OT: Buying a house vs condo

[late knight]

If you are sweating your finances at all, rent. DO NOT get talked into buying a condo now with the idea of renting it when you buy your next house. You don't want 2 mortgages, even if the bank (or this board) thinks you can handle it. One dead beat tennant and your financial life is ruined. Rent until you have a solid down payment and enough money to comfortably fix the washer that will break, the car that will need new brakes and the tooth that your kid will chip.

Oh, and plan for your property taxes to rise, your health care costs the rise and your marriage counselling bills to rise. Your wife is cool now, but the beer and wing nights will turn into organic kale salads and gluten free, vegan lasagna.

 

[retired711]

Was about to place a bid on home in Jamesburg but after looking at mortgage/taxes etc I was wondering if a condo in the New Brunswick area would make more sense for a few years as it's just me and my wife and if kids come in the next couple years then make the move to a single family home. I was thinking I could save a lot of money going the condo route for a few years then go for the house a few years from now. The savings could be considerate and would allow us to save more in the next 2-4 years. The downside is trying to sell the condo a few years from now and if the values of condos could remain stagnant or decline during that time. Any thoughts?

I join those who urge you to rent if you cannot afford a house now. Except in some urban areas, annual condo appreciation is not high. You will have difficulty making a profit if you sell in 2-4 years. The go-go real estate market appears to have ended; you should buy a house only when you need it. The world is much different than when I was young, when it made sense to buy a house as quickly as possible because it would appreciate and you could then trade up.

 

[RUbacker]

Our family has lived in a condo for years. We bought it before the housing boom of the mid-late 2000's, so it has increased in value nicely. You couldn't beat the convenience: low taxes, no lawn to mow, leaves to rake, or snow to shovel. The roof and furnace were replaced recently, and the cost was covered by our common charges (no sudden hit to our budget). Common charges include oil heat, a pool, club house, tennis court, bball court, baseball field, a pond, and playgrounds for the kids. If you don't mind not having a backyard of your own, it's a nice way to go.

HOWEVER...

...while what we pay in taxes and common charges is equal to what most owners of single-family homes pay in property taxes alone, such charges can be pretty steep in some communities, so you have to factor that into any prospective payment. Sometimes, first-time condo buyers fail to learn the common charges until closing, and that can lead to buyer's remorse.

What was mentioned about rules above cannot be emphasized enough. Some communities are too strict, and you'll feel like an unwelcome guest; others are too lax and people take advantage. Some communities enforce rules inconsistently, depending upon which offenders are friendly with which members of your governing board; sadly, things are not always fair. Learn as much as you can about condo rules before buying, and make sure you'll find them bearable. A quick tour of the community (or visit to an open board meeting) can give you some clues.

Finally, neighbors are more important in a condo community since you'll be living so close together. We've had great neighbors, so I'm biased toward condo living. If my neighbors were trashy noisy slobs, or complainers who reported me to the board every time my son left his bike out on the porch, I'm sure my feelings would be different.

I hope you find this info helpful! Best wishes!

A condo is nothing more than an apartment with high fees. Condos are not the greatest investments. Anyone I know in a condo regrets it. Get a house and live the American dream.

 

[ArminRU]

Depends what you want. If you want to live close to Manhattan for example, there really is no other choice. If you want to live in the burbs, get a house.

HOA's are not fun, but neither are the costs of taking care of your house. HOA's are sometimes worth it, expecially in buildings where you have a gym, doorman, pool, etc.

 

[Zak57]

Rent prices are better but not exactly great either for something nice. I love Jersey but it really is something else price wise.

 

[czxqa]

We can lock in 3.5pct right now, which is one of the main reasons I might buy now. Might do the house and wait on kids for a year or two. We will have enough to live comfortably and still go out/vacation. The cost of daycare/diapers/formula/pediatrician scares me but we can wait and see about raises/promotions but not long as she is in her 30s already.

Dude, just buy the one you like better and make it work. You'll be fine. don't worry about how am I going to afford a baby, because honestly, if you sit and wait until you're financially ready, it's probably not going to happen. This is the only life you're getting, so jump in, go, and live.

 

[Knight177lb]

It depends on what your preference are, but personally, there is no way I could take an condo association telling me what I can and can't do. Plus there's a condo board and things get all political. You won't even be able to hang a Rutgers flag. If you don't have a lot of money and are worried about baby expenses, do the math and see what you can afford on your salary alone. Then buy a small house for less than a condo. Lock in while rates are low and start building equity. It doesn't have to be your dream house, just something you can afford. Down the road, if finances are better, you can expand by finishing the basement or putting on an addition.

 

[koleszar]

Rule # 1, leave the NE cut taxes by 50%

My 3,000 sqft house with .3 acres I paid 370k and 3k in annual taxes.

Oh and I get the same salary I got in NJ.

Unless you buy a Farm. We bought a 3600 sq. ft. house on 10 acres during the recession for $330k. Taxes, we're farm assessed and pay 4k. We got extremely lucky(in the sense we found the perfect place for us), but also lived in our town house, waiting for the right opportunity to buy and we knew we needed 6 acres or more for farm assessment(why pay the gov.t). We now rent the town house. Your situation, you were extremely lucky to keep your same salary. That's usually not the case.

 

[PRH_RU]

Unless you buy a Farm. We bought a 3600 sq. ft. house on 10 acres during the recession for $330k. Taxes, we're farm assessed and pay 4k. We got extremely lucky(in the sense we found the perfect place for us), but also lived in our town house, waiting for the right opportunity to buy and we knew we needed 6 acres or more for farm assessment(why pay the gov.t). We now rent the town house. Your situation, you were extremely lucky to keep your same salary. That's usually not the case.

I actually disagree my wife is a corporate recruiter. She spends her days trying to move finance folks from manhattan to Raleigh. No expectation to reduce salary.

 

[Knight Shift]

I actually disagree my wife is a corporate recruiter. She spends her days trying to move finance folks from manhattan to Raleigh. No expectation to reduce salary.

But then you are living in Raleigh, which is not Manhattan. . . . . boiled peanuts, churches and pawn shops. There is always CARY-Containment Area for Relocated Yankees. Lived in NC for 2-2.5 years over 20 years ago. Would not go back. Maybe Raleigh is better than where we lived.

 

[adamchas]

Something to consider... Check the Association's books... likely not everyone paying their fees, and legal action against non-payers can be lengthy and very expensive.

 

[koleszar]

I actually disagree my wife is a corporate recruiter. She spends her days trying to move finance folks from manhattan to Raleigh. No expectation to reduce salary.

Ok you singled out the one business which is centered in Raleigh, NC. Banking. Yes I have a friend who moved there years ago because he was in the banking industry. He couldn't afford a house here, but moved there for about the same amount of money and bought a nice house. Same with my friend who worked for Fed Ex out of Newark. Moved to Tennessee for the almost the same money.

These are specific jobs and specific moves. Banking in Tennessee pays peanuts and Fed Ex probably the same in Raleigh. You don't get to pick your destination, the job picks it for you. My brother worked for Hess out of Woodbridge till they closed. They offered him a job in Louisiana or Texas for roughly the same money. Once he visited both sites he said no friggin way. Again all examples are specific situations and not the norm.

 

[Bleed_Scarlet]

Something to consider... Check the Association's books... likely not everyone paying their fees, and legal action against non-payers can be lengthy and very expensive.

I have also seen many many condos which were not keeping appropriate reserves for things like roads or roofs or whatever - things with a fixed lifespan.

When Armageddon hits (ie road repair needed) it can get really ugly really fast with huge special assessments and then a huge raise in maintenance fees to make sure that money is held in reserve going forward

Make sure you understand the state of reserves if you buy a condo

Another important thing is how the board is structured - if the developer has a controlling stake, you can be pretty sure that things are being done to foster sales (i.e. Keeping fees artificially low now) with a time bomb down the road.

 

[PRH_RU]

Ok you singled out the one business which is centered in Raleigh, NC. Banking. Yes I have a friend who moved there years ago because he was in the banking industry. He couldn't afford a house here, but moved there for about the same amount of money and bought a nice house. Same with my friend who worked for Fed Ex out of Newark. Moved to Tennessee for the almost the same money.

These are specific jobs and specific moves. Banking in Tennessee pays peanuts and Fed Ex probably the same in Raleigh. You don't get to pick your destination, the job picks it for you. My brother worked for Hess out of Woodbridge till they closed. They offered him a job in Louisiana or Texas for roughly the same money. Once he visited both sites he said no friggin way. Again all examples are specific situations and not the norm.

I guess but I don't know a single person who has relocated here who has taken a pay cut. I work in Pharma, my wife has recruited for software and banking.

I'll take the cost of living, warm weather, and the friendly atmosphere over living in NJ any day. I loved living in NJ for 22 yrs, but financially it doesn't make sense.

 

[RUbacker]

I guess but I don't know a single person who has relocated here who has taken a pay cut. I work in Pharma, my wife has recruited for software and banking.

I'll take the cost of living, warm weather, and the friendly atmosphere over living in NJ any day. I loved living in NJ for 22 yrs, but financially it doesn't make sense.

Guess you don't earn enough then.

 

[PRH_RU]

Guess you don't earn enough then.

Nice :cry:unintelligent comment! I make plenty as a director for a top two Pharma company. Oh and I took my Boston salary with me

 

[koleszar]

I guess but I don't know a single person who has relocated here who has taken a pay cut. I work in Pharma, my wife has recruited for software and banking.

I'll take the cost of living, warm weather, and the friendly atmosphere over living in NJ any day. I loved living in NJ for 22 yrs, but financially it doesn't make sense.

Didn't know Pharma was big in Raleigh area, always knew banking was from simply walking down the streets. My wife works in Pharma here in NJ for Bristol/ Meyers and she makes a boatload. I like to bust on her that I'm a kept man.

We like it here in NJ, kind of lucked out with the farm and buying it in late 2012. Couple that with farm assessment and our taxes are real low. Plus we made the farm into a business and write all that stuff off(barns/fences/animal & fruit tree care) To top it off just 2 miles away is a Target, Shoprite, Lowe's, BJ's, Movie Theater, Walmart.

 

[RUbacker]

Nice :cry:unintelligent comment! I make plenty as a director for a top two Pharma company. Oh and I took my Boston salary with me

Good for you glad you are away from Jersey.