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I am close to retirement age, I just get the new job in Ohio and plan to stay in this area for 5-6 years then will move to Florida for good .
Since all our children no longer living with us, in the beginning, I think we will rent an apartment. Cost of renting about $750-$850 per month not includes utilities.
However, there are some condos for sale, price about 55 to 60K (shortsale deal). Property tax $1,200 and HOA $90 per month.
1. Renting: I will pay between 50 K to 60 K
2. Buying: I will pay total around 12-K for tax and HOA. I will pay cash for the condo, there for no mortgage
Please tell me which way I should go ? Renting or buying. I made the decision that I will not pay more than 55K for the condo.
I am close to retirement age, I just get the new job in Ohio and plan to stay in this area for 5-6 years then will move to Florida for good .
Since all our children no longer living with us, in the beginning, I think we will rent an apartment. Cost of renting about $750-$850 per month not includes utilities.
However, there are some condos for sale, price about 55 to 60K (shortsale deal). Property tax $1,200 and HOA $90 per month.
1. Renting: I will pay between 50 K to 60 K
2. Buying: I will pay total around 12-K for tax and HOA. I will pay cash for the condo, there for no mortgage
Please tell me which way I should go ? Renting or buying. I made the decision that I will not pay more than 55K for the condo.
Thank you for your help
My advice would be to buy, but here are some pros and cons...
Pros... When you rent, you are paying for someone else's mortgage and can't ever recoup any of the money that you've paid. If you buy in the price range that you're discussing, even if you have to walk away from the property, you aren't paying any more out of your pocket than if you were renting. However, the chances of you having to just walk away and not get anything out of it at all, doesn't seem to be realistic... even in this market... Even if you had to sell quickly and had to price the property less than what you paid or if the market fell further than where it is now, you would still be able to at lease recoup part of the funds that you've put into it. However, even in that case, you would still have the option of renting this property out to someone else if you felt that would be a better option to selling at a lower rate than what you paid for it.
Cons... Well, with everything that I've mentioned above, there really doesn't seem to be too many cons in buying vs. renting in this situation. The only thing that I can think of is the unknowns. Being a property owner means that you take on all the responsibilities of something going wrong with the property. What happens if the pumbing or electrical goes bad? Can you still afford to make the repairs. There could be many things that go wrong that you wouldn't be responsible for as a renter.
Just a few other things to consider... Don't forget about the cost of homeowners insurance in your calculations. And please, please do your homework... you still want to make the right decision about what property to buy. Try to think about how attractive this property will be to someone else in 5-6 years. I've heard some many times about someone buying a property that they really liked as an investment, but it wasn't something for everyone... if may not have had the right flow or maybe it was even just the paint schemes... either way, you should take this into consideration as well.
Thank you very much for the suggestion.
I want to make it clear that I do not intend to buy it as an investment.
An other question: the listing price of the condo is 69K. It has been on the market for more than a year. It own by the bank since the previous owner passed away last year.
Based on the record in Zillow.com, the previous owner paid 84 K for it in 2009. The listing price was reduce twice and now it list at 69K
Do you think my max offering around 55 K is reasonable ? I plan to make an offer at 50K first.
1) condo/hoa situations are the worst even if you plan to remain forever
(consider this point when going to FL too)
2) your time line to sell and move on is too short to be a buyer of any sort
3) you have very little control over that projected time line (crap happens)
Hold onto EVERY penny of savings you have.
Rent for the duration of your time in OH.
Pay as you go; rent cheap and save. Save a lot.
I had a very similar situation - had to move for work, planned on staying 4 to 5 years, retiring and moving back. We bought, but in hindsight wished we never had. Lost 5% on the house, plus the RE commission when we sold. Took us 14 months to sell, which was probably the worst part of it. Condos do not appreciate as well as single family. I would not count on making ANY money on the deal and probably losing some. I say rent.
I am definitely not in the camp that says "All condos are bad / all HOAs are evil." I live in a healthy HOA community and know of many other good ones.
That said, I would recommend that you rent in your situation. I'd bet that most of the bargain-priced condos you are seeing will have hefty special assessments and other challenges in the next few years. And I agree with MrRational that your timeline is too short to buy.
Well, I do not count to make any money on it either.
My thinking is this: Buy it cheap, living for 5-6 years, if I can get 100% money back that's good, otherwise, reduce the price and get rid of it.
I plan not to pay more than 55K for it and since it sold for 84 K in 2009, I hope that I will not have any problem 5-6 year from now for something like 40-50K
The cost of renting for that period around 50-60 K, so even I sale the condo for 30 K, I still ...make some money
Money aside, please don't discount the value of "Quality of Life" aspects of your decision. Condos and townhouses are the right choice for many and a terrible choice for others, depending on your temperament and expectations of your community environment.
Anytime I represent a prospective buyer that is considering buying a condo or townhouse, I strongly recommend that they read my educational series on how to evaluate an HOA. I can't post the link here but if you are interested, you can find my website address in my C-D profile.
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Buy it cheap, living for 5-6 years, if I can get 100% money back that's good, otherwise, reduce the price and get rid of it.
