$450k condo on $110k salary

[Anonymous]

Anonymous wrote:Please.tell me the field you are.in to make 6 figures in your 20s so I can encourage same education for daughter

+1

You beat me to it. I don't know any 25 year-olds that make 110k. Maybe there are a handful of BigLaw associates that fit the bill, but no way any of them have saved 100k through their own toil.

I would encourage OP to look at the condominium's financials. If there isn't a sufficient reserve fund, expensive repairs will have to be funded through special assessments against unit owners and they can be big - five figures.

[Anonymous]

To answer your question, it's totally doable. I bought a condo just under $450,000 on a lower salary (that I knew would increase a tiny bit) and much lower down payment (~$25K) but no student loans. It's been fine. Still living there over 10 years later.

[Anonymous]

Sounds like you are doing well and are relatively conservative financially so I think you will be fine. I had a $450k mortgage on about that income when I bought my first home. It was a little tight, but I figured it out and my income grew over time. I think you will be fine. You can always refinance into a 15 year later or you may end up moving if your income keeps increasing and you outgrow the condo. I went with a townhouse though since I did not like the idea of paying really high condo fees. I got three times the space for about the same monthly payment since the HOA fees were miniscule in the TH vs. the condo fees.

[Anonymous]

Anonymous wrote:Yes, condo fees are the real issue. Def look at the financials for the condo association first. But your numbers sound good.

and condo fees can increase a lot unexpectedly

[Anonymous]

Based on a 30-year $350K mortgage at 4%, you'd be looking at about $1700/month in mortgage, plus property taxes and homeowners (so add ~$300 for escrow?), plus $500 for condo fees. Can you swing $2500/month (plus any utilities not included with the condo fees) comfortably?

Our first home was a condo, and the fees and special assessments are what kill you. This is particularly a problem for buildings that were converted to condos rather than being built as condos because the building will be much older than the reserve fund, and they'll be in make-up mode to built the reserve up. We also lost the first contract on our condo ~8 years ago when we sold because the homeowners' documents presented an upcoming special assessment in the worst-case scenario and very differently than what had been described to the homeowners. We ended up selling at a slight loss, even though it was a desirable area and walking distance to a metro.

[Anonymous]

Anonymous wrote:Based on a 30-year $350K mortgage at 4%, you'd be looking at about $1700/month in mortgage, plus property taxes and homeowners (so add ~$300 for escrow?), plus $500 for condo fees. Can you swing $2500/month (plus any utilities not included with the condo fees) comfortably?

Our first home was a condo, and the fees and special assessments are what kill you. This is particularly a problem for buildings that were converted to condos rather than being built as condos because the building will be much older than the reserve fund, and they'll be in make-up mode to built the reserve up. We also lost the first contract on our condo ~8 years ago when we sold because the homeowners' documents presented an upcoming special assessment in the worst-case scenario and very differently than what had been described to the homeowners. We ended up selling at a slight loss, even though it was a desirable area and walking distance to a metro.

If it's 2,500 a month you're better off investing your money. You should be able to find an apartment for 2,500 or less. Condos simply aren't worth the hassle and the ROI isn't there. You'll have to spend money on the closing costs, taxes and possibly assessments down the road. Just rent and invest your money until you can buy a house.

[Anonymous]

What's your mid-range plan? Marriage? Kids? Sticking with DC? I would not buy any property unless I planned to live in it for a good 5 years just because of the transaction costs (closing fees, realtor fees when selling, etc.)

[Anonymous]

Anonymous wrote:

Anonymous wrote:With rents decreasing in DC it's probably much better financially to rent in a luxury building. Check out the buy vs rent calculator on the NY Times.

+1 rents are going down down down

Is this a joke?
The smallest 2 bedroom in a decent neighborhood is at least $2800 plus utilities

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With rents decreasing in DC it's probably much better financially to rent in a luxury building. Check out the buy vs rent calculator on the NY Times.

+1 rents are going down down down

Is this a joke?
The smallest 2 bedroom in a decent neighborhood is at least $2800 plus utilities

OP is not getting a two-bedroom in PQ for 450k. So comparing apples to apples, OP could rent a one-bedroom in a luxury building in Logan Circle for 1.9k/mo.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:With rents decreasing in DC it's probably much better financially to rent in a luxury building. Check out the buy vs rent calculator on the NY Times.

+1 rents are going down down down

Is this a joke?
The smallest 2 bedroom in a decent neighborhood is at least $2800 plus utilities

OP is not getting a two-bedroom in PQ for 450k. So comparing apples to apples, OP could rent a one-bedroom in a luxury building in Logan Circle for 1.9k/mo.

pp here, I meant to add that if the mortgage ends up running >$2k/mo., OP might not be able to command enough rent to cover the mortgage when OP ultimately decides to move into a bigger space (wife, kids, etc.).

[Anonymous]

Anonymous wrote:Based on a 30-year $350K mortgage at 4%, you'd be looking at about $1700/month in mortgage, plus property taxes and homeowners (so add ~$300 for escrow?), plus $500 for condo fees. Can you swing $2500/month (plus any utilities not included with the condo fees) comfortably?

Our first home was a condo, and the fees and special assessments are what kill you. This is particularly a problem for buildings that were converted to condos rather than being built as condos because the building will be much older than the reserve fund, and they'll be in make-up mode to built the reserve up. We also lost the first contract on our condo ~8 years ago when we sold because the homeowners' documents presented an upcoming special assessment in the worst-case scenario and very differently than what had been described to the homeowners. We ended up selling at a slight loss, even though it was a desirable area and walking distance to a metro.

Ugh yes I own a 70 year old condo that was converted from rentals in the late 1990s. The systems were in terrible shape, our fees are ridiculous, and we're still in catch up mode. But, it was what I could afford and in a good area, so I didn't have much choice.

[Anonymous]

Anonymous wrote:

Anonymous wrote:350k mortgage on 110k HHI, why wouldn't it work or do you want gummy points for being a saver?

Wow, who pissed in your Cheerios? $100k is nowhere near "brag about it on the internet" levels, and I've never bought property before so I figured I would ask people who have.

haha welcome to DCUM. NP here - your proposed purchase seems fine. congrats on the strong savings!

[Anonymous]

If interest rates go up, condo prices will be the first to suffer. Check out the "housing bears" thread in the Real Estate form for another perspective.

I'd think long and hard about whether you're okay with your future kids going to D.C. Public schools. I know many people who bought at your age, didn't think too deeply about the schools, and ended up stuck.

I'd agree that you should rent a nicer 1 bedroom and invest your money. Check out the rent vs buy calculator The NY Times has.

[Anonymous]

Cool story. Ask your parents to help you again. And again.

[Anonymous]

I'll play and assume, arguendo, this salary is real. You are overextendeding by 100K at least.