Buy house in USA, if returning to india in future

ahyderabadi · Post by **ahyderabadi** » Fri Jan 04, 2008 10:32 pm

We live in Dallas, TX and we plan to return to India in the future.
It might be 3-4 years before we return, should we go ahead and buy a house here to build equity?

obelixr2i · Post by **obelixr2i** » Fri Jan 04, 2008 10:34 pm

3-4 years? in Dallas? Forget it. I won't buy anything until I am willing to grind it out long term. God knows when the market is really going to bottom out.

ahyderabadi;69878We live in Dallas, TX and we plan to return to India in the future.
It might be 3-4 years before we return, should we go ahead and buy a house here to build equity?[/quote]

rk888 · Post by **rk888** » Fri Jan 04, 2008 10:49 pm

ahyderabadi;69878We live in Dallas, TX and we plan to return to India in the future.
It might be 3-4 years before we return, should we go ahead and buy a house here to build equity?[/quote]

If u can invest same amount in Indian real estate u can get atleast 5% appreciation for your investment or if u don't want to take risk bank FD rate is 9%. I am sure it is very difficult to get same returns in US housing market.

gabbar007 · Post by **gabbar007** » Fri Jan 04, 2008 10:59 pm

ahyderabadi;69878We live in Dallas, TX and we plan to return to India in the future.
It might be 3-4 years before we return, should we go ahead and buy a house here to build equity?

3-4 years is too short a time to buy a home, strictly financially speaking, it is a loss making proposition.

ahyderabadi · Post by **ahyderabadi** » Fri Jan 04, 2008 11:00 pm

How many years do you suggest to stay before selling a house?

murari · Post by **murari** » Fri Jan 04, 2008 11:19 pm

I can say it's good to buy home. In Dallas you will get decent home for 250,000. You may not get appreciation when you sold after 4 years. But you have advantage of tax credits on mortgage interest and property tax in addition to your equity on principle. At the end it's win win situation, but you will have satisfaction of having home there and carry those memories when you R2I.

ahyderabadi;69878We live in Dallas, TX and we plan to return to India in the future.
It might be 3-4 years before we return, should we go ahead and buy a house here to build equity?[/quote]

picket · Post by **picket** » Fri Jan 04, 2008 11:25 pm

If you are convinced that you will R2I in 3-4 years, like post # 3 suggested...invest in your future home in India. Invest in a property that will be livable in 3-4 years.

From reading posts from here, having a own home when you R2I makes a difference.

ILuvHyd · Post by **ILuvHyd** » Sat Jan 05, 2008 12:45 am

ahyderabadi;69887How many years do you suggest to stay before selling a house?[/quote]
Atleast 7 years to recoup the transaction costs as per financial gurus.

moreqa · Post by **moreqa** » Sat Jan 05, 2008 9:42 pm

'to build equity' -> This consists of a) your principal amounts (on the loan payments, etc) and b) home price appreciation. For the former, a simpler way is you can deposit in a bank account that gives interest (here or in India). For the latter, you have to cross your fingers - I don't think dallas housing market is growing at any rate.
Now consider the expenses -> house maintenance, property taxes, and interest on the loan amount. These would be completely absent if you just built the equity (equivalent) through bank accounts or other means. You do get a part of some of these expenses back as tax breaks, but the remaining of the expenses are still expenses from your pocket (e.g., you pay $100 as interest and get back $30 as tax break, so you still have $70 expense). One of the major final expenses on the house would be 6% commission you have to pay to the selling broker (e.g., if you sell the house for $250,000, you have to pay $15000 to the broker).
All in all, I think it is a big losing proposition to buy a house in dallas if you are going to R2I in a few years.

direstraits88 · Post by **direstraits88** » Sat Jan 05, 2008 10:57 pm

ahyderabadi;69878We live in Dallas, TX and we plan to return to India in the future.
It might be 3-4 years before we return, should we go ahead and buy a house here to build equity?[/quote]

The first question is do you have 50k of cash for putting a down payment...? (Forget 95% -100% financing option..)

If you have the cash ready for a downpayment, then read ahead.

You need to live for 10 years in the home to build any equity..This is very true for Dallas which saw no appreciation even during the boom time this past few years..

Otherwise, you should buy the house to live in it now and enjoy.. (as suggested earlier..)

I remember a quote in Wall street Journal, which is usually bullish,conservative and pro-home ownership.

"Buying a Home is a Lifestyle choice not an investment choice.."

If you plan to buy a home for "bragging"... be prepared to just walk away without any equity and the with the memories of living in your home.

Alternately, you can also look at the option of renting a house if you have kids.
Unlike apts, you will have a backyard for the kids and also desi parties...