First time home buyer in Seattle

10 Replies | Seattle, Washington

Hello everyone on this forum,

I have been living in Seattle for 5 years (renting) and I know I missed the opportunity to invest at the right time :(. However now I plan to buy a property (basically to save on my rent and hopefully appreciation).

I work in SLU and I have been looking properties in Queen Anne , Greenwood , Green lake , Ballard area. My budget is 650-700k max(20% down).

Now I am confused between two options:

1. Buy a townhouse/condo in Greenwood area and live there to enjoy shorter commute to SLU. But I am not sure about the appreciation of this area. Everyone says that the growth (> 10%) is not in these areas but in suburbs like Lynwood, Sammamish etc. 

2. Buy a house in far off places like Sammamish, Lynnwood etc. and rent those properties to break even with my rent. 

My end goal is to save on my rent and make investment in an area with good appreciation. 

Any suggestions on good locations?

Hi Amit,

It sounds like you’re weighing a couple of options that both could work out favorably for you. Buying a property and renting it out (option 2) is not likely to cash flow enough to really concern yourself with saving on your rent; not right away anyhow.   

Let’s connect and discuss strategy. I’d be happy to hear about your goals and work with you through potential options. 

The least expensive way to live is by renting. It will allow you the greatest amount of saving capacity. Owning a home will cost you twice as much as renting.

Take your savings as a renter and invest out of state in income properties that will produce positive cash flow. I would not speculate on appreciation in todays markets. 

Hi Amit,

While difficult, don't spend your time worrying about what choices in the past you could have made.  You make the best choice you can at the time with the information available and then you move forward (which is what you are doing now).

Another choice you could look at is to purchase a property (townhouse/condo) close to the area you want that you could rent out one of the rooms.  This would cut down on your living expenses / costs, while still giving you all the benefits of owning.

Out of state investing can be a good strategy but I wouldn't recommend it for someone just starting out.  That's just my personal preference so others will have a different opinion.  

Best of luck.

@Jake Alger : Option 2 won't generate any cash-flow but at least someone else will pay for my mortgage. I will continue renting where I am currently (U-District) and rent my house (in whatever location it would be) . This way I am not throwing away money on rent. I personally don't want to live in a location from where I have to commute (>30 mins) and that's the reason I have option 2 on my list.

@Thomas S.: It seems like a good option however I don't have experience in buying properties out of state ( I am ruling this out for now). This will be my first property and I have saved enough to put 20% down by renting for 5 years. I used 

@John Barrett : That was my best case scenario but finding a property with separate entrance for paying guest (I like my privacy) is almost impossible with my budget (700k)

@Amit Yadav I see what you're saying about the investment property.  The way it was worded I thought you were going to attempt cash-flowing the property to save a large portion of your rent.  

Finding a property with a separate entrance isn't out of the question within your budget, the inventory is just low in U-District.  When something does come on the market, it's gone in a matter of a few days.

@Amit Yadav , out of state investing for rentals will provide you a higher upside just due to lower cost of entry, but it is definitely best for those with some experience. There are a lot of logistical "potholes" in the process as well as savvy turnkey providers who are happy to take advantage of your niavete.

Bob 

Is it okay if I ask for advice on few zipcodes? Is that against the tenets of this forum? Please let me know.I will put my question here in case it's a okay thing to do.

What do you think of zipcodes 98115 (link rail in 2021) and 98105(u district) and 98109( queen Anne ) in terms of appreciation. 

Would it be better if I buy a property in Lynnwood area instead (and live there) and compromise on the commute. I would only do this if appreciation prospect in Lynnwood is more than the above two zip codes.

Amit - thanks for the post

N Seattle / Greenwood  likely has lots more appreciation in the future IMO due to 1) relatively close proximity to downtown    2) future increased transit  options being  built presently ( light rail ) 

buying a " far off "  property  in order to pay for present rent  …..  this  would assume that your rental income  will be large  enough to  cover all the monthly  expenses  for the home purchased   PLUS  to cover  your present  rent payment  …...you would need  a large rental income  on this property to accomplish this  need 

fyi - if you end up buying a  condo -  if your  down payment can be at least 25%  of the purchase  price - your rate/ fee options will be significantly better as  compared to the 80% ltv  options  ….feel free to call or email with any questions regarding seattle as this is where we are located

The market there is cooling off quick. Not that it will go in the other direction, but you might want to wait and see how the rest of the year shakes out. You'd be buying at the peak of the market, which is still fine, until it's not. There's a slight dip in competition in the winter for residential property anyhow so take that into mind.