You think you have a problem, my American friend?
Few years ago I was helping my parents to go through the selling-old-and-big-house and buying new-but-smaller-house procedure. I spare you horryfing details about dealing with the banks and buyers during the time when banks were frikin' paranoid due to widespread european finacial crisis. I finally, we managed to close the deal on the nice, cosy cottage, pretty old (build in 1920-something), but just recently completely refurbished and with nice, spacious garden. It was also located just a few kilometers from the place when I live, in small village. Everybody happy. The only flaw was a lack of garage (old house, remember?), but with the extra money we got from the deal and lot of space on the yard my dad decided to build one. The construction team arrived, dig their spades into a ground and... dig out an UXO - bloody pile of rusted mortar ammo from 2nd WW. My dad make a kinda panic phone call and quickly the whole street was closed by a police and bomb squad. The sappers spend half a day, removing the unexploded crap from my parents front yard.
And after they finally left, the old guy from the house next to my parents comes in and had a chat with my dad. As it turns out, in 1945 Germans and Russians were fighting for weeks over the road next to the village and the hill that was overlooking it. The road was the last major one in that area under the German control and hence the only way for fleeing German soldiers (and civilians) to escape from the advancing Russians, and on the hill was a massive vantage point for german arty. So Germans were determined to defend it to the last man and Russians want to capture it for all cost. They were mercilessly shelling each other and lot of stuff landed in and around the village. Old guy told my dad that almost everyone here is digging out some "decaying rusty things" in their garden on regular basis, and just don't bother much with this - "Just bury them back, you know, and remember do not plant anything that require diggin' a deep hole in this point. Not a big deal, I'm telling ya'!".
So, my parents are now living in the nice, quiet and cosy place, which under the surface is most probably stuffed with "decaying rusty things" that were ment to make a big "kaboom!" 70 years ago...

Man first off, congrats, sounds like you got a nice place. Secondly, don't worry about it so much, and I say that because the market is definitely improving all across the US. You probably have equity in your rentals, so if they go empty you can sell them and liquidate some assets, which will help you cover your mortgage on your new house.

It sounds like you got a great bargain. I live in one of the more expensive parts of Canada, my house, which was brand new cost me $325 000 (and I bought it when the US and Canadian dollars were at par). It's 1300 sq ft with a detached garage, it's small and pricey, but great value for my city. I regularly vacation to Coeur d'Alene, ID and now that my house down there would be about 150k. Pretty painful to think about, especially when you add in the fact that the cost of living is about 4X where I live compared to most places in the US.

You've got it good and it sounds like you make some solid financial decisions, all the best and good luck.

Wow. You wouldn't get even one-room flat in Prague for that price. Pretty awesome deal.

I am terrified of mortgages myself because haven't had any debt and I was raised one shouldn't live in one. I guess you should just sit with your partner and talk things through. Realistically evaluate all angles. I am sure you will make good decision in the end.

Shouldn´t the house-prices in US be much lower, as that whole housing bubble was a big part of the financial crysis?
Or didn´t the prices drop extremly low in your region? Or did they extremly rise again?
Edit:
OK, haven´t read this before. It´s actually a very low price compared to the situation in other countries...

Most of the US has recovered pretty significantly, and in some cases prices are back to or even above pre-2007 levels.

The housing price crash was very fragmented throughout the country. Around here - and areas like this - they barely budged, while other areas got clobbered. Our local recovery is more a case of sales volume and not so much a matter of price.

Don't get into debt and buy it with cash. It's worth it vs taking out a mortgage even though it takes longer but you'll be glad you waited.

Make sure you're happy with the area and that you get everything right the first time, like no carpets ftw! if that's your thing (at least in non-living rooms/dens) and space allocations for any equipment/office/gym stuff. If you're unsure, don't commit to something that would be difficult to maintain/clean/move/change out later.

And das about it. ^^

Indeed and it's easier to hang onto decent tenants.

I had similar feelings through my process of buying ($110k; Pittsburgh) a couple years ago. I still have them as I find more places in need of repair I never noticed before. All-in-all, I generally think it's been a positive experience, though.

I'm closing on property at the same time as OP. Check out the new Mojo Dojo! :) Hopefully I'll be picking up a few more of these in the near future. I wish you the best of luck with the investment/rentals and may they stayed occupied with respectful tenants. :)

What the hell is the OP talking about? Buying at home is very easy - I do it all the time when I buy stuff from GoG! :-)

I think best long term investment (long means min 20 years) is stock market. See: Stocks For the Long Run (Jeremy J. Siegel). Excellent book. Nothing beats stocks in the longrun and its true for all the historical 20 year periods. Also stocks have no maintenance costs like homes.

Ha! Try that in this country... We bought a small '3 bedroom' (really 2 + a study downstairs) detached house 3 years ago. It was originally listed for £285,000 - or about $480,000 - but we got it for £240k. Not a sum of money I, or indeed most people, have lying around without borrowing it. A house for $50k? Fuck it, I'd buy the street.

In Australia i have a general rule that i tell people about buying a house and that is you should not borrow more money than you can afford if interest rates were at 10%. In America that would probably translate to about 7%? Remember, Just because interest rates are low now, when it comes to mortgages, you have to look at the bigger picture.

It is harder to sell a house when interest rates are going up, so if that happens and you realize you can no longer afford the mortgage, then your looking at some big losses. But if you think your getting a very good price now, that should go a long way to mitigating any losses if you do have to sell later on.