. That little shack is valued so high mainly because of the land. Secondly because the cost build is higher. Demand is high in places where lots of people want to own property. Labor is also going to be higher in those some places
The cost of the land and the cost to build vary greatly across this country. You can absolutely build 1200sf for less than that in rural Mississippi where a plot of land costs $30,000. And labor is still relatively cheap. You cannot dream of doing it in the most desirable parts of major cities where the land costs 10x that, or on beaches where you have to build on 15' pylons, or in areas with heavy snow loads, or west coast cities that require net zero building.
This started because you commented that $300,000 is more house than "most people need." That's a goofy take in a world where the median home price is $430k nationally. If you are just talking about wherever you live say that if a good home can easily be bought for say $200k.. But even in Mississippi, $300k is a normal price on a middle class home these days.
This was well before COVID, and the pause also didn’t do much since there wasn’t forgiveness, unless people were either struggling financially or investing the monthly amount they weren’t paying in something else. I agree that there is some risk in refinancing privately in that the government could’ve pushed massive forgiveness through, but that’s not the angle Dave was coming at years ago. 6.8% vs 3.5 is a huge difference, especially with a large loan (like a $300k med school loan, which was what was going on in this scenario)
I can tell you for certain that $300k is about the bottom of the barrel for new construction cost these days for even the smallest of homes / lots….especially in an urban area (even Jackson). You’re not likely going to see very high quality construction or finishes at that price either.
I would be up for it, but I figure Pain would take one look at my impressive physique (body by BBQ build) and then decide that what he really means is he would meet me in any other vet school parking lot because I am actually at that one and he might get a pop knot on his noggin.**
Huh? Are you implying that a $1 million policy isn’t enough money? That’s 10 years worth of income equivalent to double the average US annual income….and you can typically get that paid in full up front and turn around and invest a large portion for even greater return. I’m failing to see the “tough adjustment” you are referring to, beyond the obvious with a death of a family member. You’d have to lead a pretty lavish lifestyle for that to not be enough money for life insurance.
Ya'll are making me think I'm some sort of Dave Ramsey loyalist.
He often says to refinance if you're going to save a point and you're fairly certain you will recoup the difference in the short term future. And as far as the student loans you reference, it all depends on the balance, and when you plan to pay them off, see previous sentence.
The devil is in the details. Many people who are Ramsey haters don't look at them, similar to media shock jock articles. It's almost become popular to say, "I agree with SOME of Dave's stuff, but not all......blah blah blah". Similar to how it's cool for Republicans to say, "I'm conservative BUT not socially, etc. blah blah blah".
Except in this case its not really a comparison to the Jackson neighborhood, because no builders are doing 1200sf homes anymore….at least not in places like MS or most of the country with tract home subdivision setups for most new construction.
The only advantage to such a house for the typical big box builder would be cramming 7 or 8 of them onto a single acre plot, and city / county zoning restrictions requiring minimum lot sizes for SF new construction prevent this from happening. So its more advantageous for the builder to build a house with almost twice the square footage which they can build at only 50-60% more cost, still cram them together as tightly as possible, and that’s how they actually make a profit.
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