Big Life Decision

[Squisher]

Why does it have to be a BIG house?

The sweet spot is 3 bedrooms, big or small.

 

[torpid]

Need more info:

Is there an actual B for comparison yet or is it only hypothetical? Ignore the below questions about B if there is no "actual" B yet...

Is A in a better neighborhood than B (it seems so - just want to confirm)?

Am I to understand that Mortgage of B over lifetime = Mortgage of A over the same lifetime + MDX Car Payment over x years + new furniture + 65" LCD?

What are the association fees?

What sort of Condo is it? Detached, semi-detached, attached, first floor, top floor, etc.?

What are the condo association benefits?

Anyway, do not base your long term finances on any assumptions about appreciation or depreciation of real estate. While B might appreciate, there is no guarantee that it will, nor is there any guarantee that you will end up better off than A by the time you sell.

In general, house > condo for many reasons, but the opposite can be true in some circumstances.

Also, why would you want to spend ~$40,000 on a luxury SUV exactly? A better option might be to take A and not get an expensive car (but still get the LCD).

 

[mugs]

Originally posted by: Squisher
Why does it have to be a BIG house?

The sweet spot is 3 bedrooms, big or small.

I'm wondering if by "big" house he means bigger than the condo, because you'd think the smaller house alternative would be obvious to him. The price difference between a condo and a "big" house is not going to amount to an MDX and some furniture.

 

[rivan]

Originally posted by: mugs

Originally posted by: rivan

Originally posted by: waffleironhead
Do what you want to do. Houses are not investments, they are places to live. If you will be miserable in a house, get the condo. Buy you tv, get the car. Just remember, you can always sell the condo and step up if you decide you need more space later.

Wrong.

My first house was in a less-than-glamorous part of town and needed a lot of work. When I sold, I made nearly 3 years' salary. I had the place not quite 8 years.

That, by far, has outperformed any other 'investment' I've ever made.

Did you use that money to buy another house? How much did that house cost relative to the previous house?

I think the point that waffleironhead is that you should look at your first home primarily as a home, not as an investment. The value will likely go up, but so will the values of the houses around you. You've only really made any money when you either 1) sell your house and don't buy another one or 2) sell your house and move to a less expensive area. Otherwise you're just riding the same wave as everyone else. Improvements do help, and can be a good "investment." But a trap that a lot of people fall into is improving their house to suit the next owner. It's your home first, an investment second.

That's only partially right. The area I was in saw home values appreciate far more than many other areas, and while it was something of a gamble buying where I did, it paid off. While it wasn't a terrible part of town, it was definitely becoming a better part when I bought. As an added bonus, it was a duplex that started out paying ~40% of it's own mortgage in rent and ended up paying 125% of it's own mortgage in rent every month. I lived (more or less) mortgage-free for about three years. There were costs involved in getting there, but the bottom line in my comments is that while your house will ALWAYS be your home, you should approach it as an investment as well. First homes aren't typically the ones that you're going to spend your life in - you need to consider the financial position you'll be in when you decide to sell. More than almost anything else, in my opinion.

Yes, I used the proceeds to buy a more expensive home when I got married (my wife also had a home in a similar situation and did very well on it). The proceeds from those homes allowed us to buy a large home in an area that would be totally out of our reach.

 

[Old Hippie]

I'd go for option "A" with the toys and smaller home.

I've always used option "what if I'm not here tomorrow" to rationalize not going out on a major future investment limb.

Since you're only going around "life" one time, make it confortable for yourself while appeasing everybody else.

 

[LS21]

buying a place where you have to pay "maintenance" is ridiculous , to me.

unless i was a billionaire and looking at a penthouse in the middle of a city.. then maybe...

 

[JS80]

We've lost an entire generation worth of housing appreciation. Don't expect it to appreciate in value much.

option c) rent and splurge until you find a spouse and ready to settle in a place forever

 

[hanoverphist]

Originally posted by: ironwing
See if you can find historic sales data for condos in the neighborhood and complex you are considering. That should give you more incite into what kind of appreciation/depreciation to expect. I was raised on the "never buy a condo, you'll lose" mantra but I have no idea if there is any truth to it.

my stepdad owned a condo in north tempe (kind of far from ASU tho) when he met my mom. rented it out for years, sold it way before the boom and tripled what he paid for it. nothing really new about the area, same view, same college 3 miles away, same strip mall down the street.

 

[JS80]

Originally posted by: hanoverphist

Originally posted by: ironwing
See if you can find historic sales data for condos in the neighborhood and complex you are considering. That should give you more incite into what kind of appreciation/depreciation to expect. I was raised on the "never buy a condo, you'll lose" mantra but I have no idea if there is any truth to it.

my stepdad owned a condo in north tempe (kind of far from ASU tho) when he met my mom. rented it out for years, sold it way before the boom and tripled what he paid for it. nothing really new about the area, same view, same college 3 miles away, same strip mall down the street.

Those days are over. Forever.

 

[Geekbabe]

You're single? why not continue to rent and keep saving money, then when you're ready to marry, have kids you and the wife can pool resources, get a great house with a huge down payment.

Home ownership is great but a house can quickly become a black pit where every spare dollar and every spare hour of a person's resources goes.

 

[SilentZero]

Big life decision and your asking ATOT? I call shens!

 

[xanis]

Originally posted by: Geekbabe
You're single? why not continue to rent and keep saving money, then when you're ready to marry, have kids you and the wife can pool resources, get a great house with a huge down payment.

Home ownership is great but a house can quickly become a black pit where every spare dollar and every spare hour of a person's resources goes.

This lady has some good advice. You might as well rent and spend your money on toys while you can, then buy a house when you're ready to get married and settle. Nothing wrong with that IMO.

Also, listening to your parents and heeding their advice is good. However, there are some things that you need to decide for yourself, even if your parents don't think it's the best.