Buying a Condo vs Renting?

[stoopidmonkeycatdog]

---

Members do not see this ad.

So i'm lucky enough to A.) Be accepted to the school in the city where i already resided, and B.) have a SO who is going to be employed in a pretty decent income job (starts at around 60-70).

We were wondering if it would be a better idea to buy a condo vs rent an apartment. The thinking was the area in which we are in has experienced incredible growth in home prices over the past several years, and it is projected to continue to see growth as more and more jobs are coming into the area. Rent near my school is already pricey, so i was thinking that perhaps purchasing a condo would be the better investment for us long-term.

We plan to be here for the next several years, since like i said this is where we grew up, so i think we would stay long enough to make it worth while (usually four years i believe?)

Anyone else considering buying a home?

 

[predental21250]

So i'm lucky enough to A.) Be accepted to the school in the city where i already resided, and B.) have a SO who is going to be employed in a pretty decent income job (starts at around 60-70).

We were wondering if it would be a better idea to buy a condo vs rent an apartment. The thinking was the area in which we are in has experienced incredible growth in home prices over the past several years, and it is projected to continue to see growth as more and more jobs are coming into the area. Rent near my school is already pricey, so i was thinking that perhaps purchasing a condo would be the better investment for us long-term.

We plan to be here for the next several years, since like i said this is where we grew up, so i think we would stay long enough to make it worth while (usually four years i believe?)

Anyone else considering buying a home?

I think you're in a situation that is different than most people. My father and I have begun investing in property, and I think there's some serious cash to be made in that market of the economy. If you think you're getting a good deal, I would definitely go for it.

 

[Kareful]

Do you plan to do residency? How much do you have saved to put money down? How reliable is this growth you project? I have heard that for buying property the minimum time you should live there is 5 years. Though, I've also been told to rent until you cannot afford to rent anymore, as the cost of all the time you invest into managing this property really eats into the time you are able to invest in other areas. You just got to do the math (right?). That is, do you think that the money spent renting (money that you would never see again) would be significant to where you would have no problem buying a place you might have trouble selling? I've always thought about buying, as I dislike never seeing return on investments, though, I caved and already signed a lease for a place when I start dental school.

 

[Faefly]

I am no expert, but I suggest you buy a condo, it makes no sense, paying rent for something that is not yours. You can rent the condo or sell it later on provided the place is worth renting or selling, I mean if the area is getting popular, then by all means, do it.

 

[CastleBravo7]

I am looking into this option as well since my acceptance. Any input would definitely be appreciated.

I have been looking at it this way. I'm a non traditional applicant that is changing careers. The rent prices have been rising tremendously across the nation since the recession because not a lot of people can purchase a house with all the new down payment rules and mortgage standards. I can't stand throwing the money away when I can at least try to invest it in real estate. I would like to buy a condo or small town home as well since the city I am looking at has a high probability of resell/constant demand after my 4 years of school.

Renting would be throwing away around 60 to 70k, increasing with inflation. Yes, you don't have to deal with any maintenance fees or taxes, but that amount of money most likely would appreciate if you buy something that is up to modern code and appeals to the mass public.

Buying allows for investment and you to build equity. Even if you used your borrowed living expenses from the government for payments, you would keep that money and not see it fly out the window. The only cons I have been anticipating is the initial buy with down payment and closing costs. Along with maintenance costs and upkeep, I don't see that to be much of issue if you are handy and can just save a little in a slush fund for any emergencies. Taxes/HOA fees would be the worst thing to deal with IMO depending on the location. If you decide to move later on after school, the property can be sold or rented out, so there is your investment doing work for you. You regain your equity in the current economy and maybe make a decent profit in the end. So in the end, you keep that 70k (not renting) in equity and have options to how you want to use it. Pay off your dental school loans, invest it in another property, collateral for your future practice, etc.

There are definitely other topics that can be discussed to influence a decision, but all in all, I think buying a condo can definitely be a smart move.

 

[stoopidmonkeycatdog]

I think you're in a situation that is different than most people. My father and I have begun investing in property, and I think there's some serious cash to be made in that market of the economy. If you think you're getting a good deal, I would definitely go for it.

I definitely think there's some cash to be made, i wish i had more money to spend, but i could probably only afford one property for now, so i'm looking at it more of a tiny investment/nice living arrangement for school!

Do you plan to do residency? How much do you have saved to put money down? How reliable is this growth you project? I have heard that for buying property the minimum time you should live there is 5 years. Though, I've also been told to rent until you cannot afford to rent anymore, as the cost of all the time you invest into managing this property really eats into the time you are able to invest in other areas. You just got to do the math (right?). That is, do you think that the money spent renting (money that you would never see again) would be significant to where you would have no problem buying a place you might have trouble selling? I've always thought about buying, as I dislike never seeing return on investments, though, I caved and already signed a lease for a place when I start dental school.

As of now i have absolutely no plans to specialize. If i do decide to specialize it would be 2 year Peds. The area is Dallas (no secret since i'm going to A&M) i'm no expert, but i don't think the ridiculous growth we have seen recently will continue, but i do think there will be a consistent decent growth in our market, and projections seem to say the same thing. Rent is pretty pricey here so i'd just be throwing away over 60k over the next four years anyways.

I am no expert, but I suggest you buy a condo, it makes no sense, paying rent for something that is not yours. You can rent the condo or sell it later on provided the place is worth renting or selling, I mean if the area is getting popular, then by all means, do it.

This is what i'm thinking, and the area near my school has been on the uptick for recent years.

I am looking into this option as well since my acceptance. Any input would definitely be appreciated.

I have been looking at it this way. I'm a non traditional applicant that is changing careers. The rent prices have been rising tremendously across the nation since the recession because not a lot of people can purchase a house with all the new down payment rules and mortgage standards. I can't stand throwing the money away when I can at least try to invest it in real estate. I would like to buy a condo or small town home as well since the city I am looking at has a high probability of resell/constant demand after my 4 years of school.

Renting would be throwing away around 60 to 70k, increasing with inflation. Yes, you don't have to deal with any maintenance fees or taxes, but that amount of money most likely would appreciate if you buy something that is up to modern code and appeals to the mass public.

Buying allows for investment and you to build equity. Even if you used your borrowed living expenses from the government for payments, you would keep that money and not see it fly out the window. The only cons I have been anticipating is the initial buy with down payment and closing costs. Along with maintenance costs and upkeep, I don't see that to be much of issue if you are handy and can just save a little in a slush fund for any emergencies. Taxes/HOA fees would be the worst thing to deal with IMO depending on the location. If you decide to move later on after school, the property can be sold or rented out, so there is your investment doing work for you. You regain your equity in the current economy and maybe make a decent profit in the end. So in the end, you keep that 70k (not renting) in equity and have options to how you want to use it. Pay off your dental school loans, invest it in another property, collateral for your future practice, etc.

There are definitely other topics that can be discussed to influence a decision, but all in all, I think buying a condo can definitely be a smart move.

Interesting, i appreciate your comment!

 

[Faefly]

I am looking into this option as well since my acceptance. Any input would definitely be appreciated.

I have been looking at it this way. I'm a non traditional applicant that is changing careers. The rent prices have been rising tremendously across the nation since the recession because not a lot of people can purchase a house with all the new down payment rules and mortgage standards. I can't stand throwing the money away when I can at least try to invest it in real estate. I would like to buy a condo or small town home as well since the city I am looking at has a high probability of resell/constant demand after my 4 years of school.

Renting would be throwing away around 60 to 70k, increasing with inflation. Yes, you don't have to deal with any maintenance fees or taxes, but that amount of money most likely would appreciate if you buy something that is up to modern code and appeals to the mass public.

Buying allows for investment and you to build equity. Even if you used your borrowed living expenses from the government for payments, you would keep that money and not see it fly out the window. The only cons I have been anticipating is the initial buy with down payment and closing costs. Along with maintenance costs and upkeep, I don't see that to be much of issue if you are handy and can just save a little in a slush fund for any emergencies. Taxes/HOA fees would be the worst thing to deal with IMO depending on the location. If you decide to move later on after school, the property can be sold or rented out, so there is your investment doing work for you. You regain your equity in the current economy and maybe make a decent profit in the end. So in the end, you keep that 70k (not renting) in equity and have options to how you want to use it. Pay off your dental school loans, invest it in another property, collateral for your future practice, etc.

There are definitely other topics that can be discussed to influence a decision, but all in all, I think buying a condo can definitely be a smart move.

Nice way of thinking, I also think, if you are still single or not parent yet, you can rent another room of your condo to a fellow student or something which will be like, you not paying anything or hardly anything, and it will be your terms, like no pets or no parties etc.

 

[Kareful]

Survey says: yes!

 

[C_BryantDDS]

I had a similar thought process and decided to purchase a condo - the closing is in April! I had done the math and figured that in the area I wanted to live I'd spend approximately $72,000 on rent over 4 years and I had a hard time just throwing that away. Including association fees and taxes my monthly mortgage payment will be a little less than rent and I'll have at least $18,000 in equity at the end of the four years and hope to either make money selling it (I'm planning on doing a few improvements to increase the resale value) or renting it out. I'll have a much nicer and larger living space, no pet fees, no increases in rent, and will have something to show for it at the end of the 4+ years! Definitely something to look into!

 

[stoopidmonkeycatdog]

I had a similar thought process and decided to purchase a condo - the closing is in April! I had done the math and figured that in the area I wanted to live I'd spend approximately $72,000 on rent over 4 years and I had a hard time just throwing that away. Including association fees and taxes my monthly mortgage payment will be a little less than rent and I'll have at least $18,000 in equity at the end of the four years and hope to either make money selling it (I'm planning on doing a few improvements to increase the resale value) or renting it out. I'll have a much nicer and larger living space, no pet fees, no increases in rent, and will have something to show for it at the end of the 4+ years! Definitely something to look into!

Would you mind giving us some information on how you went about purchasing? Any additional info is helpful!

 

[C_BryantDDS]

Would you mind giving us some information on how you went about purchasing? Any additional info is helpful!

Do you have any particular questions?

 

[stoopidmonkeycatdog]

Do you have any particular questions?

Well i do, and some may be too personal so feel free to pick and choose which to answer.

1.) What price range did you look at and select? I'm debating between a few and unsure which is reasonable.

2.) When looking what did you prioritize about different properties? I know in my city parking is a big one, but i'm just curious what set them apart.

3.) How much were your closing costs? and HOA?

4.) What % did you put down and what sort of mortgage did you get?

I have a few more but i think they're kind of redundant

 

[stoopidmonkeycatdog]

Do you have any particular questions?

Also, how did you qualify for your mortgage?

 

[BTR1208]

Very similar situation here... I live currently about an hour away from the school I will be attending. My fiancee and I already own a home here. We are renting out this one and buying another house in the schools location. From that rent money we will be able to pay both mortgages.

We bought about a year and a half ago and it has been soooo much better than renting. Definitely buy if you can.

After dental school we plan on keeping both houses and renting them out. Make your money work for you. The idea is to let someone else pay off your mortgage and also be making some good side cash flow. We have put enough down that we profit $500-600 a month from the houses once rented.

PM me if you need any advice or have any questions.

 

[C_BryantDDS]

Well i do, and some may be too personal so feel free to pick and choose which to answer.

1.) What price range did you look at and select? I'm debating between a few and unsure which is reasonable.

2.) When looking what did you prioritize about different properties? I know in my city parking is a big one, but i'm just curious what set them apart.

3.) How much were your closing costs? and HOA?

4.) What % did you put down and what sort of mortgage did you get?

I have a few more but i think they're kind of redundant

I wanted to keep it under $200,000 because I didn't feel comfortable spending more than that on a condo (as opposed to a house) and the one I went with was $169,000 for 1 bedroom and 1 bathroom and around 1,100 sq ft.
I looked at a few different areas and there was only one available in the area that I wanted to be in (safe and 11 min from school) so that decision was fairly easy and luckily it was one that had everything I wanted - hardwood floors, fireplace, screened in patio, assigned parking space, building security, and is in great condition but there are some minor cosmetic improvements to be made such as new paint, new carpet, staining the patio, new appliances, etc. I wanted one with the potential for minor and cosmetic improvements so I could make these updates over the next 4+ years and hopefully sell it for more.
The monthly HOA fees are around $300 and I believe taxes are about $250 a month. Including the mortgage it's going to be around $1,200 a month. Apartments in the same area were going for around $1,400 a month plus trash collection fees and pet fees for a much smaller space. The closing costs are around $3,000.
I'm putting 10% down and did a conventional 5 year ARM.
I would do some research to figure out what area you want to be in and what condos are going for in that area and make a list of things you want and don't want in a condo. That should help you narrow it down a bit. It would be worthwhile to also go ahead and talk to a mortgage advisor to find out what you can afford and get a preapproval letter and then talk to a real estate agent to find out what the market is like and what they're projecting for future growth/development in the area and resale value.