Author Topic: Is buying a condo mustachian?  (Read 735 times)

mrsfrugalsmith

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Is buying a condo mustachian?
« on: August 25, 2017, 05:43:21 AM »
Here is the situation:

My husband and I are newly debt free (this month)! We live in Clackamas (a suburb of Portland, OR). We would like to buy a house but the minimum starting price in the area is 330k. We currently rent a 1br/1ba condo for $1475 that is a 10 minute walk to work. There is a 2br/2ba condo for sale in the same complex for $177K. With 5% down a 15 year mortgage would be $1700/mo. After that the financial responsibility would be ~$5588/year (property tax/HOA/insurance). HOA includes w/s/g. We have ~8 years until FI. It is possible we would relocate after we retire.

Should we keep renting for the foreseeable future? Should we wait a little longer and see what housing prices will do? Is paying HOA fees forever financially irresponsible? I do feel like condo living would be a little disappointing- no chance for a garden, less privacy, but the 10 min walk to work/grocery/ect is so nice. 

Thanks for your input!

jennifers

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Re: Is buying a condo mustachian?
« Reply #1 on: August 25, 2017, 07:57:06 AM »
I haven't done any calculations, but that sounds like a good deal.  How much are the condo fees?  I would guess property tax /insurance on a 330k house would be more than the hoa/property tax/insurance on a condo- it would be a lot more in my area.  Also when you buy a house you need to do lots more maintenance and buy stuff like a lawnmower etc.

I lived in a condo with 190$ condo fees for the past 5 years and don't regret it. Having lawn care and snow removal plus being close to work is HUGE. You won't have to buy things like lawnmowers etc.  Also my insurance for a condo was only like 150$ per year, when I get a house it's going to be 600$ a year.


ketchup

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Re: Is buying a condo mustachian?
« Reply #2 on: August 25, 2017, 08:05:26 AM »
Renting for $1475/mo vs buying with a $1700/mo mortgage (is that PITI or just PI?) seems to point to renting.  Also, if you're currently in a 1 bedroom, why not wait until a one bedroom is on the market to consider instead of two bedroom?

TreesBikesLove

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Re: Is buying a condo mustachian?
« Reply #3 on: August 25, 2017, 08:31:21 AM »
Plugging your numbers into the NYTimes Rent vs. Buy calculator seems to indicate that buying is better but there are a lot of variables I left default which you should plug in yourself. Most critically, I didn't put in HOA, insurance, or property appreciation because those would look different in a condo and this calculator assumes single family home.

Try it yourself and see:
https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?mcubz=0

Is Clackamas a place you would like to stay long term? Being 10 minute walk from work is a HUGE benefit but nearly $1500 per month for a 1/1 rental seems really steep. Maybe you can work with your property owners to lower your lease (assuming you've been a good tenant, pay on time, have bought a few major appliances, etc.).

Good luck. My partner and I also live in a PDX suburb and aspire to own a home but at these prices...

mrsfrugalsmith

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Re: Is buying a condo mustachian?
« Reply #4 on: August 25, 2017, 09:46:20 PM »
Renting for $1475/mo vs buying with a $1700/mo mortgage (is that PITI or just PI?) seems to point to renting.  Also, if you're currently in a 1 bedroom, why not wait until a one bedroom is on the market to consider instead of two bedroom?

$1700 includes PITI and the $246/mo HOA fee. We want a little more space than the 1bdrm bc we want to have kids. I'm still on the fence. I feel like its a good deal, but not sure about the appreciation of the condo vs house.

calimom

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Re: Is buying a condo mustachian?
« Reply #5 on: August 26, 2017, 11:18:53 PM »
A 5% downpayment indicates you don't have a lot of savings ~ would there be PMI?

And remember you can have kids and still live in a 1BR. Tight, but a lot of people do it. Fully understand the desire to have a home of your own, though.