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Hey everyone! I've been scanning some of the threads around here for some information - it's been helpful but I figured I'd see if I could get some help/advice from someone looking at possibly being a first time homebuyer.
I moved to Raleigh about 1.5 years ago - I was living with a friend from college but he moved recently. I've been staying with another friend temporarily but have been wanting to find my own place. The rent for some of the one bedroom apartments in this area is ridiculous that I think I want to look into buying a place while interest rates are still low. I've gone to my bank and I've been pre-qualified for $250K. I'm looking for a condo/townhouse and if someone can talk me into it, maybe a house (not sure about keeping with all the maintenance it requires being a young single professional). I'm from Boston so I'd love to live somewhere urban, walkable and happening but I understand this is Raleigh and everything is so spread out here so concessions will definitely have to be made with regards to that (I am a cyclist too so if I can find a place near some greenways or bike friendly roads, that'd be awesome).
I've heard a lot about "location, location, location" -> what exactly does that mean for the Raleigh/Cary area? I work near Cary Crossroads right now on Jones Franklin Rd but I think we may be moving once our office lease is up in 2017 so that may be irrelevant to my search. I've been looking inside the beltline (though tempering expectations that I'll find anything there), North Raleigh close to 440 (North Hills/Crabtree area) and also in West Cary/Morrisville. Any other spots I should consider?
Any thoughts about a condo vs. townhouse? (or about getting a house as a single 24 yr old?) I can't imagine this being a long term investment as my circumstances may change in the future. People my age switch jobs pretty frequently (and once I get my professional engineering license in 2 years, that may change) and who knows if I will have a family or not by then.
Anything else I should consider? I'm definitely going to work with a realtor who'll have more knowledge but just wanted to get some information on the front end so I have some idea of what I want and what I should be looking for.
"location, location, location" Has many implications.
Basically, there is value going forward in a location with fewest negative compromises and most appealing attributes.
Being in an area that many people find desirable is a good location for resale, i.e., protection of your investment.
Short commute
Easy access to transportation
Good schools
Proximity to services, entertainment, and retail.
Having a good lot or unit location in a neighborhood. You might be on an interior lot, rather than on a perimeter lot backing to a highway or commercial operation.
IMO, some items are flat out "deal breakers," and others' personal wants or needs can create other deal breakers.
I don't like to see steep and odd driveways, fronting or backing to busy streets with fast traffic, electric transmission lines, very heavy plane traffic overhead, RR tracks, or other obvious environmental issues.
Ensuring a short commute can be difficult for you right now, with the possibility of an office relocation. You may benefit from easy access to good roads.
You budget will easily enable you to purchase a quality townhome in a good location. I don't generally recommend condos, unless there is a compelling reason.
You can probably get a decent detached house, with easy maintenance, and not a total fixer either. Don't discard that idea until you see what the market can offer you in areas you are considering.
Get good guidance from your lender to include how HOA dues will impact your purchase price range.
Personally, I think it is great that you are thinking about making that kind of investment as a single 24 year old. I bought my first home as a full-time undergrad. I am a finance guy and it comes down to numbers. If you think you will lose more from depreciation in the time you are there than the rent you will have shelled out, you lease. Otherwise, you buy.
I agree with Mike about the townhome over condo and about considering HOA fees. They can vary drastically between areas and play a large role. If you expect a job change in the near future, I would look at the other things which are important to you.
That may help you narrow down the areas you are looking. When you do talk to a realtor, be sure you list your "must haves" or "must not haves". That will go a long way for you both.
I'm not a realtor, but I'll add one thought: Don't do this if you're not going to live in that house for 5 years.
Renting may feel like it's expensive, but it has significant advantages. Primarily FLEXIBILITY. You can easily get out of a lease with minimal financial damage. That's not true when you own a home. I'm saying this because of your comment about getting your professional engineering degree in 2 years. Are you so sure you will stay in this area????
Other advantages for renters are no exterior or interior maintenance. That gives you lots more free time and doesn't take money out of your pocket when the a/c or dishwasher dies.
I was a happy, carefree renter from age 18-33. I could have easily afforded to buy a house when I was about your age. And I've never once regretted that I didn't. The freedom and flexibility were priceless.
I'm not a realtor, but I'll add one thought: Don't do this if you're not going to live in that house for 5 years.
Renting may feel like it's expensive, but it has significant advantages. Primarily FLEXIBILITY. You can easily get out of a lease with minimal financial damage. That's not true when you own a home. I'm saying this because of your comment about getting your professional engineering degree in 2 years. Are you so sure you will stay in this area????
Other advantages for renters are no exterior or interior maintenance. That gives you lots more free time and doesn't take money out of your pocket when the a/c or dishwasher dies.
I was a happy, carefree renter from age 18-33. I could have easily afforded to buy a house when I was about your age. And I've never once regretted that I didn't. The freedom and flexibility were priceless.
^ This.
Also, don't forget that by buying, even though your monthly payment may end up lower than rent (probably by quite a bit once you figure in tax refund on interest), you need to figure in a few not-so-obvious costs:
- Closing costs on the purchase of the new place at time of purchase (may or may not be a lot depending on your deal, but its a sellers market, so....)
- Realtor commission on the sales of the place whenever you do sell it (this is likely going to be extremely painful if you sell in 2-3 years, figure something like $15k. It won't hurt so bad if you sell in 10 years because the appreciation and avoidance of increasing rental costs would offset it. Don't count on the ability to successfully sell by owner, especially with a townhome/condo).
- Upkeep of the place itself, unexpected repairs
- Non-financial / sanity impact -- unlike an apartment, you can't get out easy if you have annoying / noisy neighbors. It's true that the owners of a TH/condo probably want to be civil and protect the value of their investment and community, but they may be renting the unit to someone who doesn't give a damn.
Even considering all those factors there may still be a very good reason to get a townhome or single family home (which as has been pointed out, you could probably afford at $250k if you think you don't think the extra maintenance of a SFH would stretch you too far). For example I have a friend that bought a townhome that's something like 1700 sqft. Why? An apartment of same size in same area would cost a fortune and he would not have a 2 car garage. It's a nice place and it's right for him, but he knew where he would likely be in 10 years.
You were pre-qualified for $250K. Is that what can you afford? Do you want to find real estate at that price? You mention you are young, so I'm sure you've looked at your salary to decide whether that mortgage matches your income.
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