Home/Condo Buying Advice (Austin, Round Rock: apartment, rent, HOA fees)

[deadcoder]

Hello everyone,
We have been living in Austin for a while now(4+) and we are now thinking about buying a house or condo. We figured out that in last 4 years, we paid around $50K+ in rent We are also considering this house/condo as an investment as Austin housing marking is growing pretty fast. Before going into much details let me share my current financial situation:

-> We are two (recently married, me 30), no kids and not planning to have kids in next 2 years.
-> My wife work part-time, so I'm not considering her as a source of income
-> I make $120K with yearly bonus and stocks.
-> Saving 10-15K - We don't have much as a down-payment

This is what we want to have in the long run (if I stay in Austin at that time):

-> A house with 4/5 bed rooms + 3+ bathrooms in good school area (Austin, Round Rock, Cedar Park), preferably 2900+ sq ft
-> Austin traffic is getting worse every single day , so I'm assuming I need to spend a lot of time in commute in future, so it doesn't make sense if I dream to live some where which is closer to my work place

We see that house with the above requirement in good school district have a price tag of $380K - $450K . So if I don't pay enough in down payment, then the mortgage might come around $3.5K+ which is too much for us now.

Because of that, we are thinking about buying smaller house or condo (definitely new) where I need to pay < $2.5K in mortgage for now and sell it later as my family grows (after 7-10 years).

We checked some Milestone's properties(Cedar Park Villas, The Arbors at LakeLine, Woodford Gardens, etc) in Cedar Park areas (close to Lake Line mall) and we liked them. By do not have any experience in housing market/realtor/builders stuff. We saw that they have some 2 bed room condo (mortgage comes in 1400-1500 range) and 3 bed room condo (mortgage 1500-1600) with HOA $195. They also have some homes which has $280-300K price tag and those homes are enough for our needs now.

We were also thinking to buy the 2 bed room condo (around $190K) and try to pay that within 15 years. As market is good, we should expect a strong profit when selling this condo after some years or even renting out

So considering our situations, what should be the best approach for us now in buying new home/condo? Should we invest in a condo for now? Or a home with <$300K? Or should we wait some years to save some more $$$ and just buy the dream home?

Any advice or suggestions will be highly appreciated.

Thanks in advance.

[10scoachrick]

Don't forget the tax bill on that new place. We just got ours on the condo we bought last year for $212k...over 6 grand in property tax!!! Sure glad we made the move AWAY from the $450k house!

The Milestone properties are interesting; but I think they are fetching top dollar for what they are. I surely would not expect significant appreciation but wouldn't think they will lose value, either(unless the property isn't well run or maintained).

If you've been renting for approx $1k a month, the mortgage and taxes on a 'dream home' will wear you OUT! Those $200 a months fees aren't going to help any, either. IF you feel you MUST buy now(you're about two years late for the right financial picture), buy the least expensive thing you are comfortable with. No rule says you will NEED a bigger place in the next few years...I'd put that on hold.

[deadcoder]

Thanks for your response

We are paying around $1300-$1400 in rent for a while now. These days, its hard to get a decent 2-bed room apartment in Austin with $1k rent

Just wondering, do you know any other builders who has condos in that price range? I checked in Trulia/Zillow and didn't find any.


Thanks again.

Originally Posted by 10scoachrick

Don't forget the tax bill on that new place. We just got ours on the condo we bought last year for $212k...over 6 grand in property tax!!! Sure glad we made the move AWAY from the $450k house!

The Milestone properties are interesting; but I think they are fetching top dollar for what they are. I surely would not expect significant appreciation but wouldn't think they will lose value, either(unless the property isn't well run or maintained).

If you've been renting for approx $1k a month, the mortgage and taxes on a 'dream home' will wear you OUT! Those $200 a months fees aren't going to help any, either. IF you feel you MUST buy now(you're about two years late for the right financial picture), buy the least expensive thing you are comfortable with. No rule says you will NEED a bigger place in the next few years...I'd put that on hold.

[centralaustinite]

Use Austin Home Search to find homes, dump Zillow and Trulia, their listing are often out-dated (already sold or pending when they appear) and since Texas is a non-disclosure state, their historical data is often wrong.

[10scoachrick]

Those Woodford SFH units are spendy; but I think that's the going rate. I might ride over there today and have a look. Very convenient to the Lakeline Mall area, Brushy Creek Trail and the Y.

I'm not aware of anyone doing what Milestone is doing with 'more affordable' new construction in this area. We considered a Scott Felder home that was originally planned to 'start' in the low $200s but by the time they actually began the project, the starting price was well north of $300k !!!

Good luck!

[CarnivalGal]

As an aside, you will need a lot more income to comfortably afford a $3,500 mortgage. We make twice that and I couldn't even imagine a $3,500 mortgage. Don't forget to factor in home maintenance, taxes, etc. And kids are expensive. Don't forget to factor that expense in since you are planning to have them. On paper, it may seem doable, but in real life, it would be very tight.

[AustinGuy]

Originally Posted by deadcoder

Hello everyone,
We have been living in Austin for a while now(4+) and we are now thinking about buying a house or condo. We figured out that in last 4 years, we paid around $50K+ in rent

$50k over four years is really not that much money for shelter. You'll most likely burn at least that much money on property tax, mortgage interest, maintenance, and potentially HOA fees by owning a condo/house.

The last few years have been a great time to own a house in Austin due to the rapid appreciation which has offset the above expenses, but that isn't always the case.

[deadcoder]

Originally Posted by 10scoachrick

Those Woodford SFH units are spendy; but I think that's the going rate. I might ride over there today and have a look. Very convenient to the Lakeline Mall area, Brushy Creek Trail and the Y.

I'm not aware of anyone doing what Milestone is doing with 'more affordable' new construction in this area. We considered a Scott Felder home that was originally planned to 'start' in the low $200s but by the time they actually began the project, the starting price was well north of $300k !!!

Good luck!

I see! Thanks again 10scoachrick for your input.

Originally Posted by mm57553

As an aside, you will need a lot more income to comfortably afford a $3,500 mortgage. We make twice that and I couldn't even imagine a $3,500 mortgage. Don't forget to factor in home maintenance, taxes, etc. And kids are expensive. Don't forget to factor that expense in since you are planning to have them. On paper, it may seem doable, but in real life, it would be very tight.

Thanks for your response. So you are saying, with a income of $15000 (after tax) per month, still unable to pay $3500 in mortgage comfortably? It doesn't make much sense to me. I have several friends who make much less than that but paying their 3000-3500$ mortgage comfortably for a while (they have kids as well). $250K per annual is considered a very good income in Austin and I have seen folks with that income bought $400-500K home several times.

But anyway, what I was trying to say, I do not have any plan for buying that bigger house at this point. My question was, what should be the best option if I want to pay <2000$ in mortgage (considering no kids at this time, not the final home, etc). Thanks again.

[deadcoder]

Originally Posted by AustinGuy

$50k over four years is really not that much money for shelter. You'll most likely burn at least that much money on property tax, mortgage interest, maintenance, and potentially HOA fees by owning a condo/house.

The last few years have been a great time to own a house in Austin due to the rapid appreciation which has offset the above expenses, but that isn't always the case.

Yes, I know that . But spending $ in rent means just throwing out $. We are looking for an option where the same amount or more can be utilized in a much better way. Like spending in a short term smaller home or condo which we will sell again when moving to a bigger home after 10-12 years.

[PittsburghAustin]

Don't forget if you put less than 20%, you also have to add on monthly mortgage insurance which most lenders require.