buying a house with parental help

ora_43

Sun, Aug 24 2008, 4:36 pm

freidasima wrote:

Also if you are buying in a city and not living on a yishuv somewhere in a caravan, prices are expensive.

There is no need to buy in a city. That's like saying, "well, if you are buying a luxury apartment in the Old City, prices are expensive." Of course city living is expensive in Israel; it's expensive everywhere.

"In a city" and "in a caravan" are not the only two options. You could live in a house or apartment in a yishuv, or in a relatively cheap city like Arad or Be'er Sheva. Or pretty much anywhere outside of Jerusalem or the mercaz.

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I don't know too many DL young people living in the charedi part of Beit shemesh or Beersheva.

Who said anything about the chareidi part?? I certainly didn't. Both Beit Shemesh and Be'er Sheva have growing DL communities. Also, prices in Be'er Sheva are even lower than what I quoted in my previous post.

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In major urban centers, from Jerusalem to Maaleh Adumim to Gush Etzion to Tel Aviv, Givatayim, Ramat Gan, Petach Tikva, Raanana Kfar Saba, Rishon, Nes Ziona, Rechovot and Zichron, Haifa, Krayot, etc. in today's dollar rate you have to count on between $150,000 to $200,000 for an apartment if you are talking at least two bedrooms and not talking fourth floor walk up.

Again, there's no need to live in a major urban center. The cities I mentioned earlier are large and have all the necessary amenities. It's possible to commute to a major urban center if necessary for work.

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Most parents can say "sure, that's great for 23 year old newlyweds" but when you are 38-40 and still living there, you don't have the strength anymore for that kind of stuff. So in the first place you buy something that a family can live in.

Why would you buy a 23-year-old an apartment for a 40-year-old? I can see planning 4 or 5 years ahead, but 17? Who knows how many kids they'll have? Would you buy a 4-bedroom apartment for a young couple just in case they have 12 kids? Also, who knows where they'll end up finding work? A young couple shouldn't try to find the perfect house for the rest of their lives, that's just not possible.

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Someone wrote that was blackmail or manipulation or some other ugly word (not those two, I don't remember exactly what) to in laws.
Yes, welcome to Israel. Thats what marriage is all about. It's a business deal between parents and nothing more. You do' not expect to be friends with your mechetunim. If you are, fine, but only after all the other stuff is over. It's a business deal. I give X you give Y. You don't want to give, maybe the engagement is over. It happens over and over and over and over. That's life here kiddos.

Are we living in the same country? Scratching Head

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They have army, they have sherut leumi, they have then to study and those who live a kollel life, they want the wife to stay home and have kids and live on a kollel salary? Who can live exactly on NIS 2,000??? So parents pay.

This isn't an Israeli issue, or even a Jewish issue. In general, if people know that you'll work yourself to the bone to support them while they do whatever they want, they'll let you do just that. Especially if they can convince themselves that it's a value to do so. Personally, I find it hard to feel sorry for parents who fall into that trap. It's wonderful if parents want to help their kids through school, or help support them in kollel, kol hakavod to parents who do so. But those who can't afford it shouldn't complain that they somehow "had to" give away money they don't have (if they can't take responsibility, big surprise that the kids can't either...).

shabbatiscoming

Mon, Aug 25 2008, 4:27 am

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Shabbatiscoming, I am talking Israeli couples, not anglos, not foreigners. Israeli children of Israelis in most cases. They all buy apartments and some bought long before the kids were married. Meaning second and sometimes third generation sabras and it is the mentality here.

ok, I still do not know what you are talking about. I have israeli friends and family and the only ones who do this are the chassidish ones. I have a lot of secular family too, third generation sabra and I dont think that they do that. whatever, lets just agree to disagree about this.

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couldnt agree with you more. ill tell you, we started out in ramat beit shemesh and lived there for 2 years but we KNEW that we were not going to stay there and so we did not look into buying there. then in the middle of the second year there, we started to look into different communites that interested us and that made sense for my husband to look for work near and went that way. NOW that we are setteled in a community that we feel is a great kehilla, we are looking about buying, but we never would have before now, it just did not make any sense.

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Someone wrote that was blackmail or manipulation or some other ugly word (not those two, I don't remember exactly what) to in laws.
Yes, welcome to Israel. Thats what marriage is all about. It's a business deal between parents and nothing more. You do' not expect to be friends with your mechetunim. If you are, fine, but only after all the other stuff is over. It's a business deal. I give X you give Y. You don't want to give, maybe the engagement is over. It happens over and over and over and over. That's life here kiddos.

Are we living in the same country?

again, I agree here. marriage is NOT just a business deal. I thnk that the people that you know, its very sad that that is the way that it is.

shabbatiscoming

Mon, Aug 25 2008, 4:27 am

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again, I agree here. marriage is NOT just a business deal. I thnk that the people that you know, its very sad that that is the way that it is.

freidasima

Mon, Aug 25 2008, 10:46 am

I think the issue is that you are looking at mobile couples. The families I know who got their children apartments in cities, the kids were already working there or near there when they got married or studying something where everyone knew that the jobs would be in that geographical area. Especially as it is not really smart to take on a commute of more than an hour each way in the first place, it will eventually cost you the same to drive or time for a longer day for a metapelet if you can't be home earlier...doesn't pay financially.

Nice to say "get an apartment in Beersheva" but what if your job is in Tel Aviv? Or in Jerusalem? Beit Shemesh isn't that cheap any more and a commute costs time and time is also money for a working mother who has to pay someone to watch her children longer than the half hour it would take to get from her job inside jerusalem, pick up her kids and get home.

Again, most young couples won't have the money in a few years to move so what they have when they get married is what they continue to live in for the next twenty years. Where in the world would they have money to save up? They use up their entire salary and more just to live and can't put away a penny. So where in the world could they think of moving to until they finish their first 20 year mortgage? That's about when they are past 40!

freidasima

Mon, Aug 25 2008, 4:25 pm

Not these days Tamiri, at least I don't see it among the thirty five to forty year old frum couples. If they aren't on a yishuv where one can build a bigger caravan/tzrif/house with lots of government capital behind, meaning if they are in a city, they are usually in the first apartment they bought. Again, it's a matter of money. I don't know too many frum young couples who are able to save a grush. They are learning or studying, and so many jobs today pay a real minimum wage. Two people are together earning at the very most 10,000 NIS and then the girl gets pregnant, has to stop working and ends up staying home for a long time because it is followed soon by another baby and another. So all of a sudden they are living on NIS 5-6,000. Of that, NIS 3,000 is going for their mortgage payment, another NIS 1500 is food and baby stuff and the last NIS 1500 is transportation, gas, water, electric,phones, kupat cholim, medication, repairs, books, clothing, zedoko, wedding presents, etc. If they are lucky then parents chip in to help them. And this is without child care of any kind meaning a mother stays home. If not, she usually ends up paying all her salary to child care unless she has a really good job.

You can't imagine how many full time jobs these days are paying a take home salary of four thousand shekel and not more...

So where are they supposed to have money to put away to get a bigger apartment? They have a 20- year mortgage. Their parents paid half the price of the apartment and the mortgage is on the rest. Until they are in their 40s they still have this mortgage payment and every two years another kid for the first ten or more years! That's what I see young couples do if they are really frum. They get stuck unless they have good professions and a big income. But how many are there like that? Most are in education or social work or government jobs which pay bubkes, the girls are all secretaries or teachers which pays bubkes. Not much upward mobility there. I'm not talking doctors and lawyers here...

ora_43

Mon, Aug 25 2008, 4:51 pm

freidasima wrote:

The kind of job that's only found in big cities tends to pay more. If someone is earning a low salary, there's nothing keeping them in a big city, as they can find an equally bad salary elsewhere. If they're earning a high salary, they can usually afford a morgage.

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Nice to say "get an apartment in Beersheva" but what if your job is in Tel Aviv? Or in Jerusalem?

Then you don't live in Be'er Sheva. You live in one of the many communities near Tel Aviv or Jerusalem that is much, much cheaper than Tel Aviv or Jerusalem themselves. Examples: Beit El, Alon Shvut, Adam, Kiryat Arba.

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Beit Shemesh isn't that cheap any more and a commute costs time and time is also money for a working mother who has to pay someone to watch her children longer than the half hour it would take to get from her job inside jerusalem, pick up her kids and get home.

Like I said, a nice 3-bed (2-bath) apartment in a nice neighborhood in Beit Shemesh costs around $120,000 (probably a bit more in today's dollar). You will not find anything remotely similar in Jerusalem or Tel Aviv.

Of course a commute costs time. But an extra hour or two of babysitting is much, much cheaper than an extra $100,000 on your morgage. My dh commutes to the merkaz, and no it's not easy or cheap, but it's a whole lot easier and cheaper than paying another NIS 1,200 in rent each month for an apartment that's smaller than the one we have now.

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most young couples won't have the money in a few years to move so what they have when they get married is what they continue to live in for the next twenty years. Where in the world would they have money to save up? They use up their entire salary and more just to live and can't put away a penny. So where in the world could they think of moving to until they finish their first 20 year mortgage? That's about when they are past 40!

You're assuming that they won't have money to move because you're assuming that they'll buy right away and be paying a morgage right away. If they rent, especially if they rent a small, fourth-story walkup that would be inappropriate for an older couple with more children, they are much more likely to be able to save money towards a better place.

freidasima

Mon, Aug 25 2008, 5:09 pm

Ora, not every young couple wants to live in a yishuv. And if you are looking at a town or city, the prices are not cheap anywhere. Ramat Beit Shemesh is problematic for women who work in Tel Aviv, Ramat Gan, Petach Tikva etc. because the commute is hard. Childcare after the hour of about five becomes impossible pricewise. If you are working on a full time job let's say and earning between 4-5000 shekel, you would rather pay that extra 500 shekel a month to live near your job and not have the exhausting commute.

As for finding another badly paying job, from what I see with young people in the job market, the employment situation stinks for the first few years and the further away you are from major urban centers the fewer possibiltiies you have. Not every woman wants to be an ozeret legananet on a yishuv and not everyone can work from home. Most young religious women are social workers, teachers or secretaries and you sometimes have to take a job far away from your home.

Again, the problem isn't paying the mortgage, in the example I gave they are paying. The problem is that if you are paying that mortgage of X thousand a month you can't save. Let's say that you rent really cheap like a one room caravan somewhere on some moshav for five years. You are raising two children in one room, right? Not realistic. And you are paying 1500 shekel, going rate for a one room caravan on a moshav like Rantiya these days. So you are saving 1500 shekel a month instead of paying a 3000 mortgage? Take off another 300 to 500 shekel that you have to spend extra for commute and childcare time because you are living in eck velt far away from a job and in these places there are no jobs. So how much are you saving up? twelve thousand shekel a year? you know how long it will take you to save up a down payment for an apartment, let's say $60,000 for a tiny two bedroom apartment somewhere in eck velt? at that rate it will take you fifteen years!!! How long exactly can you live with four kids by then in a one room caravan?

In other words, the kids I know who married young and didn't have lots of parental help and great professions...have left the country. I know loads of them in NY and LA and San diego these days...welcome to New Izrael..

ora_43

Tue, Aug 26 2008, 8:31 am

freidasima wrote:

Beit Shemesh has a direct bus and train to Tel Aviv. It's one of the easiest commutes you could have. My dh often gets home before classmates who only need to commute to Rishon L'Tzion, because traffic within the city is so much worse than on the highway.

It's not an extra 500 shekel a month that we're talking about. If it was, then I would agree with you that it's easier to just live in the city. But it's much more than that. A studio apartment in Tel Aviv costs almost NIS 4,000/month these days. That's not even a nice studio in a nice neighborhood, just a regular, one-room apartment. I've compared apartments in Jerusalem, Beit Shemesh (not Ramat Beit Shemesh), and Ramat Gan recently, and the price difference between a place in Beit Shemesh and the other two was over NIS 1,000 a month. And Beit Shemesh is a large city--the price difference between here and a small yishuv is over NIS 1,000/month. So the difference between living in Tel Aviv and living in the Shomron is over NIS 2,000 a month--generally speaking, well worth the commute.

Daycare costs are also cheaper out of the city, by the way. Childcare in Jerusalem is was an extra 400 or 500 shekels more per month than in yishuvim near the city the last time I checked (2 years ago), and that was for the same hours and same toddler/ganenet ratio. So even if a woman has to pay an extra 30 shekels each day for a private babysitter between 5 and 6 pm, she's not necessarily losing money.

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As for finding another badly paying job, from what I see with young people in the job market, the employment situation stinks for the first few years and the further away you are from major urban centers the fewer possibiltiies you have. Not every woman wants to be an ozeret legananet on a yishuv and not everyone can work from home. Most young religious women are social workers, teachers or secretaries and you sometimes have to take a job far away from your home.

It's often easier to find work in an urban center, but unless you work as a lawyer, computer programmer, or some other job only found in the merkaz area, you can find a job elsewhere. A woman working as a social worker, teacher, or secretary would be mad to stay in an expensive area near the merkaz instead of finding a job in the Golan, Negev, or some other cheaper area. Her salary would drop somewhat leaving the Tel Aviv area, but housing is about 1/3 the price.

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Again, the problem isn't paying the mortgage, in the example I gave they are paying. The problem is that if you are paying that mortgage of X thousand a month you can't save.

That's what I said, no?

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Let's say that you rent really cheap like a one room caravan somewhere on some moshav for five years. You are raising two children in one room, right? Not realistic. And you are paying 1500 shekel, going rate for a one room caravan on a moshav like Rantiya these days. So you are saving 1500 shekel a month instead of paying a 3000 mortgage? Take off another 300 to 500 shekel that you have to spend extra for commute and childcare time because you are living in eck velt far away from a job and in these places there are no jobs. So how much are you saving up? twelve thousand shekel a year? you know how long it will take you to save up a down payment for an apartment, let's say $60,000 for a tiny two bedroom apartment somewhere in eck velt? at that rate it will take you fifteen years!!! How long exactly can you live with four kids by then in a one room caravan?

We weren't comparing a couple that can afford an apartment to one that can't. If you don't have money to buy, you rent instead, because what can you do?

But if you do have money to buy, buying an apartment appropriate for an older couple with several children right off the bat is not the best idea. For help proving my point, I turn to Yaad Gishur, who demonstrated this idea using the fictitious couples "Mishkanta" and "Savlanut," both in their mid-20s with the ability to spend NIS 3,000/month on rent and $50,000 in savings (or in this case, family help):

Mishpachat Mishkanta buys a $150,000 apartment right after the wedding. With $50,000 down, they take a 25-year morgage and pay NIS 3,000 a month. After 25 years, at age 50, they've paid $250,000 on the morgage + interest, and own a home worth $150,000.

Mishpachat Savlanut invests their $50,000 and gains $25,000 in interest over the course of the next eight years. In the meantime, they rent an apartment for NIS 2,000 a month, and put aside NIS 12,000 a year. After eight years they take their $75,000 (initial capital + interest) and the $25,000 they've saved and put down $100,000 on a $150,000 apartment, taking a $50,000 morgage. They pay the morgage off in eight years, at age 41, and save themselves the $100,000 in interest that Mishpachat Mishkanta ended up paying.

Renting has benefits beyond waiting to make a better down payment. A couple shouldn't have to decide at age 25 where they're going to be at age 45. If they have enough money that they could move if necessary, fine, but if they're going to be stuck wherever they buy their first apartment, it's better to rent for the first few years and then make an educated decision based on things like job market and family size.

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In other words, the kids I know who married young and didn't have lots of parental help and great professions...have left the country. I know loads of them in NY and LA and San diego these days...welcome to New Izrael..

The "kids" I know who married young without parental help have left the merkaz. They're living in Israel and doing fine.

freidasima

Tue, Aug 26 2008, 11:25 am

You obviously have never tried to get a job as a social worker or teacher these days if you think that you can find a job like that in the golan or galil or negev etc.

They don't exist. The municipalities are broke. Forget it. You can get jobs in companies that take care of filipinim (agencies) and most of those are in the mercaz or Jerusalem or Haifa.

You bring the example of a studio apartment in Tel Aviv. who in the world can afford that? Do you know of any religious young couples who live rented there? I don't know of one, or even one in the center of Jerusalem unless they have money or a family apartment. They live in Shtern in Kiriyat Yovel, or they live in Ramat Amidar in Ramat Gan or in the tachana mercazit area of Petach tikva. Then their commute is an hour shorter than from ramat Beit shemesh. Other things like you mention, child care etc. are the same as in ramat beit shemesh as we are talking about the cheap slummy areas etc. This isn't the center of Tel Aviv or Jerusalem.

As for investing $50,000, it has been proven over and over that in EY the best investment is an apartment, just look at the shabbat edition of the marker about the prices of apartments in the past 3 years, whether bought for buying or to rent out. Nothing, but nothing appreciated like apartments in various areas. If you invest $50,000 in anything that isn't speculative, the going rate is between 1-2% interest. How long will you wait to see a return of $25,000 on your $50,000? More like 80 years, not 8...

There is a reason that people bankrupt themselves to buy an apartment and are still doing it...

And btw, I don't know too many young people who have any wedding present money. At religious weddings most of the guests give gifts and most of the gifts are cheap and lousy. And if it is a big wedding and there are checks, the checks go to pay for the wedding! If you are helping your children by giving an down payment on an apartment you can't afford to make a big wedding for them, hence if they want a big wedding, and most do, they have to cover it with the money...and unfortunately the checks are few and far between among the religious....