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Slain

Posted: Tue Aug 07, 2007 6:27 pm

Guest

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

Elle

Posted: Tue Aug 07, 2007 7:44 pm

Guest

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.

"Slain" <Slain.k@gmail.com> wrote
snip for brevity

Quote:

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?

Sandra Loosemore

Posted: Tue Aug 07, 2007 8:52 pm

Guest

Slain <Slain.k@gmail.com> writes:

Quote:

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

Tad Borek

Posted: Tue Aug 07, 2007 9:23 pm

Guest

Sandra Loosemore wrote:

Quote:

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

Don

Posted: Tue Aug 07, 2007 11:21 pm

Guest

"Slain" <Slain.k@gmail.com> wrote in message
news:1186418613.681198.302800@22g2000hsm.googlegroups.com...

Quote:

With the market expected to bounce back around 2010 -12, what would
you call as a better investment?

Whatever you do, it would be unwise to base your decision on that
expectation. Think about it for a minute. Would you make a decision as to
whether or not to invest in stocks on the basis of peoples' predictions
about what the market is going to do in 2010?

The other people who have responded to your question have made general
predictions about how the time frame in buying and selling a house usually
works out, but you should realize there are many exceptions. Actually to
answer your question with much confidence more details about your specific
situation are needed. What other investments do you have? Any debts? Is your
job situation very secure? Do you have money for a big downpayment, or do
you have to rely on "creative financing"? Could you possibly keep the house
after the 4 year period and then rent it to tenants over the long term? Lost
of variables at work! My experience has been that real estate is an
excellent investment over 20 years but a poor investment over 5 years. (I
suspect a similar statement applies to stocks.)

Elle

Posted: Wed Aug 08, 2007 12:35 am

Guest

"Elle" <honda.lioness@nospam.earthlink.net> wrote

Quote:

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.

PeterL

Posted: Wed Aug 08, 2007 4:45 am

Guest

On Aug 7, 7:27 am, Slain <Slai...@gmail.com> wrote:

Quote:

The housing market in your area? In general I would say that it's
impossible to call future market directions. Housing markets are
dependent on locations. So it's even tougher to call what your
specific market is going to do in 4-5 years time.

Quote:

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

Ron Peterson

Posted: Wed Aug 08, 2007 9:03 am

Guest

On Aug 7, 9:27 am, Slain <Slai...@gmail.com> wrote:

Quote:

Don't forget to get a building inspection before you commit.

Quote:

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.

Prices are reasonable in both areas, so you should be fairly safe in
your investment.

Quote:

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.

In my area, condos are not moving as fast as houses.

Quote:

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?

You can hire people to mow lawns, plow driveways, and shovel
sidewalks.

Quote:

With the market expected to bounce back around 2010 -12, what would
you call as a better investment?

The stock market will be better, but a home is a good inflation hedge.

Quote:

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

The heating costs will be less in a condo, but the quality of life
might be lower.

Be sure to have at least 3 bedrooms and 2 bathrooms to have a good
range of buyers.

Make sure that you have natural gas heat. Yes, it's hard to find in
NH.

--
Ron

Slain

Posted: Thu Aug 09, 2007 7:04 pm

Guest

On Aug 8, 1:03 am, Ron Peterson <r...@shell.core.com> wrote:

Quote:

On Aug 7, 9:27 am, Slain <Slai...@gmail.com> wrote:

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.

Don't forget to get a building inspection before you commit.

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.

Prices are reasonable in both areas, so you should be fairly safe in
your investment.

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.

In my area, condos are not moving as fast as houses.

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?

You can hire people to mow lawns, plow driveways, and shovel
sidewalks.

With the market expected to bounce back around 2010 -12, what would
you call as a better investment?

The stock market will be better, but a home is a good inflation hedge.

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

The heating costs will be less in a condo, but the quality of life
might be lower.

Be sure to have at least 3 bedrooms and 2 bathrooms to have a good
range of buyers.

Make sure that you have natural gas heat. Yes, it's hard to find in
NH.

--
Ron

Thank you guys!!!! All the suggestions were helpful. The reason for us
planning to buy over renting are a couple of reasons.
Both me and my GF are moving to the area and we feel, that it is
better to put the money towards mortgage, when the rent is almost
similar. That is our reasoning for going for a cheaper home.

The market is in a bad shape and hence, we can possibly get the price
we want.

We both have excellent credit. We are getting involved on the 5% down,
but have a good program with BoFA which allows us good interest rate
etc. We have stable good earning jobs. Do not really have much debt.

Finally I did a whole spreadsheet on renting versus buying, while
putting the opportunity cost into the stock market (12% return). At
the end of 4 years, my NPV still comes out positive.

The townhouse seems to be in a anice shape after fixing up but we will
surely get the home inspection done.

We do not prefer apartments, for the reason of "Quality of Life".
House would be our first preference, but sadly they are much more
expensive :(

If I was single, I would have ruled out buying. In about 4 years, even
if we break even I would be happy. That way atleast we did not spend
money on renting.

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