YART: Fiance wanted to buy a "new" condo instead of renting

[PandaBear]

Yet another real-estate thread:


Here is the deal:

We got into a fight recently when I found a house I like, $620k in South San Francisco near Hickey, a beater that has termite and fungus that need about $30k to $40k to fix up, in good but old neighborhood. She didn't like it and we got into a fight, I end up not bidding for it and let it go, got very upset.

So we decided to just rent for a while but she started getting interested in real estate (now that the market is soften abit, but not a lot) and want to get a house in newark/fremont etc. We looked around and can't find anything we can afford (around $450-600k) and so we decided to look at alternative.

She now wants to consider condo or townhouse. Those things are about $200-300 per month in association fee. I don't like that idea and rather have a complete ownership including the land, and moreover, I felt pissed off about she wanting new things and being superficial (she won't admit it, just say she can't handle old things).

To be honest I still felt hurt about losing out on that house I like, but I can live with that and rent a $1k apartment for a couple of years. But paying for a condo that is $450-550k instead? Thats a bit insane I think.

So what do you think of our situation, whether we should buy or what should we buy?




We:

plan to get married next year in June, engage this december.

have no debt

need to move out of our parents and live together.




She:

likes newer community, newer remodeling, own our own place, don't mind paying for a bit more than rent. Don't mind town house, don't mind condo.

Just got out of school, making $56k.

Working in South San Francisco in a good company.

Living at home in San Leandro.

have 30k saved up in cash.



Me:

want to get a good deal, don't mind fixer upper, prefer to have a real house (no association fee, get the land, etc), don't mind old but good/safe neighborhood, don't mind old house.

don't mind renting for a couple of years to wait for more down payment or the housing price to drop.

Worked for 3.5 years and making $63k, doing part time master program.

Working in San Jose/Milpitas in a decent company.

Living with parent in San Francisco.

have 85k saved up in cash.

 

[Bozono]

Buying a condo would seem alright to me for a relatively short(6-10yrs) time period. The amount you pay in fees will likely be recouped by the time you sell it. A lot of condo buyers prefer to buy in newer settled buildings instead of brand new.

 

[ThisIsMatt]

You can't find a condo without huge association fees, or a "low-income" style house (eg small, 2-story style with garage/kitchen/living/dining room downstairs and bedrooms upstairs, crammed on a small lot with 20 other similar houses)? Personally I'd much rather be putting my money towards something I'd eventually own rather than paying rent and getting nothing in the long run. At the same time I wouldn't want to pay association fees the rest of my life either.

 

[Cattlegod]

haha 600k for a beater.

lol, that would buy you a castle in michigan.

 

[AgaBoogaBoo]

Originally posted by: Cattlegod
haha 600k for a beater.

lol, that would buy you a castle in michigan.

same here in Indiana!

 

[PandaBear]

Rent vs. Mortgage:

Rent is about $1k for a one bedroom.

Mortgage is about $2.5k for a 2 bedroom condo for 30 years 6.1%.

Still think mortgage is a good deal?

 

[Minjin]

I can't help but find it hilarious that a couple making a combined $120k is living with their parents...

How about moving to an area without earthquakes, insanely high costs of living, and rediculously long commutes?

Mark

 

[slick230]

Originally posted by: PandaBear
Rent vs. Mortgage:

Rent is about $1k for a one bedroom.

Mortgage is about $2.5k for a 2 bedroom condo for 30 years 6.1%.

Still think mortgage is a good deal?

If you rent, you own nothing. You have no equity in your home. At least with a mortgage you build equity and have ownership. And you can turn around and sell in a few years if that's your wish. Renting gets you nothing but a temporary roof over your head and a lower monthly payment.

 

[Ameesh]

i bought a house to start off with and i am now selling the house (closing on the 4th of november) and I am going to buy 2 condos in La Jolla, CA with the proceeds., cali real estate is wierd, if you can find a condo in agood location at a good price i'd say go for it. my preference is to buy real estate in growing areas, i.e. temecula or palmdale or such, you see the most bang for your buck.

 

[Mo0o]

I personally would prefer the newer townhouse. Reguarly scheduled maintenance is worth the 200 a month

 

[Boztech]

You should try to calmly explain to your girlfriend that she is being shallow and short-sighted. Renting is throwing money away and does NOT support anyone's long term goals of home ownership.

If your girlfriend truely wants to end up a nice home at some point in her life, she should be willing to sacrifice paying to own a slightly older or more run down residence in the beginning while you build equity toward your next home purchase.

The absolute truth is, buying a home early on is the wisest and most powerful financial decision a couple can make, period.

I'm sorry you're in such a terrible market however. I have to admit that I would never even consider living or working in a place where even an above average salary cannot afford a couple even a decent home.

 

[her209]

I wonder what the ROI is on your own strip club? Hmmmm...

 

[Whoozyerdaddy]

You guys make $120k and you're looking in the $600k price range? :shocked:
That's complete insanity. You'll be working just to afford the mortgage. I make a little less than you guys do combined and I would find paying more than I do right now (have a $170k mortgage) to be uncomfortable.

My advice is to aim lower. MUCH lower. An additional piece of advice is to not even think about buying a place together before you are married. If you're already fighting about what/where to buy you need to take a step back.

 

[Boztech]

They can't think any lower in the area they are in, to be honest. Real estate in that area is beyond cost prohibitive.

 

[NickelTitanium]

You might want to reconsider the relationship. These are the things that will eat a relationship up eventually. If you think you can live with her stopping that last bid, then what will happen in the future? You have different goals and ambitions. However, if she is hawt, then disregard what I just said.

 

[Eli]

Originally posted by: NickelTitanium
You might want to reconsider the relationship. These are the things that will eat a relationship up eventually. If you think you can live with her stopping that last bid, then what will happen in the future? You have different goals and ambitions. However, if she is hawt, then disregard what I just said.

:roll:

 

[Kibbo86]

Originally posted by: slick230


If you rent, you own nothing. You have no equity in your home. At least with a mortgage you build equity and have ownership. And you can turn around and sell in a few years if that's your wish. Renting gets you nothing but a temporary roof over your head and a lower monthly payment.

He could bank that 1.5k every month, and look, all of a sudden he has assets! Assets which will help broaden his options when he (and the market) is ready for it. Cash money is 1000x better than real estate equity. Liquid, less prone to regional market swings. He may even be better off. How much of that 2.5k would actually be knocking off the principle of the mortgage?

If he has 85k banked already, he likely has the discipline needed to make the rental market worth his while.

 

[The Stigenator]

I agree, no condo or town house.. look around the market is softening.. you can rent for a while now, but later youc an buy.. keep a look out for things, it will come around.

 

[randomlinh]

i hate condo's.. and townhomes. heh... but damn, you guys have a ton saved up!

altho, at the same time, i would not want to buy a house that has termite and fungus problems.. especially at $600+... that's insane.

 

[PingSpike]

Personally, I'd rather buy a new condo then an old house. And I don't want a condo. But that old house is just going to keep falling apart all the damn time. Even if you can afford it, constant repairs are a pain in the ass.

 

[iamwiz82]

$600k for a fixer upper?

That's the international sign for "MOVE"

 

[Modeps]

Here's what I did... Out of college, I rented an apartment for a year and worked up some money for a down payment on a condo. I purchased a condo for $109k in CT's Condoville that needed zero work done to it. Lived there just over 2 years, got married and after another year had sold the condo making enough on the sale to put a downpayment on a house that was $291k.

In my personal opinion, renting is for suckers or people that just cant afford a lump sum downpayment. With renting, you piss your money away and get nothing back. you cant claim rent on your taxes, you CAN claim any interest paid toward a mortgage on your taxes.

 

[iamwiz82]

you cant claim rent on your taxes, you CAN claim any interest paid toward a mortgage on your taxes.

You can get a tax credit in the state of michigan. It was good for almost 2 months of rent back every year.

 

[mugs]

Originally posted by: Whoozyerdaddy
You guys make $120k and you're looking in the $600k price range? :shocked:

That was my first thought! They don't make much more than me and my wife combined, and I'd rather not spend over $300k. We're thinking about the future - kids and all that. We don't want to be unable to afford to have children because our house is too expensive.

 

[pulsedrive]

Yeah, all I gotta say is MOVE, with your savings you could pay CASH for a house in a lot of other palces in the country.