Good idea to buy a condo?
I am thinking of buying a condo and want to know from the blind community if it is a good idea as I am very unexperienced in real estate. I am looking at Zillow and Redfin. I see that I will be paying north of $3200 monthly including the HOA, property taxes, renters insurance, for next 30 years if I buy a good one in South bay. Is it worth it to buy one if I put it on rental after buying? TC - 250K YOE - 4
Many will say no, but I agree with UiUw57. Plus, you can live in it for a few years (5-7), then take the equity and buy a house and then rent out the condo. Young techies starting out will always need a place to live, especially in the Bay area.
Can you explain what do you mean by “take the equity and buy a house”? Also, how can I rent out the condo if I took the equity out of it?
If it’s a stable housing market and you have built equity into the condo, you can take that equity and use it to purchase another home. You can rent the original house out because you still own it/are making payments on it. You let the renter make your mortgage payment and live in the new, second home you buy.
Don’t buy property unless you have kids, and don’t buy a condo if you have kids.
Explain please, seriously curious
Yes, can you explain why you say this
The main difference to consider is that a condo means dealing with an HOA and neighbors that might be adjacent to you. Some may value having an HOA to manage the landscaping, but others might not like their rules. Others don't want to feel like they are living in an apartment and like having their "own" space. As for is it worth it, it's tough for anyone to answer without knowing your exact situation and the market. However, if you work out the total cost to rent it out (mortgage, property tax, insurance, HOA, maintenance, etc) and project when rent will exceed that, you might get sense of how long it'll take before it makes sense to rent it out for income (and to let it appreciate). My guess is 5+ years. People say single-family homes appreciate more than condos, but they do usually cost more so it's not always an option. But the key rule for real estate is location, location, location :)
Make sure you don’t have an HOA; many townhomes do not have one - it’s usually condos.
A lot of HOA forbid renting or charge you more for renting. And when your complex has too many rental, banks will hesitate to give loans.
Find a self managed HOA in a place that has good upkeep. Don’t pay too much for the HOA it’s tough for you and also makes it harder to sell. I doubled my money but this is pre-dot.com bubble, I’m a boomer. But I have lived in the area my lifetime and starting with a condo in this area is not a bad call. I’d buy one that you consider lower end but in a nice neighborhood. I was embarrassed of my first one, til I doubled my money and bought a house.
Exactly!!! I did the same.
Good call on self managed HOA. TIL.
But, the recession is coming..!
Find a great location and buy a single family home.... instead of wasting money in the HOA use it to pay a higher mortgage so you buy more property = make more equity :)
I doubled my money on a condo in 2 years.
Joke ?
Serious.