Will I ever make my money back?

Question

I bought my house 8 months ago and I think I might have paid to much. I was foolish and didn't make a wise decision. I bought a house during the housing boom and now that we're heading for a slow down or recession I doubt I will ever make my money back. I paid $180,000 for a 800 Sq foot home with no yard or garage. People warned me but I didn't listen. And I just found out my basement leaks and needs $20,000 in repair. Maybe I should just walk away and let Canadian Housing and Mortgage Corporation pay off my mortgage. At this point there is no way I can make my money back. It turns out that I am not alone.

Answer 1

You are a victim of the bubble....you will not be the last either....these people on here say "It'll come back,it's a long-term investment" are the next to see what a bust really means....They will not live long enough to earn their money back...life's lessons.

I rent and may offer $50k for your place when it goes back to the lender, but, who knows, I may find an even better price on a bunch of the other victims propertys.

Answer 2

Try to turn "disaster" into an opportunity - hard as that sounds. Look at that list of needed repairs - pick out the things that would provide the greatest benefit at the least cost. If there are heavy duty structural problems - that's a problem but if some are doable at reasonable cost you might indeed have to put more money into the house but when you cure the defects you might find you're adding value even in a declining market.

Many do well in attacking repairable defects -it's easiest if you have skills and contacts to do the work on the cheap but even if you're forced to hire the work - interview several contractors and get their take on cost/reward. Same with someone in real estate. Probably not the agent who led you to this property however. They'll still defend it.

Hopefully the 180K you paid took some of the the problems into account for the area you're in. Something's good about the general area or the small size wouldn't merit that price -so you may have as some opportunity.

Priortize, don't despair, get sound advice, good luck. Did you have a home inspection? That's just a curiosity question on my part.

Answer 3

Giving your house back to the mtg company is not the best way to go. You have only owned the house for 8 months and that is not enough time for a true investment. Sometimes a good investment in a home will take a few years. You can wait it out and hope and fix things up here and there and see what happens. Having a house in default is bad for your credit and will make it hard for you to get another home later on. Give the market a chance to bounce back. We all would like to make instant money but houses have never been an instant return. If you bought it for that maybe someone else will also. Fix the basement and if you can, enjoy the house while you live there. Make memories. Keep making the payments and ride the waves.

Answer 4

You got some good advice here. Do not default. Stick it out. I know it is a small place and I don't know your family situation but maybe you could rent your best room to a student to get some monthly cash. Enlist all the help you can get from friends, relatives and neighbours to fix up the basement, but scrape up enough money for expert advice to make sure the job is done right.
Look at the bright side at all the lessons you have learned. Now you have these valuable insights
1. Before bying your next house ask your realtor to check the prices of houses recently sold in the neighbourhood to see if the asking price is in line
2. Before signing the agreement of purchase get a home inspector
3. Before selling this house build up some equity.8 months is not long enough.
Re-align your priorites for the time being. Skip the treats, take-out foods, movie is in theatres, clubs, new wardrobes etc.. Instead invite some friends over for a game of scrabble, or rent a movie to watch together. Buy only one new item for your fall outfits, coordinate with the rest of your clothes. Check out Goodwill for items such as chairs, teapots etc. I have found some terrific buys there and no one knows where they came from.
Hang tough, hang tough, be patient you will enjoy this place eventually and when you sell you will get your money back down the road.

Answer 5

Two points, first NEVER default. It will take a decade for you to recover if you do so. It isn't there fault you made a terrible mistake.

Second, homes are never good investments. If you look at CPI data in the United States, and factor out the change in interest rates since 1982, you will find that you only broke even with inflation in the average home. In bubble areas, of course, prior owners made out like bandits, while places with adverse demographic shifts lost money to inflation.

The only reason to own a home is to live in it, it is never an investment. Rental real estate is a different issue. However, rental real estate has thin margins and so you have to be very financially well off to make money at it and be diversified.

I own a 2700 square foot home for $74,000, but I live somewhere where there is no demand.

Eventually, inflation will cover your losses and paying down the loan will let you get out. It may take a decade.

Answer 6

I don't know how old you are...but by defaulting in your mortgage your credit will be damaged for a long time, besides you can't buy a house and treat it like you would in the stock market, selling and buying every other day. How do you know, that your house will double in value within the next 5 or 10 years. How come you didn't have your house checked by a reputab le company before you signed the papers. Did your attorney recommended you to do that?
Good Luck

Answer 7

your house should have equity ... even if you bought it for more than it would sell now, housing booms happend all the time ... just be patient and keep up on repairs and keep checking with the market, the more upgrades and the better you keep it will help you make your money back. if you give it to the mortgage company you'll never be able to buy a house again ...

Answer 8

Will I ever make my money back? Yes and no. Yes, if inventory reduces in your area, interest rates fall below 3.5%, or if the population in your city start to increase rapidly. No, if inventory is really high, interest rates stay above 4.5%, and if the population in your city decreases. You can sell the property now, but you will have to pay the difference between what you sell the house for and your mortgage (most likely negativity equity).

Answer 9

The truth is investing in real estate is a long term endeavor. Stick it out and within a few years you'll be singing, "I can't believe I got my house for under 200K!"

Answer 10

Did you buy a home warranty?

You might be able to sue the seller for not disclosing the problems in advance. I am in the USA and that is illegal here