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Posted by Slain on August 7, 2007, 10:27 am
I am a bit torn between the choices of a single family home versus
buying a townhouse. The choices I have: A single family home is prices
at about 279,900. But it is in a bad shape and to get it to where I
want, I would need to put in about 40k.
A townhouse condo which is a end unit prices at about 239,900/-. It is
bank owned, has had water damage but the bank is fixing all of it.
I plan to put in a offer for about 225k on the house so that I am not
burdened by the cost. I hope to procure the condo too at about the
same price.
We plan to move in about 4 years, due to reasons like going back to
school. Hence, though we like the concept of a house much more (due to
our lifestyle and interest in doing / fixing things) the condo/
townhouse seems a better option in terms of resale and a quick
turnaround.
Could people here, throw their ideas and thoughts on the same?
Do you think the condos will be more in demand in the future on
account of baby boomers who would want not to have to deal with the
menace of maintaining a home?
With the market expected to bounce back around 2010 -12, what would
you call as a better investment?
The house is in Salem, while the condo is in Windham, NH. The taxes
are about the same - $4000.00, except that the condo has a condo fee
of about $250.00
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Posted by Elle on August 7, 2007, 11:44 am
Could you state why an apartment is unacceptable for this
four-year period? For one thing, as a general rule of thumb,
the transaction costs of buying and selling tend to argue
for renting unless one stays in a house for around five
years.
snip for brevity
> With the market expected to bounce back around 2010 -12,
> what would
> you call as a better investment [house or condo]?
Which market? Stocks or housing?
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Posted by Elle on August 7, 2007, 4:35 pm
> For one thing, as a general rule of thumb, the transaction
> costs of buying and selling tend to argue for renting
> unless one stays in a house for around five years.
Oops, possible bad on me. Discount real estate buying and
selling services are surging in some parts of the country.
So transaction costs might be way down compared to the past.
Bear in mind that some states, bowing to the realtor yada
lobby, have been successful at disallowing discount
services. If such "on the cheap" services are not available
where you are, my comments above apply. Run the numbers
(transaction costs of buying and selling, home insurance,
prop taxes, upkeep vs. renting), and it will be clear
whether it's a borderline situation or not.
Still, for a four-year time period, without any clear
financial advantage, the hassle of buying and selling to me
argues for renting.
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Posted by Sandra Loosemore on August 7, 2007, 12:52 pm
> I am a bit torn between the choices of a single family home versus
> buying a townhouse. The choices I have: A single family home is prices
> at about 279,900. But it is in a bad shape and to get it to where I
> want, I would need to put in about 40k.
> A townhouse condo which is a end unit prices at about 239,900/-. It is
> bank owned, has had water damage but the bank is fixing all of it.
>
> We plan to move in about 4 years, due to reasons like going back to
> school. Hence, though we like the concept of a house much more (due to
> our lifestyle and interest in doing / fixing things) the condo/
> townhouse seems a better option in terms of resale and a quick
> turnaround.
I agree with the other poster who asked why you wouldn't want to just
rent if you know you are only going to be there a few years. If your
only two choices for buying are a fixer-upper you're not really
interested in fixing up, and a water-damaged condo, renting probably
makes even more sense.
Also, even without the water damage, in many areas single-family homes
are much more in demand and will sell a lot more quickly than condos,
so you shouldn't jump to the conclusion that you can always get a quick
sale on a condo.
-Sandra the cynic
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Posted by Tad Borek on August 7, 2007, 1:23 pm
Sandra Loosemore wrote:
> I agree with the other poster who asked why you wouldn't want to just
> rent if you know you are only going to be there a few years.
Four years is kind of borderline given the costs of buying and selling,
but August 2007 home purchasers have an additional risk factor to
consider...we're in the early stages of some significant changes in
financing for mortgages, especially for people with bad credit. This
whole subprime story is all over the news so no need to go into detail
about that.
Depending on the impact of subprime borrowers in your local real estate
market (even, in this specific condo complex), you could see
historically-unusual price changes over the next four years. An example
is here in CA where some of the sub-markets dominated by those
purchasers have seen 20%+ drops in price over the past year...and the
homes still aren't affordable relative to the household incomes in those
areas. And there's still two more years of subprime borrowers (from
2005-06) who will get their adjustable rates reset...and now they can't
refinance or sell.
It's very local in nature though and there's no way to generalize that
for your specific condo/home. Perhaps your local papers are reporting on
the topic?
-Tad
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