Financial Advice with POLL

[desteffy]

Hello, I know some of you may have even had experience with this so I thought I'd ask.

I'll be moving out to go to grad school next year and will need a place to stay. Should I buy a condo (and probably rent one room out) and then sell it after 4 years, or just rent a place. I will almost certainly move to another city after the 4 years are up. I have heard different things from different people, which makes more financial sense?

 

[DaWhim]

do not buy a house or condo. the real estate is gonna fall anytime soon. go with renting

 

[Jzero]

I say buy the condo, but I'll do you one up - don't sell it when you graduate, rent the other room out, too.

 

[mchammer187]

definitely buy if you can afford it

 

[DaveSimmons]

Hard to say without looking into the real estate market for that area. Condos often don't appreciate as quickly as houses and can be harder to sell.

My inclination would be to rent and put the extra money into vanguard.com and VFINX shares instead, but I always say that

 

[Reel]

If I were certain I'd be somewhere for 4 years and had the money to invest, I'd buy a house or townhouse.

 

[kgokal]

I agree you must analyze teh market and look at how the past has fared.

 

[MeanMeosh]

buy and rent out even after you graduate =P

 

[chowderhead]

think of it this way. If you are going to a college town and the condo you are looking at is even half-way decent, you should have little problem selling it in the future. College towns need students. Students always need housing. You own a condo.
The downside is that you are responsible for the upkeep of the place. If something is broken, you have to get someone to fix it. With renting you call up your landlord and they should take care of it.

 

[z0mb13]

which college? if in CA, rent..

if other places, buying might be a good idea. make sure u get no prepayment penalty on ur mortgage

 

[richardycc]

Originally posted by: DaveSimmons
Hard to say without looking into the real estate market for that area. Condos often don't appreciate as quickly as houses and can be harder to sell.

My inclination would be to rent and put the extra money into vanguard.com and VFINX shares instead, but I always say that

condos are hot in my state, they are selling faster than single fam houses. my condo is up almost 50% since I bought it less than 3yrs ago. One unit was sold within 3 days at over the asking price. good for me, bad for the sucker, err I mean buyer!

 

[theNEOone]

the answer depends on alot of different things. what's your income going to be like? can you afford the mortgage payments w/o stretching your budget? can you even qualify for a loan? do you have a sizeable down payment? do you even have a down payment to begin with? how's your credit? remember, owning a property isn't just repaying a loan - you'll have to pay for taxes, insurance, and any association/maintenance fees. in any major city that could add more than $700 /mo to your mortgage payment, and that's probably just an average depending on the size/location of the property.

as for concerns about the real estate market crashing, i would say that there is little chance of that happening. sure, prices will slow down, but i wouldn't worry too much about prices decreasing. i think that only ever happened once, and that's when interest rates were an astronomical 15%.


=|

 

[DaveSimmons]

Good points from chowderhead, z0mb13 and richardycc. The location makes a huge difference in the market, and be careful to get something you can pay off early. And don't forget to add condo association fees when figuring your costs.

I happen to live in a town with a lot of new condo construction, and with new house construction in surrounding towns, both of which are reasons against expecting big jumps in condo value.

The market has also had a huge run up during the low-interest years, and as interest rates keep rising people won't be able to afford paying much more. So even though prices will probably keep going up, it will be hard for increases to beat the return of an S&P500 index fund like VFINX.

On the other hand, owning a condo does give you full control over it (aside from your condo association rules) instead of following the landlords rules.

 

[Torghn]

Originally posted by: DaveSimmons
Hard to say without looking into the real estate market for that area. Condos often don't appreciate as quickly as houses and can be harder to sell.

My inclination would be to rent and put the extra money into vanguard.com and VFINX shares instead, but I always say that

Good advice. I just depends. I just bought a condo as my mortgage on it will be half what it would cost to rent an equivalent space. Got a really good deal, bought a foreclosed HUD home.