Buying a second house/condo in a city (cheapest, investment, mortgage)
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I thought I would ask this here since it is a general real estate question... looking more for general experiences and broad advice, ideally based on the experience of others.
My question is whether this is a good idea, makes sense, what to consider and look out for, etc.
I'm considering buying a property in a downtown area of a mid/large size city (Sacramento, CA). I live about 30-40 min drive outside the city in a rural area (where I own a business). I love my current home and want to keep it (I have a mortgage but I could pay it off anytime).
The second place would be a small house/condo on the grid in the city, and I would essentially live both places year round. There are times during the year where I would spend more time in the city, perhaps more than just weekends for instance. But my intention is to look for a regular weekend place pretty much year round. There are times when I need to be around a lot to manage the business, and others where a few days or even more I could be a long commute length away without dramatically affecting things. It's within driving distance, after all.
The reason for doing this would be that I really like the city and the specific area. Being relatively young (early 30s), gay, and single, and more importantly still feeling young... I would like to have the best of both worlds if I can swing it.
So... condo vs house? Other issues to consider? Is this a crazy idea? I hate the idea of HOA fees on a condo. I only need something small (as in 700-800 sq ft). I guess I'm just fishing for experiences here... I know it's not all that sound from an investment POV, but for me it's a quality of life issue. Are these kind of things overrated or regretted by people who invest in weekend homes or nearby "vacation" homes?
I know all sorts of people who have had two homes. Some own a cottage or cabin they use on holiday. Others own homes in two places they work. Some own homes in the north as well as the south and follow the weather. Others have a home base in say upstate New York, but also an apartment in NYC where they spend weekends at the theater and so forth.
One has a home in three cities. Two have small apartments that she uses from time to time while she rents out the rest of the house. She lives in the third house for the most part. I believe she is getting ready to sell it and move but who knows?
If you can swing the payments and upkeep on both places, I say go for it.
I would recommend you rent for awhile. This will give you time to figure out what area of town is the best fit. Once you figure that out, you can wait for a good deal to come along.
You may find over time that you are not spending that many weekends in town to warrant the time and expense.
Or you may find you love it.
If you decide to buy a condo, I would do a good close check on the management and finances.
Remember the higher interest rate for second home. Since you say you could easily pay off your current home, think about paying one off and having the other as a primary residence. Either place may be reasonably explained to a lender as a primary home...city business/social getaway or more rural getaway.
Remember the higher interest rate for second home. Since you say you could easily pay off your current home, think about paying one off and having the other as a primary residence. Either place may be reasonably explained to a lender as a primary home...city business/social getaway or more rural getaway.
if the numbers work, you could refinance your current home and pay cash for the condo. I like the renting suggestion. I could see where, like all good ideas, it doesn't really work out the way you envisioned it. In that case, at the end of your lease you give your LL the keys and you're done with it. If it does work out, then you look for a condo to buy then.
Thanks for the replies. Yeah, someone else told me to rent too for a while. I actually lived in the area for about a year before I moved to my current location, but perhaps it's still a good idea to see if it fits where I'm at in my life now. I do wonder if things will be different than I expect once I'm spending more time there... or not. Good way to find out.
If you're looking at a Condo make sure you know what the Association fees are. Some association fees are very high - say $400/month. Well that equates to about $80,000 in house. This means a $320k condo is equivalent to a $400k house. There's no upkeep with a Condo. If you own a stand alone home you will need to take care of the outside and probably hire landscapers etc... This will be a cost.
Folks near me for pied a tier type weekend condos they often pick the smallest unit in building or unit with no view on low floor in a building loaded with amenities and common areas.
Many condos assign your share of building based on things like size of unit, floor, view etc.
One fancy condo development not far from me is beach front, has a huge pool, doorman, huge grounds, gym, tennis courts and a big party room you can use and a fancy lobby to hang out in. But maint is based on your unit. The Penthouse could pay $2,000 a month maint while a small studio could pay $350.
In that case you are just using place as a bed, you dont live there. Get the smallest and dumpiest unit with cheapest maint.
My old boss actually owned a tiny tiny coopin manhattan in back of the building on ground level facing a brick wall and he was rich. Maint was next to nothing. But he only used it when he worked late in city or wife and him went out to dinner and a play in Manhattan. Building had a rooftop, area with BBQ and a big lobby and a gym he all got to use
Did not need the room as he had a big primary home in surburbs and he left no junk in unit. In that case the condo/coop works out better than house as you have no maint at all to deal with, you get full run of common areas and even if they try to do an assessment for a new roof or gym you pay a very small share of assessment and get equal use.
I thought I would ask this here since it is a general real estate question... looking more for general experiences and broad advice, ideally based on the experience of others.
My question is whether this is a good idea, makes sense, what to consider and look out for, etc.
I'm considering buying a property in a downtown area of a mid/large size city (Sacramento, CA). I live about 30-40 min drive outside the city in a rural area (where I own a business). I love my current home and want to keep it (I have a mortgage but I could pay it off anytime).
The second place would be a small house/condo on the grid in the city, and I would essentially live both places year round. There are times during the year where I would spend more time in the city, perhaps more than just weekends for instance. But my intention is to look for a regular weekend place pretty much year round. There are times when I need to be around a lot to manage the business, and others where a few days or even more I could be a long commute length away without dramatically affecting things. It's within driving distance, after all.
The reason for doing this would be that I really like the city and the specific area. Being relatively young (early 30s), gay, and single, and more importantly still feeling young... I would like to have the best of both worlds if I can swing it.
So... condo vs house? Other issues to consider? Is this a crazy idea? I hate the idea of HOA fees on a condo. I only need something small (as in 700-800 sq ft). I guess I'm just fishing for experiences here... I know it's not all that sound from an investment POV, but for me it's a quality of life issue. Are these kind of things overrated or regretted by people who invest in weekend homes or nearby "vacation" homes?
How are you on retirement savings and emergency funding?
How are you on retirement savings and emergency funding?
Good point.
Our old neighbors had a condo they rented out via a management company. It didn't cover the whole cost, but a good portion of it and they got to spend time there as well.
Hmmm?
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