Author Topic: Sell house, buy condo?  (Read 3198 times)

unshift

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Sell house, buy condo?
« on: December 20, 2012, 10:36:37 PM »
I'm a 28 year old guy and the owner of a 3 bedroom, 2 bathroom house.  I'm considering moving to a 1 bedroom, 1 bathroom condo.

Is this a wise idea?  I have a solid amount of equity in the house (about half) which I feel would be better used towards a smaller, cheaper place which I could pay off within a few years.

I don't use most of the space in the house and it feels like a waste to pay such a high monthly payment for a bunch of empty rooms, plus I'm not into all the maintenance.  In a few years a couple major things are going to go as well -- boiler, surrounding retaining wall, etc.  I'm not sure if I could currently break even on a sale, especially after realtor's fees.  There are a bunch of things around the house that need fixing before selling, which should cost about $10K or less.

The appeal of the condo is that it's brand new, unlike my house which is 60 years old and full of half-complete projects, and smaller, which means I'll be unable to accummulate crap.  I'd also be willing to furnish it properly since it'd be a smaller space, and think it would in general just increase my home satisfaction.  The house as it is now is a constant source of stress for me.

Does moving sound smart in the long run?  It's possible I'll need to buy another house in, say, 5 years if I were to get married and have a kid, but it's unlikely I'd want to stay in this house anyway.  But at least the next time around I'd have more savings to buy with, and could always rent out the condo as a source of income.

DoubleDown

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Re: Sell house, buy condo?
« Reply #1 on: December 21, 2012, 08:41:10 AM »
Without knowing all the numbers, it would be impossible to say with certainty what the best financial decision is. But based on what you've described, all indications are that selling your house and buying something smaller (condo or otherwise) would be a win-win-win situation. You would be happier. It will cost less each month. It will probably require less ongoing maintenance expense and avoid large expenses you know are coming on the current house.

It sounds like you've thought through the pros/cons carefully, I see no downside in going for it!

And if you're going to end up having the condo paid in full (or very near), then it should make for a great rental income generating property for you if you do decide to rent it out one day.

Meadow Lark

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Re: Sell house, buy condo?
« Reply #2 on: December 21, 2012, 11:01:14 AM »
I don't know anything about that particular condo, but it does sound like selling your current house and moving to somewhere smaller/cheaper/easier is a good idea.  And if it is closer to work, even better!  Especially because you are thinking the future may bring renting it out, or starting a family, I would consider comparing the price on a 1 bedroom condo to a 2 bedroom condo. Sometimes it is not that big of a difference. Depending on location, 1 bedroom's might be hard to rent or sell, and if you do get married and have a kid, it would still be possible to stay there.
« Last Edit: December 21, 2012, 11:06:24 AM by Meadow Lark »
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Blindsquirrel

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Re: Sell house, buy condo?
« Reply #3 on: December 22, 2012, 09:16:38 PM »
watch the condo fees, they can be rough.
Even a blind squirrel finds a nut once in awhile.

Blackbomber

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Re: Sell house, buy condo?
« Reply #4 on: December 24, 2012, 08:26:18 AM »
Depending on where you live, the current housing market might be more conducive to up-sizing, rather than down-sizing. I'll probably get slammed for this, but I'd personally consider pulling the equity out of the house to buy something smaller to live in. Rent out the bigger house, and sell it when the market recovers. Again, this depends a lot on your locale. I'd also personally shy away from condos (yes, I owned one, and did well on it), but that's more my preference than anything. Since condominiums are more price sensitive than houses, buying one in a down market could be wise.

marty998

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Re: Sell house, buy condo?
« Reply #5 on: December 25, 2012, 05:24:15 PM »
Depending on where you live, the current housing market might be more conducive to up-sizing, rather than down-sizing. I'll probably get slammed for this, but I'd personally consider pulling the equity out of the house to buy something smaller to live in. Rent out the bigger house, and sell it when the market recovers. Again, this depends a lot on your locale. I'd also personally shy away from condos (yes, I owned one, and did well on it), but that's more my preference than anything. Since condominiums are more price sensitive than houses, buying one in a down market could be wise.

That sounds like a good idea. Run the numbers and you'll probably come out best in the long term this way

unshift

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Re: Sell house, buy condo?
« Reply #6 on: December 27, 2012, 11:05:22 AM »
I like the idea but I don't think the numbers really pan out.  I live in the northeast where real estate is really expensive -- my mortgage payment is $2k/mo on a 2000sqft house, and there's really no way to rent it out for the necessary 1.5 or 2x multiple to make it work.

Another Reader

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Re: Sell house, buy condo?
« Reply #7 on: December 27, 2012, 11:17:26 AM »
Given the numbers and how much you dislike maintenance, would you consider selling the house and renting a condo?  You might come out ahead even after the tax considerations if the rent to buy comparison is so lopsided.

JohnGalt

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Re: Sell house, buy condo?
« Reply #8 on: December 27, 2012, 03:10:48 PM »
Given the numbers and how much you dislike maintenance, would you consider selling the house and renting a condo?  You might come out ahead even after the tax considerations if the rent to buy comparison is so lopsided.

+1

I'm in a similar situation all around -age, size of house, dislike of house maintenance, single, barely use the space, etc... My plan is to sell my house and rent, even though I'm in an area where buying is generally better than renting.  I miss the flexibility of being able to move when my lease is up and not having to deal with maintenance. 

SunshineGirl

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Re: Sell house, buy condo?
« Reply #9 on: January 03, 2013, 09:34:08 AM »
Renting sounds ideal for you vs. buying a condo.

ShortInSeattle

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Re: Sell house, buy condo?
« Reply #10 on: January 03, 2013, 11:08:11 PM »
We sold our big house and bought a condo.  It's been a really great move.

- downsized our "stuff" which is psychologically liberating.
- freed ourselves from the never ending onslaught of home maintanance.
- significantly lowered our utility costs.
- moved from a suburb that required a car to an urban area where we can walk/bus 90% of the time. (Life reclaimed: 8-10 hours per week)
- bought the condo during the scary part of the real estate crash - bargain price.

We also rented for 2 years in the city before making a purchase.  To make sure we really liked the scaled down city life.

It can work well, but you need to consider all the variables.  For us, lowering our mortgage payment doesn't even make the top 5 of the reasons we are happy we moved.

SIS