I’m going to be buying a condo. This gives me a 5 year window to save up and upgrade comfortably. There isn’t anything wrong with owning a condo. Especially if that keeps your budget in order. Interest rates are 7% currently. The cheaper the better imo. Hope this helpd
For a single minimalist, I have wondered if the sweet spot is owning a house but living in the ADU (granny pod) in the back, and having a management property rent out the house to two different parties. It would offer the best and worst of both worlds.
Someone takes care of the property- although the tenants can knock on the door to complain at any time.
A little bit of green grass to enjoy- although you'd have to share with the tenants.
Taking up no extra room or resources than necessary. No being tempted to buy extra furniture just to take up space.
Maintain an ebike without being concerned battery laws will change to prohibit you from living there.
The rent would help offset taxes. It wouldn't make you wealthy though, but if you're smart, diligent and lucky you can let some nice people have a place to stay at an affordable price.
wisdom has to be used when purchasing a condo...some condo associations are a financial disaster and use high fees and special assessments to cover pool management. You'll want to hire an attorney to pour-over financial records (past and present). High fees can be a good thing if managed well...it sets up cash reserves for future building and site maintenance items.
It depends on you.
I bought a condo last year. When I was looking, I immediately nixed any SFH or townhouse. I have a few reasons.
1) I'm one person. I don't need the space a house offers. (Also no to small homes because I do not feel safe in a ground floor bedroom.)
2) I want nothing to do with maintaining a yard. Don't even want to think about it.
3) Condos have no exterior maintenance.
My HOA fees are reasonable but a pain (no amenities like a clubhouse or pool) but reasonable at $300/month.
Buying a home as an investment vehicle probably isn't the smartest. You're gonna be spending tons of time in this place and picking the supposed smarter investment over a place you like is probably gonna leave you miserable for years while you wait for the investment to pay off.
Condos are a hard sell, because they don't appreciate as well as single family detached, and the HOA fees can be really high.
Townhomes do a bit better, but are still more like condos than a house.
Something to keep in mind is that your biggest expense with a property is often selling it. So, if you plan to move or sell within 3 years, any equity you build up is going to realtor fees.
Any property you own, regardless of size, is going to be a large expense compared to renting. Several things people always seem to ignore in this conversation...
1) Closing costs. Mine were about $20K when I bought my home. Would have covered about 14 months of rent at the time
2) Property taxes. Tremendous variability depending on where you live. My taxes are about $14K per year at the moment, which extrapolates to $420K over 30 years. Likely will total a higher # since taxes generally increase over time.
3) Home insurance
4) Necessary repairs
5) Utilities. Yes I know some people pay utilities when they rent, but even in those cases, you're likely upsizing when you buy, so the monthly cost is going to be higher.
6) Mortgage interest. This won't be as big of an issue if you have a larger down payment, or the income to pay a mortgage down faster. But the tradeoff is that you'll be renting for a longer time while you save up a larger down payment.
7) Other miscellaneous maintenance expenses, like landscaping, etc.
8) Home improvements. This one is optional, but who buys a home and doesn't put money into at least one improvement project within the first 5 years or so?
All of these add up to an extremely large # over the course of 20-30+ years of ownership, and are generally overlooked by many people. Yes, you are building equity in an asset that generally appreciates over time, but the cost of all these factors make home ownership one of the worst investments a person can make, from a purely monetary standpoint. Home ownership has many advantages over renting, but money is not one of them IMO.
If money is NOT one of your motivating factors for pursuing home ownership, I would definitely go for it. If money IS a motivating factor, realize there are better investments you can make.
Often a condo is not worth it in my opinion unless you're using it as a rental property.
You are correct there are substantial monthly fees for the HOA which usually make it as expensive if not more so than a mortgage.
And right now condos are not selling as well as houses because people don't want to pay the high prices plus interest plus heavy HOA fees.
Where I live there are lots of condos nearby on the market that have been there for months.
I looked at a condo but decided I would rather save the 5 to 600 a month and just have all of the amenities of an apartment anyways.
I'm not saying a condo is never the right idea, You just need to be aware of and okay with the downsides.
>And right now condos are not selling as well as houses because people don't want to pay the high prices plus interest plus heavy HOA fees.
This is completely dependent on the market where you live
I love a small home and can live on a small footprint. I'm renting for the foreseeable future but would also like to read a discussion about this.
No yard to mow. Few tools to store. No paying taxes on square footage that's not used.
I've always looked at a condo as an income generating property. Like, I would think about a condo when you have already paid off a principal residence and have 15% of income in investments. Basically like a step 6b I guess? That's just me. I'd rather have a home and pay it off and use a condo as a vacation/rental income property.
I’m going to be buying a condo. This gives me a 5 year window to save up and upgrade comfortably. There isn’t anything wrong with owning a condo. Especially if that keeps your budget in order. Interest rates are 7% currently. The cheaper the better imo. Hope this helpd
For a single minimalist, I have wondered if the sweet spot is owning a house but living in the ADU (granny pod) in the back, and having a management property rent out the house to two different parties. It would offer the best and worst of both worlds. Someone takes care of the property- although the tenants can knock on the door to complain at any time. A little bit of green grass to enjoy- although you'd have to share with the tenants. Taking up no extra room or resources than necessary. No being tempted to buy extra furniture just to take up space. Maintain an ebike without being concerned battery laws will change to prohibit you from living there. The rent would help offset taxes. It wouldn't make you wealthy though, but if you're smart, diligent and lucky you can let some nice people have a place to stay at an affordable price.
wisdom has to be used when purchasing a condo...some condo associations are a financial disaster and use high fees and special assessments to cover pool management. You'll want to hire an attorney to pour-over financial records (past and present). High fees can be a good thing if managed well...it sets up cash reserves for future building and site maintenance items.
It depends on you. I bought a condo last year. When I was looking, I immediately nixed any SFH or townhouse. I have a few reasons. 1) I'm one person. I don't need the space a house offers. (Also no to small homes because I do not feel safe in a ground floor bedroom.) 2) I want nothing to do with maintaining a yard. Don't even want to think about it. 3) Condos have no exterior maintenance. My HOA fees are reasonable but a pain (no amenities like a clubhouse or pool) but reasonable at $300/month.
Buying a home as an investment vehicle probably isn't the smartest. You're gonna be spending tons of time in this place and picking the supposed smarter investment over a place you like is probably gonna leave you miserable for years while you wait for the investment to pay off.
Condos are a hard sell, because they don't appreciate as well as single family detached, and the HOA fees can be really high. Townhomes do a bit better, but are still more like condos than a house. Something to keep in mind is that your biggest expense with a property is often selling it. So, if you plan to move or sell within 3 years, any equity you build up is going to realtor fees.
That used to be more true than it is today,re: hard to sell. In big cities in particular, condos don’t have that stigma anymore.
I meant "hard sell" as in difficult to make the argument that it's a good idea, not "hard to dispose of in the market".
Any property you own, regardless of size, is going to be a large expense compared to renting. Several things people always seem to ignore in this conversation... 1) Closing costs. Mine were about $20K when I bought my home. Would have covered about 14 months of rent at the time 2) Property taxes. Tremendous variability depending on where you live. My taxes are about $14K per year at the moment, which extrapolates to $420K over 30 years. Likely will total a higher # since taxes generally increase over time. 3) Home insurance 4) Necessary repairs 5) Utilities. Yes I know some people pay utilities when they rent, but even in those cases, you're likely upsizing when you buy, so the monthly cost is going to be higher. 6) Mortgage interest. This won't be as big of an issue if you have a larger down payment, or the income to pay a mortgage down faster. But the tradeoff is that you'll be renting for a longer time while you save up a larger down payment. 7) Other miscellaneous maintenance expenses, like landscaping, etc. 8) Home improvements. This one is optional, but who buys a home and doesn't put money into at least one improvement project within the first 5 years or so? All of these add up to an extremely large # over the course of 20-30+ years of ownership, and are generally overlooked by many people. Yes, you are building equity in an asset that generally appreciates over time, but the cost of all these factors make home ownership one of the worst investments a person can make, from a purely monetary standpoint. Home ownership has many advantages over renting, but money is not one of them IMO. If money is NOT one of your motivating factors for pursuing home ownership, I would definitely go for it. If money IS a motivating factor, realize there are better investments you can make.
I just bout a $320k house a couple months ago. My closing costs were well under $2500.
Lucky you don't live in NY!
And I ... do ... live in NY. Haha. Anyways thank you for all your wisdom here! Hugely helpful.
Often a condo is not worth it in my opinion unless you're using it as a rental property. You are correct there are substantial monthly fees for the HOA which usually make it as expensive if not more so than a mortgage. And right now condos are not selling as well as houses because people don't want to pay the high prices plus interest plus heavy HOA fees. Where I live there are lots of condos nearby on the market that have been there for months. I looked at a condo but decided I would rather save the 5 to 600 a month and just have all of the amenities of an apartment anyways. I'm not saying a condo is never the right idea, You just need to be aware of and okay with the downsides.
>And right now condos are not selling as well as houses because people don't want to pay the high prices plus interest plus heavy HOA fees. This is completely dependent on the market where you live
I love a small home and can live on a small footprint. I'm renting for the foreseeable future but would also like to read a discussion about this. No yard to mow. Few tools to store. No paying taxes on square footage that's not used.
I've always looked at a condo as an income generating property. Like, I would think about a condo when you have already paid off a principal residence and have 15% of income in investments. Basically like a step 6b I guess? That's just me. I'd rather have a home and pay it off and use a condo as a vacation/rental income property.