Housing Tax Credit - Worth it?

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ATLkm's picture
ATLkm
Status: Member (Offline)
Joined: Jul 28 2009
Posts: 1
Housing Tax Credit - Worth it?

I've been reading through this forum on the different topics from a half a year ago regarding "renting vs owning". While it has caused a lot of anxiety, I haven't made a solid decision. Between the govt's $8,000 and Georgia's $1,800 tax credits (aka about $10,000 in free money), the temptation is high to get my first home. I'd be looking at putting about $14,000 down (including the credit).

My question is if I'm currently paying about $1,100 in rent and a mortgage payment would be about $1,200/month, should I go ahead and make the leap? I figure if the dollar collapses and SHTF I'm going to be in big trouble even as a renter. ...and this might be an ignorant question, but everything goes to heck, who is going to make everyone pay their mortgage payments? Won't it just be pure chaos?

Also, I know there's been some "advantages" mentioned of if you buy a house you can make it green and grow a garden. The problem is I live in Atlanta and home prices here are insane to live near the city (I'd rather avoid the #2 worst commuter traffic in the country), therefore I'd be looking at condos. The prices have really dropped on them lately in an area where everything (work, grocery, mall, etc) is within walking distance. Should that make a difference in my decision? (I'd be ok with a condo if I didn't know about all this behind the scenes craziness going on now.)

Thanks in advance for your help! I'm new to all of this "eye opening" information on the site!

Kman's picture
Kman
Status: Bronze Member (Offline)
Joined: Jan 19 2009
Posts: 72
Re: Housing Tax Credit - Worth it?

ATLkm,

    I am no expert on the Atlanta market.  However, if you are now comfortable and happy in your $1100 a month rental, then may want to consider staying there.  Its unlikely that most markets will start appreciating any time soon, so there is no rush especially as there is a lot more to go with foreclosures.  The tax credits are nice, and may likely be extended or increased to help stimulate real estate- as its going to need all the help it can get. 

   I personally would avoid condos.  They are generally the first to take a hit in prices and the last to rise.  Also, the $1200 a month mortgage you would be paying isn't your only expense- you also have to consider property taxes, insurance, HOA fees, maintenance- so it will be a lot more than your $1100 a month rent.  You should also consider your job- are you confident you are secure?  If you are renting, you have a lot more options, but once you buy you may be stuck in your area if you need to go job hunting.

  The best thing to do right now is spend as much time educating yourself.  This website has a ton of great information.  You could also join a local real estate investors group to get better insights into your housing market.  Educate your self, then make an informed decision.

Kman

LogansRun's picture
LogansRun
Status: Diamond Member (Offline)
Joined: Mar 18 2009
Posts: 1444
Re: Housing Tax Credit - Worth it?

Hold off for a while as I think the market still has a ways to go.  The only reason I would say buy now is interest rates.   Stay away from Condo's as you're at the mercy of the other owners/renters and the HOA.  Move a little farther out and buy a single family home so you have autonomy.  When tshtf you're NOT going to want to be close to people or in a grouping such as a condo.  People will be desperate and defending your home/condo is much harder to do as they will be the first target because of quantity in a small space.  If you move a little farther out you're able to get out of dodge if bugging out is in order as well as you'll be able to start a garden (Square Foot Gardening is easy and gives good abundance in small spaces), and if need be you can even have chickens/rabbits.  We're talking about adding a chicken coop connected to our garden (fenced) so they can fertilize as well as help in pest control.  Small space gardening and farming is key.  Also, in condo living you have minimal storage for foodstuffs or any other items you may have need for.

Hope this helps a little.  Welcome and good luck!

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