Scared of Money

This is about getting the most out of life for the least amount of money. And doing it with a bit of style.

Monday, April 03, 2006

To Buy or Not to Buy?

I can’t decide whether to keep renting or whether to buy my first
home or townhouse. I keep going back and forth.

I currently rent a studio for $881, which is ridiculous I know.
What’s funny is that I qualified for subsidized rent because I make
less than $45,000 a year. Otherwise I would have to pay a $1,100.
That’s insane! But I LOVE my location. I’m right downtown and can
walk to work and to the bars, which is sweet b/c we get a parking
allowance of $115. I apply that to rent. I fill up my car once or
maybe twice a month. I get cheaper insurance because I don’t drive
much. I have a state-of-the-art workout room and each piece of
cardio equipment has a flat screen TV. So I don’t have to pay for a
gym. Plus, we get a health and wellness benefit for $350 each year
so I apply that for my cell phone bill instead of gym membership. My
heating, electricity and water bill is $50 a month because I only
have to heat a 610 sq. feet apartment. And they didn’t charge me for
the first 9 months. I love my apartment building. It’s super trendy
and full of super trendy people. (Which isn’t so good with my “sheep
syndrome.”) I covet the BMWs in my parking garage. And there are a
lot of them.

I want to stay close to downtown. I want a two-bedroom place. I want
granite countertops and stainless steel appliances. I want to pay
around $200,000. These wants aren’t very compatible. The only thing
I’m firm on is that I want to be close to downtown (cab ride close).
I’m thinking of looking around February 07 because I will have two
more reviews by that time (and hopefully two more raises), which
will make it easier to qualify for a mortgage. At my projected
salary in February 07, the finance calculators are telling me that
I’ll qualify for a $125,000 mortgage but I was only planning on
putting down $50,000. I’ll probably have to my pay off my car
($6,000 by Feb. 07) and possibly my student loans ($13,000ish by Feb
07) to qualify, which I would rather not do. I’ve thought about it
and could get a one-bedroom place but they don’t appreciate as fast
and have a harder time selling. I can go without the granite
countertops and upgrade later. I’m also torn between a house and
condo. I absolutely do not want to pay HOA dues (homeowner
association) because they can rise rapidly. But a house is a lot
more work and I’d have to get someone to mow my lawn (I know from
experience that I won’t do it.)

Any advice from others who have been is the same spot?


At Mon Apr 03, 07:19:00 AM PDT, Anonymous Anonymous said...

Don't forget any property taxes on a house.
Do you need the extra space, that a house would provide, or other things that house would provide that you don't have now. One always wants to do something to their house so you incur additional costs there also. Unless you have need for the house and can keep that cheap rent, I would stay where you are and save up. Maybe be able to but 50% or more down on the house then you can do upgrades.

At Fri Apr 14, 10:15:00 PM PDT, Blogger mOOm said...

It depends on your market but prices are likely to go down or sideways - so if you are uncertain, get more educated on the issues. Waiting won't hurt... (I don't own any property directly but don't want to either).


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