Buying a home --- where will I build the most value for years to come? (Denver: school, transportation)

[illinoisphotographer]

Originally Posted by Augie Daugie

Biggest downside to a Cap Hill condo is that a lot of the units in older buildings carry an additional $300-400/mo HOA fee (or sometimes even higher). When you consider that two bedroom condos in Cap Hill start in the high $200s, your monthly is going to be pretty steep for what you get. Detached homes tend to perform better over time, but there will always be demand for housing near downtown...so I wouldn't call it suicide by any means.

We found that detached almost did better up front. I looked at a few townhouses and the pricing was near or at the same price as a SFH once you factored in the HOA fees.

[emm74]

Originally Posted by illinoisphotographer

We found that detached almost did better up front. I looked at a few townhouses and the pricing was near or at the same price as a SFH once you factored in the HOA fees.

The pricing will of course be very specific to individual homes but it's kind of foolhardy to compare the cost of a SFH without also calculating in the things that will be covered by an HOA fee. Some things that might be covered such as lawn moving and snow removal, you can choose to do yourself and not incur those costs, but saving up on a regular basis for things like a new roof or new cement or exterior painting should be factored in to the cost of homeownership. The general rule of thumb is to expect to pay 1-2% of the purchase price every year in maintenance.

And there are other costs, like water, sewer, and trash collection that homeowners may have to pay for individually but which are included in an HOA fee.

I'm not suggesting that people buy a townhouse instead of a single family if they prefer a single family. I'm just saying that if you make a statement that the costs are almost the same, then all the costs should be factored into the equation.

[tcbelvis]

Originally Posted by DenverBrian

A difference which makes no difference in the context of this thread.

OP is a biker. Commuter rail has level entry. Hugh difference not struggling to carry a bike up steps. If I were a biker I wouldn't even consider light rail. If one works downtown and wants to bike from Union station commuter rail is a much better option than light rail. The walk at Union Station to switch between commuter and light rail is lengthy, it is also a factor to consider when deciding which line to live along.

[DougStark]

OP, put your money in the stock market--broad index funds. Forget speculative real estate investing for now. Metro Denver is already overpriced.

[daprara]

the time to buy in Denver was back 2013.
I would not buy at this point, save your money till the next recession.

[illinoisphotographer]

Originally Posted by emm74

The pricing will of course be very specific to individual homes but it's kind of foolhardy to compare the cost of a SFH without also calculating in the things that will be covered by an HOA fee. Some things that might be covered such as lawn moving and snow removal, you can choose to do yourself and not incur those costs, but saving up on a regular basis for things like a new roof or new cement or exterior painting should be factored in to the cost of homeownership. The general rule of thumb is to expect to pay 1-2% of the purchase price every year in maintenance.

And there are other costs, like water, sewer, and trash collection that homeowners may have to pay for individually but which are included in an HOA fee.

I'm not suggesting that people buy a townhouse instead of a single family if they prefer a single family. I'm just saying that if you make a statement that the costs are almost the same, then all the costs should be factored into the equation.

It really depends on how long you plan on staying in a townhouse. I know a few coworkers and a few relatives who bought townhouses when their kids moved out and will probably stay there until they retire in 10-15 years. They didn't need the space and will probably cash in on their HOA fees.

On the other hand, if you know that a townhouse will only be an intermediary step for 5 years or so before buying a SFH, you're just throwing money at an HOA and won't get much out of it. Plus, on a $300k townhouse, you're looking at $18k in transaction fees to sell it. That alone is $300/month over the 60 months. Even if you brought that out to 10 years, that's $150/month in transaction fees.

That extra $250-300/month in HOA fees ends up being an additional $50k or so in buying power.

I totally get that there are pros and cons to both. But if the deciding factor is money, SFH are generally going to be a better investment with better ROI and you get the benefit of being able to personalize the house to your liking and future buyer's likings.

[Willy702]

Originally Posted by DougStark

OP, put your money in the stock market--broad index funds. Forget speculative real estate investing for now. Metro Denver is already overpriced.

Yeah cause the stock market isn't overpriced right now

[WhatTheFox]

Originally Posted by Willy702

Yeah cause the stock market isn't overpriced right now

While I agree that the stock market is overpriced as well the long term view on a broad index fund is a much safer bet.

[emm74]

Originally Posted by DougStark

OP, put your money in the stock market--broad index funds. Forget speculative real estate investing for now. Metro Denver is already overpriced.

Originally Posted by WhatTheFox

While I agree that the stock market is overpriced as well the long term view on a broad index fund is a much safer bet.

Except of course that you can't live in an index fund. Rents here are not so low that it's possible to invest large sums in lieu of a mortgage once the rent is paid. Of course there is no guarantee with real estate but at least there is some possibility of a return on your money when you buy a home, even after the expenses of home ownership. I always figured that even if I just get back out what I've put in, and don't get a lot of appreciation, that's still more than you get when you put that same money into paying rent instead. Plus since I knew I was buying for a fairly long time period (15+ years), the odds were pretty good that the value would increase over time.

[SirJohnHarington]

Originally Posted by jweb29

So there are lots of factors involved with such a thing.

Where is the next great place to live and build value in denver? I am a mid 20s single guy. I'm not too afraid of the "ghetto" (I live a block off colfax and race which some people consider SO crazy)

I'd want to get a roommate for a while to make building equity easier. This would mean living in a place that a roommate would actually want lol.

I'd like to either be close to a lightrail to commute to denver (<30 mins if possible) (arvada.... looking at you! that lightrail is coming soon!), OR I'd like to bike (bike to lightrail and/or bike to work downtown).

Looking at townhouses/houses. Condos meh.

I don't care for the nicest neighborhood *today*. But I would love be pleasantly surprised to see everything gentrified out.

Under 300k range!

I have thought long and hard about this... I think the best bet is to use the money you were going to use for a down payment to go to medical school. Don't become a GP, become an orthopedic surgeon (median pay $450k). Then you will easily be able to afford a home in Denver.

If you don't want to go to medical school I would suggest looking at the eastern part of Lakewood. You can be in the foothills in 15 minutes and Denver is right there.