3 bedroom apartment rental or buy 2 bedroom condo..?
My hope is that the market will continue to be steady and not increase dramatically as it has in the past and maybe next year be in a position to buy a 3 bedroom. My husband thinks we should buy the 2 bedroom and hope it will increase in re-sale value, sell in a few years and then try to buy a 3 bedroom.
Any thoughts or suggestions? We want to stay in the area we currently are (Boca Raton, Florida). Thank you.
Answer:
We have just pasted the top of the bubble, once it starts to go down it will pick up steam and go down further. Sadly, unlike the stock market there's little you can do once the illiquid housing market collapses. If you can't sell now, you'll have no choice but bite the bullet.
For example, assume you live in one of America's top 40 metro areas. You bought last year for $500,000 with $450,000 in mortgages. If the market drops just 10%, your equity's gone.
And if it drops the predicted 47.2%, your home's worth $250,000, you really are in trouble. If you lose a job, or suddenly get hit with extraordinary expenses, or just can't make tax and mortgage payments, or otherwise forced to sell, you could be wiped out under the tough new bankruptcy laws.
Your best bet is to rent and hold out for better prices. They are dropping but is disguised by incentives that the builders are giving away such as cars, swimming pools and cash. Don't be fooled by such offers, if they have to give a car away with the house what is the house or condo really worth. Plus there has been an over build of condo's and more still in the construction phase that hasn't even hit the market. Prices aren't going up. You are better off putting your down payment in a CD making 5% for a couple years as prices fall and they will fall.
Here is a good article to read before making a decision
http://www.foxnews.com/story/0,2933,1878.
Real estate prices are going down these days.. I suggest you wait one more year. The Real estate boom is ending in all the unpopular markets. There are so many foreclosures going on right now you could find some bargain deals.
Definately buy when you can afford a 3 bdrm!
It is a little more responsibility,but that is the price of freedom!
Also,try to get a house!Don't force your kids to grow up in a cage!Apartments are just stacked cages for ppl.No real privacy & if someone has it in for you or you get bad neighbors..
I will never live in an apartment again,no matter how good the maintenance!
Buy. If you can pay your own mortgage rather than someone elses then you definitely should. Buying is an investment and renting is paying for someone elses investment. I have a few homes and LOVE that someone else (my renters) are paying for my retirement!
About the kids.She's almost 7 and he's almost 3. They can share a room for another 3 years (because you'll probably get a loan w/ a pre-pay penalty) and they won't be traumatized. I shared a room w/ two younger brothers until I was 11 and I'm fine. They probably play together when they are in the house anyway. Besides it's good for them to see that sacrafice equals advancement.
Buying will be the smartest thing you ever did. I have never heard anyone say "I wish I had not bought and just rented an apartment for the past 20 years." Everyone always says they wish they had bought. The real estate market might take a dip but it will go up and even if it stays level for a while you are saving your money rather than giving it away.
If you can get the 2Bdrm w/ a mortgage (incl. tax and ins.) the same as your current rent or less then do it but don't get yourself into a situation where you are house poor either.
The biggest fallacy in real estate investment is to think that your unit will increase and that you will use the profit to buy a bigger unit. Truth of the matter is that while your 2 bed room unit increases over time, so will the 3 bed room unit. What's more, with the increase in purchase price, so will your real estate taxes and insurance.
If your rental payment is less than owning a 2 unit condo, stay there and save up the difference to buy a 3 bed room unit. Your worst nightmare is to find out you cannot afford to get into a 3 BR unit a couple years later after you buy the2 BR one now. But then your kids are getting older everyday. Then you are stuck.
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