I have 2 possible friends I might get a place with in the fall. It would either be a 3 bedroom apartment or buy a condo. What are some pros/cons? Anyone have first hand experience?
Pros/Cons: Buy a Condo Vs. Rent 3 bedroom apt. with 2 other friends
- Thread starter Night201
- Start date
codeyf
Lifer
- Sep 6, 2000
- 11,854
- 3
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Buy a condo.
Investment > Throwing your money away
The only downside to a condo/townhome is the typical dues you pay monthly/quarterly/whatever. Depending on the complex, they can be pretty high. Sometimes, it does cover some utilities which is good. I actually own a home, but it's in a planned neighborhood, and we pay just over $200 a year. Gets us access to the pool and some other benefits. Condo and townhome communities can easily cost that much per month, but typically include garbage/water/sewer utilities. In most cases, seperate bills for those services will be more than $200, but it's something you will need to research.
What it comes down to is, you won't see any sort of return on your money when renting. So if you can afford buying, it's the way to go. Especially with what rates are at.
Investment > Throwing your money away
The only downside to a condo/townhome is the typical dues you pay monthly/quarterly/whatever. Depending on the complex, they can be pretty high. Sometimes, it does cover some utilities which is good. I actually own a home, but it's in a planned neighborhood, and we pay just over $200 a year. Gets us access to the pool and some other benefits. Condo and townhome communities can easily cost that much per month, but typically include garbage/water/sewer utilities. In most cases, seperate bills for those services will be more than $200, but it's something you will need to research.
What it comes down to is, you won't see any sort of return on your money when renting. So if you can afford buying, it's the way to go. Especially with what rates are at.
Are you going to be moving in the next five years? If so, I'd consider renting over buying. It will take you a number of years to start to turn a profit on your investment.
Look at your investments.
Buying a condo: paying $xxxxx.xx upfront, along with all the bills every month. When your done with it you could sell it..
Renting: $xxxx.xx a month, plus some bills (water and garbage are usually included). money inthe hole..
How many years do you plan to stay there/with these friends? If its more then a few years buying may be more affordable but there is also alot more work involved..
figure out how much you would be spending renting vs. owning and that would be my deciding factor.
Buying a condo: paying $xxxxx.xx upfront, along with all the bills every month. When your done with it you could sell it..
Renting: $xxxx.xx a month, plus some bills (water and garbage are usually included). money inthe hole..
How many years do you plan to stay there/with these friends? If its more then a few years buying may be more affordable but there is also alot more work involved..
figure out how much you would be spending renting vs. owning and that would be my deciding factor.
Actually...
If you buy and have friends living with you you make an instant profit. Think about it....
Condo = 750$ Mortgage
Dues = 150$ (Covers Garbage , Sewer, Water)
Insurance = 50$
-----------------------
950$
You buy it and rent it to your friends at 350-400$ a month (in most places more then fair and cheaper then anything else). Throw in Internet access via Cable or DSL to every one for free. Now... it is a win win situation.
- You have your buddies paying into an investment of yours
- They live cheaper then anywhere else
- You have a mucho Tax deduction on top of it
- Depending where you are... in 3-5 years when you sell it you should make a profit on top of all of the above.
Now... DO NOT BUY AS A CO-OP. One person should buy! Things change... people learn to love and hate each other. You never know! In general it is not a good idea to bind your credit worthiness to someone else without a marriage certificate (sometimes not even then
)
If you buy and have friends living with you you make an instant profit. Think about it....
Condo = 750$ Mortgage
Dues = 150$ (Covers Garbage , Sewer, Water)
Insurance = 50$
-----------------------
950$
You buy it and rent it to your friends at 350-400$ a month (in most places more then fair and cheaper then anything else). Throw in Internet access via Cable or DSL to every one for free. Now... it is a win win situation.
- You have your buddies paying into an investment of yours
- They live cheaper then anywhere else
- You have a mucho Tax deduction on top of it
- Depending where you are... in 3-5 years when you sell it you should make a profit on top of all of the above.
Now... DO NOT BUY AS A CO-OP. One person should buy! Things change... people learn to love and hate each other. You never know! In general it is not a good idea to bind your credit worthiness to someone else without a marriage certificate (sometimes not even then
)
codeyf
Lifer
- Sep 6, 2000
- 11,854
- 3
- 81
Originally posted by: Karsten
Actually...
If you buy and have friends living with you you make an instant profit. Think about it....
Condo = 750$ Mortgage
Dues = 150$ (Covers Garbage , Sewer, Water)
Insurance = 50$
-----------------------
950$
You buy it and rent it to your friends at 350-400$ a month (in most places more then fair and cheaper then anything else). Throw in Internet access via Cable or DSL to every one for free. Now... it is a win win situation.
- You have your buddies paying into an investment of yours
- They live cheaper then anywhere else
- You have a mucho Tax deduction on top of it
- Depending where you are... in 3-5 years when you sell it you should make a profit on top of all of the above.
Now... DO NOT BUY AS A CO-OP. One person should buy! Things change... people learn to love and hate each other. You never know! In general it is not a good idea to bind your credit worthiness to someone else without a marriage certificate (sometimes not even then
Wise words!!!! And VERY good points. Rent the rooms to your friends....now you're the land lord!!!
Oh... and of course adjust prices for rent and purchases according to the area where you are. Crunch some numbers... either way... if you pay 100$ more a month for owning your own place it is worth it!
And don't forget that there is finacing available with little to no downpayment!
And don't forget that there is finacing available with little to no downpayment!
Evadman
Administrator Emeritus<br>Elite Member
- Feb 18, 2001
- 30,990
- 5
- 81
Originally posted by: Karsten
Actually...
If you buy and have friends living with you you make an instant profit. Think about it....
Condo = 750$ Mortgage
Dues = 150$ (Covers Garbage , Sewer, Water)
Insurance = 50$
-----------------------
950$
You buy it and rent it to your friends at 350-400$ a month (in most places more then fair and cheaper then anything else). Throw in Internet access via Cable or DSL to every one for free. Now... it is a win win situation.
- You have your buddies paying into an investment of yours
- They live cheaper then anywhere else
- You have a mucho Tax deduction on top of it
- Depending where you are... in 3-5 years when you sell it you should make a profit on top of all of the above.
Now... DO NOT BUY AS A CO-OP. One person should buy! Things change... people learn to love and hate each other. You never know! In general it is not a good idea to bind your credit worthiness to someone else without a marriage certificate (sometimes not even then
This is EXTREAMLY good advice.
Exactly...then it's like you're still livin w/ your friends and you're still gettin a place...and you're also having htem pay for your place
Same price as renting only you're getitn somethin out of itYep Karston has the best advice the only Con is, you might be freinds now but living with somebody can change that I've known lots of guys best freinds
before lving together , hate each other after.
Also when you become the owner you have to put up with the washing machine dying etc.
Renting means your level of responsibility is nil pretty much.
So do you want to become a property owner? Its the best financially but reliable roomates who pay their bills is key!
I bought a house and have rented out the rooms to aquaintances not freinds , some of the 'freinds' and I that have lived together as renters
haven't got along so well as roomates.
before lving together , hate each other after.
Also when you become the owner you have to put up with the washing machine dying etc.
Renting means your level of responsibility is nil pretty much.
So do you want to become a property owner? Its the best financially but reliable roomates who pay their bills is key!
I bought a house and have rented out the rooms to aquaintances not freinds , some of the 'freinds' and I that have lived together as renters
haven't got along so well as roomates.
Maetryx
Diamond Member
- Jan 18, 2001
- 4,849
- 1
- 81
Another vote to buy and rent out the bedrooms to your friends (or grad students or whatever). The tax situation maybe be very favorable, but you should check with a tax preparer. I rent a house out, but I don't live in it myself like you would be. I don't know what kind of wrinkle is created by living in your investment property.
Still though, you can write off the interest on the mortgage no matter what.
Still though, you can write off the interest on the mortgage no matter what.
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