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Condos appreciate less than lone standing houses...
Not necessarily. Oceanfront condos in SoFla are appreciating faster than single-family houses inland.
Quote:
Originally Posted by Jeo123
In general, I'm not denying that, but that's also probably because there are simply more houses. Overall, most appreciation is relative to price.
Obviously exceptions abound based on market. I bought a condo a 1.5 years ago and it's gone up in value 12% already. I could point to plenty of houses that haven't done that well just as easily as you could probably point to houses that have beaten it.
I can beat that.
I bought a condo almost exactly two years ago for a little over $300k. Four identical units are on the market right now for between $557k and $599k, depending upon the floor they're on. The three most recent sales were $550k, $555K, and $590K. So I've made roughly a quarter of a million dollars on a $60k cash outlay in two years.
You must have not read the 27 pages of discussion.
I have and I think it's a sick joke that so many
people are ok with throwing away their hard earned
cash renting instead of owning their roof outright.
I have and I think it's a sick joke that so many
people are ok with throwing away their hard earned
cash renting instead of owning their roof outright.
Well then you have read their reasoning. Try to respond to that instead of posting a blanket statement.
I drove my friends crazy for years going back and forth on the rent versus buy decision. I was renting a 1 bedroom in a luxury highrise. But in the DC area where I'd lived for 7 years knew quite well that if I bought a house all those amenities would be gone, where I'd have to purchase.
I finally bought a single family home in the DC area in 2003. The housing market was a crazy rocket....with buyers offering incentives like wine, even a car, free rent backs, escalation clauses to top any other bid, etc. There were newspaper articles about couples who had lost bid after bid.
I just wanted in on the upside. I saw it strictly as a money/investment decision. And friends said it's also a lifestyle decision, it's not just about the money. I only even considered buying because while indeed -- I was saving cash -- the growth on that cash/money market and even my mutual funds wasn't keeping up with the 'equity' in co-workers' homes.
After I bought, for years, I did a dollar for dollar -- PENNY for PENNY -- net out of pocket comparison of gain to see whether FINANCIALLY the house was the best move.
Financially: I cut my 401 K from maxing out contributions down to 5%.....my 'cash savings' that I HAD been saving also was cut, to account for a higher mortgage payment than rent. Being single with no kids and no tax deductions, I did pick up being able to deduct the home taxes and mortgage interest, and other things I couldn't before.....but still.
I had to buy tools and garden hoses and sprinklers, and an untold amount of things I didn't need in an apartment. My commute got longer so there was more money for gas, more miles on my car (those things cost as well). And of course I bought furniture, and curtains, and I remodeled. Of course some of that I didn't HAVE to do. I wanted to. It just wouldn't have happened if I'd been in an apartment. And I also spend money I don't need to on my neighbors who abut my property. I call it schmooze gifts. To keep neighbors happy, and not really beholden, but I know they look out for me and my place, and would help me out. I think that "investment" pays off. The one thing I knew from just living life -- is that neighbors can make your life a living hell. And that's one thing in an apartment...but a whole 'nother level when you've bought a house.
Eventually I stopped doing the dollar-for-dollar, penny-for-penny calculations to see if I'm 'ahead' of if I'd just stayed in an apartment. On the face of it all I did was shift my investivg from mutual funds to the house equity. At this point I don't even care. I've GAINED in the enjoyment of being able to have friends stay over, being able to 'entertain.' I got interested in gardening and landscaping. When I sell, I'll get back in equity whatever I get back. I may be romanticizing things but I do think I've enjoyed the home at a higher level than I did my apartment. As my friends rightly said it's a different lifestyle...once you get to put your stamp on a house the prism can change.
To be honest I don't THINK I'm ahead. On remodeling, maintenance, furniture, tools, and other non-necessities, plus the increased car gas, miles on car....I know I've spent 100K or certainly will have by the time I sell 12 years from now at retirement. So I'll have to make that up to break even given that I was NOT saving the cash/investing like I had been.
My thoughts had been..save cash and invest and have 300K in money.....or buy a house, sell after 20 year and get 300k in equity, it's still 300K in the end. I do know you have to take into account what the 'investment COST' to GET that 300K is...but I just can't manage the intricacies that calculation right now in my life. So it will be what it will be.
That said, I had an aunt who was a lifetime renter, due to her job, a home just wasn't feasible. And I can definitely see the appeal. It's not like i was UNhappy in my luxury highrise 1 BR apartment.
I finally bought a single family home in the DC area in 2003.
To be honest I don't THINK I'm ahead.
My thoughts had been..save cash and invest and have 300K in money.....
or buy a house, sell after 20 year and get 300k in equity, it's still 300K in the end.
I do know you have to take into account what the 'investment COST' to GET that 300K is...
but I just can't manage the intricacies that calculation right now in my life.
So it will be what it will be.
One More Time:
The decision MUST include the soft values of lifestyle as well.
Even if you have the rock solid job situation that allows for the long term financial
commitment of a mortgage unless you NEED the yard and the suburban locale because of
schools for kids, space for dogs, neighborhood pools, or other similar lifestyle matters
then wtf do you want to live out in Leave It To Beaver Land?
The other consideration is to not confuse architecture style with ownership style.
While MOST condominiums are really high rise apartment houses... many aren't.
That's kind of why I like buying a condo. Benefits of a payment to cover most of the "renting" related maintenance costs, but you get the ownership benefits of appreciation, tax benefits, and reduced costs once fully owned. Seems to me like the best of both worlds.
Condos are exposed to the SAME risks of owning a house, but with potentially more risks in terms of losing value on the Condo as well as the association fees increasing due to things beyond your control such as a neighbor around the corner (but in the same complex) burning down something. The Association would cover it and increase the Association fees across the board. In addition, you are limited to the rules of the Association in terms of your lifestyle within The Condo.
A Condo takes all of the risks of buying a House and turns them UP about 5 notches.
.....I finally bought a single family home in the DC area in 2003....After I bought, for years, I did a dollar for dollar -- PENNY for PENNY -- net out of pocket comparison of gain to see whether FINANCIALLY the house was the best move...... I cut my 401 K from maxing out contributions down to 5%.....my 'cash savings' that I HAD been saving also was cut, to account for a higher mortgage payment than rent. Being single with no kids and no tax deductions, I did pick up being able to deduct the home taxes and mortgage interest, and other things I couldn't before.....but still.....I had to buy tools and garden hoses and sprinklers, and an untold amount of things I didn't need in an apartment.........To be honest I don't THINK I'm ahead.
Your story is what I have been preaching this entire thread. When you do the dollar per dollar, as well as quality per quality analysis, MOST of the time it's just better to RENT unless you want to invest in Real Estate Equity. If you want to invest in Real Estate Equity, it's like taking money from some other type of investment (a business, mutual fund, whatever) and putting it into the house in the form of additional repairs, more uptake, more appliances, more this and more that.
All this is FINE if you want to say in 20 years here's this house that I bought for $100,000 that's now $150,000 (without telling people that you invested another $60,000 into that house over those 20 years in repairs, uptake and new appliances which means you are technically at a LOSS) with about $30,000 in cash sitting in the bank.
But you could also say in 20 years that I've stayed in 5 different rental units across the country, with my Employers assisting with moving costs, and I have $225,000 sitting here in the BANK in liquid cash due to keeping money within an account and allowing it to compound/grow.
Who is in the better position after 20 years? All of this depends on the situation of the individual, but you have majority of the time (or for the politically correct SOME of the time) where buying is just NOT a good deal over renting.
Renting gives you:
- Mobility, freedom to move if better opportunities are in other places of the country or outside of it.
- Mobility, freedom to move if the place you are staying in goes to hell.
- Mobility, freedom to move if the neighbors and area around where you stay goes to hell with a bunch of Tyqueshas with 5 kids from 5 different thugs moving in, destroying and terrorizing the neighborhood.
- Mobility, freedom to move if your income changes and you need to downsize where you stay to save money on housing costs.
You LOSE all of these benefits when you Own. Plus, for those talking about the tax incentives, how about you just start a Home Based Business? Doing so allows you to take a number of personal expenses and convert them to business expenses, allowing them to be used as business deductions. This includes a portion of the amounts you pay in relation to your apartment, in which you would state that a portion of it is used to conduct business "at home".
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