Just turned 26 and need to move out. Stashed away a ton of savings and am looking to make a move. Condo would leave me little disposable income but would be a good investment long term. Apartment gives me more flexibility and freedom, but $ is pissed away. Thoughts from the rvf wise?
Condo vs Apartment
how big condo/apprt? how much $ for appart rent? down payment on condo plus morgage will be how much $$$ ???
In order to answer the question you really need to do the math. Saying that renting is pissing away your money is really too simple. Even when you own, there's still money that you're not goin to recover. You have a condo fee and the early years of a mortgage are almost all interest.
There's two things to consider. One, what are rents like versus housing prices where you live? If rents are really high, then buying might be the way to go. The second thing to consider is what the opportunity cost of your savings is. If there is something that you could be doing with your cash that will give you give you higher return than property or that you value more, like traveling, then renting may be the right way to go.
There's two things to consider. One, what are rents like versus housing prices where you live? If rents are really high, then buying might be the way to go. The second thing to consider is what the opportunity cost of your savings is. If there is something that you could be doing with your cash that will give you give you higher return than property or that you value more, like traveling, then renting may be the right way to go.
Rent rates are very high in my area for 1 bedrooms. Looking at 2 bd/2 bath condos with the intent of renting one room out in the future.
Get a cheap apartment, that's not pissing money away that's having a place of your own while you decide where you want to live! Which country? What you want to do with your life and career. Condo ties you down to one location, plus, if you have plumbing issues, heater issues, guess who pays? YOU! If you are renting, Landlord has to fix it, no cost to you!
Are you willing to sit down, make a plan and follow it?
If not, an apt is the way to go. Winging it on buying will leave to much to chance.
#1 thing to find out is what is going on in your local real estate market. Is it depressed, appreciating or just limping along.
Next, what is the economy like for the area and then the state and what is the outlook. A good economy helps keep housing prices stable and appreciate.
This will help you get a gauge on where housing prices will be in 5, 7, 10 years. Remember when you buy a property that cash is not liquid, it takes time to sell and it takes money to sell so the property needs to appreciate by ~5% for you to break even. Or you need to buy the property at a discount.
If you have a good job, will be in the area for the next few years, the real estate market is decent to good then yeah it may be a good thing to buy. Crunch the numbers, down payment, monthly payment, taxes, insurance, rent from roommate vs apt rent.
Most likely you will have to hang onto it for a few years to make money. Buy and hold if you can. Make it a rental down the line when you move up or out. Then you can 1031 exchange it into something bigger, a 4 plex for example and work on cash flow for yourself.
If not, an apt is the way to go. Winging it on buying will leave to much to chance.
#1 thing to find out is what is going on in your local real estate market. Is it depressed, appreciating or just limping along.
Next, what is the economy like for the area and then the state and what is the outlook. A good economy helps keep housing prices stable and appreciate.
This will help you get a gauge on where housing prices will be in 5, 7, 10 years. Remember when you buy a property that cash is not liquid, it takes time to sell and it takes money to sell so the property needs to appreciate by ~5% for you to break even. Or you need to buy the property at a discount.
If you have a good job, will be in the area for the next few years, the real estate market is decent to good then yeah it may be a good thing to buy. Crunch the numbers, down payment, monthly payment, taxes, insurance, rent from roommate vs apt rent.
Most likely you will have to hang onto it for a few years to make money. Buy and hold if you can. Make it a rental down the line when you move up or out. Then you can 1031 exchange it into something bigger, a 4 plex for example and work on cash flow for yourself.
I'm a slob when I rent. Have to own in order to feel swanky, be able to fix place up, etc.
You piss away money when you buy too (electricity, gas, property taxes, maintenance, water, mortgage interest). I know someone who got out in time just as a special assessment was passed that would cost each owner $$$--though obviously this is probably rare. After living in a condo for quite a while I made gains to the point I pretty much lived for free--though obviously you go try to buy and everything else has gone up as well. My housing costs were very low and I lived in the middle of it all, a few hundred under $1,000/month (no parking spot...got rid of it at the start). That was my first place and I wanted to go in small into an older entry-level type of place, I'm kicking myself for not going in much bigger. Granted assuming the value will go up is a gamble.
Rent a Condo. Problem solved.
IMO buying RE if your a young playboy is a bad idea. Your not 100% for sure going to make any money so toss the idea of it being an " investment " out the window. Go invest in equities and funds if your trying to invest, not a house as those days are gone, plus it keeps you static in a area. Yes you can own and travel an stuff still by its still a bill and liability you have to take care of while a renter can flush out the lease and bounce.
If apartment rent rates are higher then something may be off in the buyers market. If people can't or do not want to get into the market it is signs of issues that are present with it so make sure due diligence is done if your still set on buying.
Renting a Condo gives you the best of both worlds as you get he building perks for general the same cost as rent would. Condo fees are not you problem and neither is maintenance. The Condo owner carries all the risk while you get all the perk. If you outside the purchase listings and go after sellers whom are having a hard time moving their units for whatever reason then you can easily exploit them to get a good rent. It might be a bit shaky as the house is still listed but signing a shoe term seasonal lease will give you some stability or enter in costs that of the seller does get it sold and can't honor the terms then YOU get a packages when you leave not them.
Lastly the idea of "pissing money away" on rent is a wise man myth created by RE agents. You need basics to live: food, shelter, clothing. I literally shit away food but I am not crying that it is some how a waste of money. Shelter is needed to live so it is simply just a cost just like food. To approach this cost the smart way just make sure your choices are no more then 30% of what you make. Anything more and you are over your head, and it would be like you eating Prime Rib each day when you can only afford ground beef.
IMO buying RE if your a young playboy is a bad idea. Your not 100% for sure going to make any money so toss the idea of it being an " investment " out the window. Go invest in equities and funds if your trying to invest, not a house as those days are gone, plus it keeps you static in a area. Yes you can own and travel an stuff still by its still a bill and liability you have to take care of while a renter can flush out the lease and bounce.
If apartment rent rates are higher then something may be off in the buyers market. If people can't or do not want to get into the market it is signs of issues that are present with it so make sure due diligence is done if your still set on buying.
Renting a Condo gives you the best of both worlds as you get he building perks for general the same cost as rent would. Condo fees are not you problem and neither is maintenance. The Condo owner carries all the risk while you get all the perk. If you outside the purchase listings and go after sellers whom are having a hard time moving their units for whatever reason then you can easily exploit them to get a good rent. It might be a bit shaky as the house is still listed but signing a shoe term seasonal lease will give you some stability or enter in costs that of the seller does get it sold and can't honor the terms then YOU get a packages when you leave not them.
Lastly the idea of "pissing money away" on rent is a wise man myth created by RE agents. You need basics to live: food, shelter, clothing. I literally shit away food but I am not crying that it is some how a waste of money. Shelter is needed to live so it is simply just a cost just like food. To approach this cost the smart way just make sure your choices are no more then 30% of what you make. Anything more and you are over your head, and it would be like you eating Prime Rib each day when you can only afford ground beef.
Simple formula for you to determine whether to rent or buy.
Take 2 properties that are very comparable and add up all costs associated with owning vs renting the same property. If the costs of owning a property are only 10-15% more then buy the property. Nothing wrong with paying a small premium for owning the property. But if the costs exceed 15% more than renting than rent the property.
Be sure to include taxes, insurance, utilites and condo fees in the cost analysis.
Take 2 properties that are very comparable and add up all costs associated with owning vs renting the same property. If the costs of owning a property are only 10-15% more then buy the property. Nothing wrong with paying a small premium for owning the property. But if the costs exceed 15% more than renting than rent the property.
Be sure to include taxes, insurance, utilites and condo fees in the cost analysis.
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Quote: (03-11-2013 08:39 PM)Balkanite Wrote:
Condo would leave me little disposable income
An apartment pisses away rent. But a condo pisses away mortgage interest plus condo fees and maintenance. It also has property taxes and a mortgage interest tax deduction. Do the math carefully!
Theoretically the cost to own and rent should be similar. But depending on the city and supply/demand, they may diverge. The big factor is capital appreciation. In a hot real estate market, you can almost guarantee price appreciation. If moving expenses are not a big deal, then I wonder whether you really think you can buy cheaper this year than next year. If not, then why the rush? You could rent for a while and wait for an ideal buying opportunity.
I guess I'm really questioning your quality comparison. Yes, a condo may seem nicer. But if it is more expensive then it isn't a fair comparison. I think you are saying that the capital appreciation makes it cheaper long-run (for the same quality), but leaves you illiquid. Tough call.
The other issue is control. A condo will let you install a hot tub, French doors, and a stripper pole. A house lets you host noisy parties and install a pool. If you really need this then you might be willing to overpay relative to an apartment.
What area are you based out of OP?
Necro bump.
I have the opportunity to buy a newly built condo. It's expected to be finished 3rd/4th quarter of 2018. It's fixed price so it's first come first served, which is why it's exciting.
Area:
- Small town located 30 minutes between 2 big cities
- Walking distance to schools, supermarkets, communications etc.
- Beautiful nature and great opportunities for outdoors recreation
The apartment (from what I know so far):
- 1 bedroom, 48 square meters of open-plan living area
- Great view
- Fully equipped with appliances, floor heating in bathroom, overall quality material
Once again, pristine condition. The real estate market has appreciated around 10-15% in the area the last 1,5 years. Lots of new building projects are ongoing or planned right now, not only apartments but also industry/business. The investors of the condos have ties to the area themselves since 150 years, run a successful business and seem to plan/invest in the area long term. The contractors are serious and don't fuck around from what I know.
If I were to buy, it would eat up all of my current savings (saving in index funds and stocks right now) for the downpayment.
Negatives:
- House market crash
- Rent hikes
- Being tied down (perhaps the biggest factor for me; on the other hand, with a cool community organization I could rent it out)
- ???
Would appreciate input from more experienced members. Since I'm an optimist it feels like I'm mostly seeing positives here, and also feeling the dopamine rush at the thought of actually "owning" my first apartment. I'm young, dumb and full of cum and thus should not rush into anything like this without thinking carefully.
I have the opportunity to buy a newly built condo. It's expected to be finished 3rd/4th quarter of 2018. It's fixed price so it's first come first served, which is why it's exciting.
Area:
- Small town located 30 minutes between 2 big cities
- Walking distance to schools, supermarkets, communications etc.
- Beautiful nature and great opportunities for outdoors recreation
The apartment (from what I know so far):
- 1 bedroom, 48 square meters of open-plan living area
- Great view
- Fully equipped with appliances, floor heating in bathroom, overall quality material
Once again, pristine condition. The real estate market has appreciated around 10-15% in the area the last 1,5 years. Lots of new building projects are ongoing or planned right now, not only apartments but also industry/business. The investors of the condos have ties to the area themselves since 150 years, run a successful business and seem to plan/invest in the area long term. The contractors are serious and don't fuck around from what I know.
If I were to buy, it would eat up all of my current savings (saving in index funds and stocks right now) for the downpayment.
Negatives:
- House market crash
- Rent hikes
- Being tied down (perhaps the biggest factor for me; on the other hand, with a cool community organization I could rent it out)
- ???
Would appreciate input from more experienced members. Since I'm an optimist it feels like I'm mostly seeing positives here, and also feeling the dopamine rush at the thought of actually "owning" my first apartment. I'm young, dumb and full of cum and thus should not rush into anything like this without thinking carefully.
Quote: (05-08-2017 01:03 PM)DarianFrey Wrote:
Necro bump.
I have the opportunity to buy a newly built condo. It's expected to be finished 3rd/4th quarter of 2018. It's fixed price so it's first come first served, which is why it's exciting.
Area:
- Small town located 30 minutes between 2 big cities
- Walking distance to schools, supermarkets, communications etc.
- Beautiful nature and great opportunities for outdoors recreation
The apartment (from what I know so far):
- 1 bedroom, 48 square meters of open-plan living area
- Great view
- Fully equipped with appliances, floor heating in bathroom, overall quality material
Once again, pristine condition. The real estate market has appreciated around 10-15% in the area the last 1,5 years. Lots of new building projects are ongoing or planned right now, not only apartments but also industry/business. The investors of the condos have ties to the area themselves since 150 years, run a successful business and seem to plan/invest in the area long term. The contractors are serious and don't fuck around from what I know.
If I were to buy, it would eat up all of my current savings (saving in index funds and stocks right now) for the downpayment.
Negatives:
- House market crash
- Rent hikes
- Being tied down (perhaps the biggest factor for me; on the other hand, with a cool community organization I could rent it out)
- ???
Would appreciate input from more experienced members. Since I'm an optimist it feels like I'm mostly seeing positives here, and also feeling the dopamine rush at the thought of actually "owning" my first apartment. I'm young, dumb and full of cum and thus should not rush into anything like this without thinking carefully.
I don't think you've done enough research. I know you've looked into a lot of details, but very little into the financials. A couple things that stand out to me:
1. Fixed price / first come first serve - This sounds like a sales-tactic to me, not a positive aspect. If you're taking a "fixed price" as true, you're likely already the not getting the best deal as nearly everything is negotiable. You also list "pristine condition" as if that's a reason to buy. ANY new place should be in pristine condition, it just got built!
2. 1-bedroom, already a poor choice for renting it out if you need to as well as for resale value.
3. Have you researched rental rates in the area vs. home buying costs?
Have you found out exactly what you'd pay in homeowner's association fees, property taxes, utilities, etc... in the area?
If you haven't done any of that you're not even close to having the information laid out in order to make an informed decision.
I'd start reading as much as you can about the topic and informing yourself. Here's a quick read that can get you started:
http://www.financialsamurai.com/three-ho...to-follow/
http://www.cnbc.com/id/40458216
http://twocents.lifehacker.com/all-the-h...1758138500
NOTE: I'm not discouraging you from buying a home in general, but you have to look at ALL the factors/details. Only then can you determine whether it's going to be a good buy or not.
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AneroidOcean, you raise good points.
I have fees, taxes and utilities cost down. They're all put together in a monthly fee like in many homeowner associations where I am (Sweden). They add up to 370$ per month; that's including everything. On top of that I'd pay a mortgage of 420$ per month (aggressively amortizing because of new Swedish laws).
I'm currently renting a nice studio apartment in a central location in this town for 370$. 1 bedrooms in my and the target area range between 450 to roughly 800$.
I'd be able to deduct the mortgage rate from my taxes.
The condo's cost would obviously be bigger than my current expenses, but I can bear it without too much hassle. It would be more and less freedom at the same time; more responsibility (anything breaks it's on me) but also more potential benefit.
But, the prospect of tying myself to a place is what gives me pause.
Thank you for the links! Nice reading tonight![[Image: wink.gif]](https://rooshvforum.network/images/smilies/wink.gif)
I have fees, taxes and utilities cost down. They're all put together in a monthly fee like in many homeowner associations where I am (Sweden). They add up to 370$ per month; that's including everything. On top of that I'd pay a mortgage of 420$ per month (aggressively amortizing because of new Swedish laws).
I'm currently renting a nice studio apartment in a central location in this town for 370$. 1 bedrooms in my and the target area range between 450 to roughly 800$.
I'd be able to deduct the mortgage rate from my taxes.
The condo's cost would obviously be bigger than my current expenses, but I can bear it without too much hassle. It would be more and less freedom at the same time; more responsibility (anything breaks it's on me) but also more potential benefit.
But, the prospect of tying myself to a place is what gives me pause.
Thank you for the links! Nice reading tonight
Quote: (05-08-2017 01:03 PM)DarianFrey Wrote:
Necro bump.
I have the opportunity to buy a newly built condo. It's expected to be finished 3rd/4th quarter of 2018. It's fixed price so it's first come first served, which is why it's exciting.
Area:
- Small town located 30 minutes between 2 big cities
- Walking distance to schools, supermarkets, communications etc.
- Beautiful nature and great opportunities for outdoors recreation
The apartment (from what I know so far):
- 1 bedroom, 48 square meters of open-plan living area
- Great view
- Fully equipped with appliances, floor heating in bathroom, overall quality material
Once again, pristine condition. The real estate market has appreciated around 10-15% in the area the last 1,5 years. Lots of new building projects are ongoing or planned right now, not only apartments but also industry/business. The investors of the condos have ties to the area themselves since 150 years, run a successful business and seem to plan/invest in the area long term. The contractors are serious and don't fuck around from what I know.
If I were to buy, it would eat up all of my current savings (saving in index funds and stocks right now) for the downpayment.
Negatives:
- House market crash
- Rent hikes
- Being tied down (perhaps the biggest factor for me; on the other hand, with a cool community organization I could rent it out)
- ???
Would appreciate input from more experienced members. Since I'm an optimist it feels like I'm mostly seeing positives here, and also feeling the dopamine rush at the thought of actually "owning" my first apartment. I'm young, dumb and full of cum and thus should not rush into anything like this without thinking carefully.
If you also were thinking about airbnb, pay careful attention to the Condo contract if this is allowed. Some condos don't allow things like airbnb.
The lease vs buy is financially a pretty simple decision. You take the present value of all the lease payments and compare that to the present value of outright buying plus the associated costs.
How likely are you to want to travel, relocate for a job, etc in the next 5 years? If chance is under 20% buy a condo. One thing to add condo's tend not to appreciate as much as a house or townhouse and have somewhat of a more limited audience since many families would prefer a SFH or TH.
If it's in a hot urban area condo is great, if your in a suburb I'd go with townhouse, as far as leaving yourself open to renting or even selling down the road TH appeals to singles as well as families.
My other recommendation is buy a 2 or 3 bedroom. Cost difference will probably be minimal ie 1 bedroom 100k, 2 bedroom 120k. Get a buddy to rent out a spare room from you for say $400 to $600 per month and that will cover a good portion of your mortgage or maybe the association fee. On that note watch out for association fees not tax deductable adn they can be insanely high.
If it's in a hot urban area condo is great, if your in a suburb I'd go with townhouse, as far as leaving yourself open to renting or even selling down the road TH appeals to singles as well as families.
My other recommendation is buy a 2 or 3 bedroom. Cost difference will probably be minimal ie 1 bedroom 100k, 2 bedroom 120k. Get a buddy to rent out a spare room from you for say $400 to $600 per month and that will cover a good portion of your mortgage or maybe the association fee. On that note watch out for association fees not tax deductable adn they can be insanely high.
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