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Old 01-01-2014, 01:04 PM
 
3 posts, read 3,934 times
Reputation: 11

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I'm 24 and I'm at the point in my life where I'm tired of paying rent. I am working 30 hrs a week and going to school part time for computer science. My goal/hope is to buy a a condo in the range of $100,000 - $130,000. I'm looking for something close to campus because I want this to become an investment property once I start my "big girl" career and I want to rent it out eventually.

So here are the other numbers:

Income/year (30 hours a week):
*$27,000

Debts:
*Car - $9000
*Student Loans - $25,000 (will be more after completing my second degree)

Savings:
*Emergency - $5000
*Extra - $11,000

My student loans will not be due for three years. Until recently, I had planned on putting that extra $11,000 into paying off my car and paying down my student loans. Then I started thinking about paying rent vs. a mortgage. Another factor is that my boyfriend would pay me about $350 a month for rent, and if times got hard, I would rent out the second bedroom for $400 a month.

Would I even qualify for a loan? Should I pay down debt before taking this on, or is it a good investment?

Thanks for reading!

Last edited by harg6446; 01-01-2014 at 01:15 PM..
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Old 01-01-2014, 01:55 PM
 
Location: Northern Colorado
718 posts, read 1,986,661 times
Reputation: 820
Thinking of your future and purchasing your first home is a great step. New mortgage rules are coming on line beginning January 10 so the rules are changing a bit. In general, the lenders would like to see no more than 43% of your monthly income going toward your housing expenses, which include your mortgage principal, mortgage interest, insurance, property taxes, HOA dues, and mortgage insurance, if applicable.

Your best bet would be to get in touch with a lender who could advise you. Most real estate agents can point you to a few different lenders with whom they work who could advise you about whether you qualify and if so, for what loan program you qualify.

Owing has many advantages over renting, if the time and conditions are right for you. Good luck with your home ownership quest!

Mike Weber
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Old 01-01-2014, 04:54 PM
 
3 posts, read 3,934 times
Reputation: 11
Awesome! And thanks for the info you gave over PM as well. I do need to start talking to people, I just kind of wanted to get a feel for things online first. My dad has offered to sign with me, but I would rather try to do this on my own if I can. From some feedback and research, I have heard it can be difficult renting out rooms or condos after I move out. This just seems strange to me because of my current living situation. I'm living in an apartment complex that is managed by a property management company hired by a private owner. To my understanding, all of these complexes are privately owned and almost all are rented out. One across the street from me is on sale now that I'm looking at and I just find this strange. I suppose it varies depending on the HOA?

EDIT: One of the condos I just looked at close to CSU is actually suggesting that the buyer rent out a room so the mortgage payments will be less. Now I'm confused! I probably need to talk to someone... thanks for the references.
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Old 01-01-2014, 09:31 PM
 
Location: Northern Colorado
718 posts, read 1,986,661 times
Reputation: 820
In the current market, it is not hard to rent a property but that can always change. Also, don't forget that Fort Collins has an occupancy ordinance that does not allow more than 3 unrelated parties to live in the same home. If you decide to have a property management company manage your property after you move out, it will cost you about 10% of the rent, but they can screen tenants, collect rent, and coordinate repairs.
Having a roomate helps with the bills, but unless you have a history of renting to someone the lenders will usually not allow the rental income to apply to your income when qualifying for the mortgage.
Most HOAs do not have a problem with you renting a room for a term of months, but many do not allow nightly or weekly vacation type rentals.
Mike Weber
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Old 01-17-2014, 04:36 PM
 
Location: Southern California
4,451 posts, read 6,801,295 times
Reputation: 2239
It can be a good investment depending on how much you can rent the place for. Having a high % of rental units will create a problem when financing. Create a budget to see how much you can afford. Your high monthly debt will require someone with much higher income to qualify for a loan. In the future be very careful who you rent out to.

What are home prices compared to condos?
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