We are a 25 year-old married couple who live in a highly desirable location in Honolulu HI. We have been renting for 6 months in a condo and love it here. We recently learned the owner is trying to sell our unit. He had listed the condo for several years, but no one bought it. Honestly, he has overpriced the unit to match the unit upstairs which has is fully renovated at $345,000.
Questions:
Can we afford it?
Would it be advisable for us to purchase or should we find a new place to rent?
Is this a good buy?
Would we be better off financially by buying now, or renting for a few years to increase our savings?
Take Home Partner 1: $3423 (Includes Health Insurance). Very stable job in my field which I enjoy and bike commute to, $5000 raise in August was part of the job offer.
Take Home Partner 2: Assume 0, however once he begins school the GI Bill will give him $2994 for the months he is in school (Does not include breaks) for housing which is tax free. They also provide $1000 for “books” per year. Tuition and Fees are fully covered. He expects to start school in January 2016 for 3.5-4 years for a degree in engineering. For the next two months we are saving his entire pay (about $5500- $3300 is nontaxable). He also may work part time or odd jobs to pick up money during school or before he begins school. He plans on biking to school (about 2-3 miles) and getting jobs within biking distance.
Debts:
Partner 1: $85,000 in federal student loans. Current income based payment is $0, will be revised in August. Plan to utilize PSLF. Currently have 13 of 120 months in a non-profit needed to forgive the balance.
Monthly Expenses:
Current Rent: $1700 (similar unit in building rents for $2100)
Phones: $90 (t-mobile 2 phones)
Electricity: $100 (Use approx 280 kwh/month- electric oven & water heater- hang dry clothes)
Internet: $35
Renters Insurance: $11 (Paid Yearly)
Auto Insurance: $20 (Paid every 6 months)
Groceries: $450 (Partner 1’s fancy pants item)
Gas: $50 (in two months will be near $0)
Entertainment: $100
Total: $2556
Assets:
Cash on hand: $1,900
Roth IRA: $9,100
VTSMX: $10,900
Car: $10,000 (Miata! We are considering selling. Partner 2’s fancy pants item)
We both have decent credit and are thinking of offering a way lower price for the condo ($250,000-$300,000 if a price point leans you towards yes or no, let us know what that price point that is). We could use the VA home loan so we wouldn’t need a down payment.
The condo is fee simple, with current condo fees of $550 and rumor is they are going up 30% to ~$730. Utilities would remain the same.
It is 636 sqft, 1 bedroom, 1 bath.
There are many upgrades that would need to be done eventually, however...
The brightsides are: we love the space, it is open with high ceilings. Plus, we love the area. I bike about 2 miles to work, and there are beaches, parks, restaurants, bars, the mall, you name it within a few miles. Most importantly, a Costco is close enough that we can take our bike trailer to buy groceries. We have a beautiful mountain view from the ninth floor, and can see the ocean from the corner of the lanai. Residence includes one parking spot in a secured garage.
We are looking for any feedback you have- we don’t know any real live mustachians!