Hey!
In 2006, I bought a condo for $120,000. Of course, just a couple years later, the market crashed.
Half of the units in the building, which had not sold, were foreclosed on. They were later all bought for $50,000 each.
I've been paying down my mortgage fast and even refinanced to a fifteen year loan at 3% interest. My loan has 8 years left on it (only 5 years if I continue to pay it off early).
So, here is the deal. As more and more owners move out, their only option has been to rent their units. About 75% of the building is now renters.
It is a lot different living in a building with renters than it was with mostly owners. They are loud and obnoxious.
It's come to the point where I want to move or at least make a plan to move.
How should I exit?
Right now, I have $70,000 left on the mortgage. I am not exactly sure of the value anymore. Online it says my house value is $85,000. The only unit that shows up is a recent foreclosure that sold for $70,000.
A realtor said to list it for $75,000, which would leave me breaking even steven.
I am going to talk to another realtor though.
At this point I am thinking of moving to a quieter more suburban area and not live in the city anymore. Instead of a stack of condos, I'm looking at townhouses that are rows. I don't think I would ever or could ever live in a house. A house just isn't me.
So, should I:
A. Sell the condo immediately, cut my losses, and get a loan for the new quieter townhouse for $150,000 at historically low interest rates. Walking away with nothing from my condo would hurt psychologically but I could reason that my new townhouse would have decreased in the same amount of value and thus will be cheaper now to buy.
B. Stay in the condo a few more years and at least be able to walk away with some profit. In a few years, it should appreciate some and I'll have more paid off. (The foreclosures in the building are going to stop eventually and then shouldn't the value start being worth what other places of similar size are on the market for? There are places on the market for $120k that are the same size as mine but their buildings don't have foreclosures in them. Is it reasonable to hope that once a unit sells for a normal price in my building (long after these foreclosures), that my place could be worth 120k again?) I wonder if I'll ever be able to sell it because a buyer has to have 20 percent down in order to buy a place in a building filled with renters.
C. Stay in the condo until it is paid off. Then buy the townhouse.
D. Stay in the condo until it is paid off and I've also saved up enough money to buy the townhouse. This would take five years to pay the condo off and probably another five years to save the money needed to buy the townhouse outright (combined with the money earned from the sale of my condo).
In addition,
Should I continue to throw more money to my condo loan to get it paid off early (fives years versus eight) or should I start building up a huge savings (at 1 percent).
Thank you in advance.
My big worries are if I'll ever be able to sell this place for anything really. My other big worry is what is the fastest way to get a new place and have the new place paid off. To me, the fastest way to increase my wealth is to pay off my condo and then save for the entire price of the new townhouse. This means no new loans and the interest works for me. But, in ten years, won't the townhouse be a lot more expensive? Of course, the market could crash again and then I could pounce. Which leads me to think I should be saving money now and not pay any extra to my condo.