Purchasing first home on Nov 8, advice/am I doing anything wrong?

owning it might not be a bad idea even if they only live there for 2-3 years so long as they can rent it out...since its paid off it could essentially be free income to them for many years to come.

I assume its in a good part of the city that is in demand?

Quote from Brian1 : discostu58 is right. It would be financially wiser for you to rent than to buy for two reasons: 1. The short length of time it seems you might be in the home. The condo market was hit even harder than the single-family home market so you'll have to hold even longer to even break even when you go to sell your condo. 2. In general, the condo market has many dangers and potential pitfalls. Overall, even in a "normal" market the condo market is a more volatile market - pertaining not just to values, but situations as well (i.e. problems with people not paying their association dues and the direct impact that a foreclosure can have on every owner in a condo development vs. a single family home neighborhood). Know that you could buy and not be able to sell for a long time. You should not consider buying a condo if you're not willing to hold the property for at least 10 years.

I appreciate the insight, but this condo sold in 2004 for $230,000 prior to the massive real estate inflation/run-up. Aside from that though, anything even remotely comparable is $1300-1400/mo in rent. I'm unsure why I'd pay almost $16,000 a year to rent when that money is basically being retained in my pocket. Over the course of 3 years, even after HOA & Taxes, it is still $30000 saved.

And yes, it is in a very desirable area, near the main shopping malls of Atlanta, night clubs/bars, and restaurants. I do appreciate the individual who posted about looking in to the HOA and such, something I assumed the closing attorney would do but is not. Which is making me question the almost $1200 she is charging, and making me want a different closing attorney (current one procured at behest of agent).

doesnt matter what it WAS worth, it matters what it currently is worth and the future value (wont know that obviously). If you plan on only living there 2-3 years, its a waste to buy. There is no guarantee the value will go up, in fact it could still go down. Plus you wouldn't be "saving" anything as you have to pay for the condo, so you are just in theory, prepaying your rent. Plus by not renting, you now must pay, HOA, taxes and potential repairs. If you were planning on staying longer than 3 years, then it would be wise.

What are the specs of the condo? 1 br 1bath? Something else? I know the Atlanta market has a fair amount of new construction which will potentially lower your value more as it will create more supply.

what have the other condos sold for in the last few year? that will tell you if 124 is a good deal.

Quote from gdx : I appreciate the insight, but this condo sold in 2004 for $230,000 prior to the massive real estate inflation/run-up. Aside from that though, anything even remotely comparable is $1300-1400/mo in rent. I'm unsure why I'd pay almost $16,000 a year to rent when that money is basically being retained in my pocket. Over the course of 3 years, even after HOA & Taxes, it is still $30000 saved. And yes, it is in a very desirable area, near the main shopping malls of Atlanta, night clubs/bars, and restaurants. I do appreciate the individual who posted about looking in to the HOA and such, something I assumed the closing attorney would do but is not. Which is making me question the almost $1200 she is charging, and making me want a different closing attorney (current one procured at behest of agent).

I get that you don't want to "lose" money in rent, but you will lose (<-- no quotes) money by paying the closing costs and taxes.

I'm on board with the others, renting is the way to go if you only plan on staying 2-3 years.

Quote from gdx : I appreciate the insight, but this condo sold in 2004 for $230,000 prior to the massive real estate inflation/run-up. Aside from that though, anything even remotely comparable is $1300-1400/mo in rent. I'm unsure why I'd pay almost $16,000 a year to rent when that money is basically being retained in my pocket. Over the course of 3 years, even after HOA & Taxes, it is still $30000 saved. And yes, it is in a very desirable area, near the main shopping malls of Atlanta, night clubs/bars, and restaurants. I do appreciate the individual who posted about looking in to the HOA and such, something I assumed the closing attorney would do but is not. Which is making me question the almost $1200 she is charging, and making me want a different closing attorney (current one procured at behest of agent).

Meaningless what it sold for in the past. Utterly meaningless. And you are not getting a 140k condo for 124.5. You are getting a 124.5 condo for 124.5. That's how out of loop the sellers are with the market, trying to over charge by 15k.

When you sell you will pay at least 6% commission and closing costs again. You will still be paying mortgage, taxes, insurance and all up keep. Then throw in the headache you will have when you try to sell and it takes 8 months longer then you thought.

And you haven't looked into the HOA. Even seen the bylaws? You are out of your depth on this.

Quote from saladdin : Meaningless what it sold for in the past. Utterly meaningless. And you are not getting a 140k condo for 124.5. You are getting a 124.5 condo for 124.5. That's how out of loop the sellers are with the market, trying to over charge by 15k. When you sell you will pay at least 6% commission and closing costs again. You will still be paying mortgage, taxes, insurance and all up keep. Then throw in the headache you will have when you try to sell and it takes 8 months longer then you thought. And you haven't looked into the HOA. Even seen the bylaws? You are out of your depth on this.

Wanted this to be said again. Nobody considers the realtor fees! That's an automatic 6% or so off the top of the house!

People always think "But I'm wasting money by renting" and that's not the case. Since I purchased my house I've had to replace the roof, siding, repaint, new fence, water heater, a pipe broke, replaced the flooring, kitchen counters, lighting fixtures, etc. In that time, my house has dropped in value significantly. People just look at the cost of rent, and don't typically consider the HOA, maintenance, taxes, insurance, etc.

Being that you are just starting out in your career, expect changes. A 1099 is a lousy way to be employed at that pay rate. Chances are within a year you are going to find new employment, and what if it's across town? In another city? You never know, and you may want to get out of that condo asap and can't if you own it.

Owning isn't all it's cracked up to be.

Quote from Serus : Wanted this to be said again. Nobody considers the realtor fees! That's an automatic 6% or so off the top of the house! People always think "But I'm wasting money by renting" and that's not the case. Since I purchased my house I've had to replace the roof, siding, repaint, new fence, water heater, a pipe broke, replaced the flooring, kitchen counters, lighting fixtures, etc. In that time, my house has dropped in value significantly. People just look at the cost of rent, and don't typically consider the HOA, maintenance, taxes, insurance, etc. Being that you are just starting out in your career, expect changes. A 1099 is a lousy way to be employed at that pay rate. Chances are within a year you are going to find new employment, and what if it's across town? In another city? You never know, and you may want to get out of that condo asap and can't if you own it. Owning isn't all it's cracked up to be.

Word. Anyone who says "renting is throwing money away" has no grasp on finances at all.

I was going to mention his 1099 but since he didn't ask. You're right though. Sounds to me 50k by 1099 is low. And what happens if his contract isn't renewed and he has to move?

Okay, minus the crude comment of me being out of my depth, I do appreciate the advice, though not directly related to my question. I have checked up on the HOA by now, they have a health reserve fund, roof was replaced within last 3 years, and dues collection is over 95%. Oh & the condo is a 2 bedroom, 2 bath, granite counter tops, marble bathroom & fireplace, stone shower, stainless steel everything, etc.

In terms of the value of the condo itself, it appraised at 135,400, getting it at 124,500. As far as closing costs, yes those are being paid. Though the comments made here still don't equal out to the $30,000 over 3 years I'll be saving, not to mention the fact that if I do have to move or get another home, I can always rent this one out. Even if I have to sell it 6% - $6500, and upkeep - $4000, with taxes & hoa, I'm still saving $20,000 over 3 years. And this is all assuming the price of the unit remains stagnant with no growth at all.

Quote from gdx : Okay, minus the crude comment of me being out of my depth, I do appreciate the advice, though not directly related to my question. I have checked up on the HOA by now, they have a health reserve fund, roof was replaced within last 3 years, and dues collection is over 95%. Oh & the condo is a 2 bedroom, 2 bath, granite counter tops, marble bathroom & fireplace, stone shower, stainless steel everything, etc. In terms of the value of the condo itself, it appraised at 135,400, getting it at 124,500. As far as closing costs, yes those are being paid. Though the comments made here still don't equal out to the $30,000 over 3 years I'll be saving, not to mention the fact that if I do have to move or get another home, I can always rent this one out. Even if I have to sell it 6% - $6500, and upkeep - $4000, with taxes & hoa, I'm still saving $20,000 over 3 years. And this is all assuming the price of the unit remains stagnant with no growth at all.

I think you will do fine...and likely end up staying more than 3 years because time will fly by.

Make sure that you can rent it out...some HOA may not allow this...

Only $4k in taxes and HOA dues over 3 years? Damn, my taxes alone are almost that for a single year, much less HOA & Insurance.

Quote from Serus : Only $4k in taxes and HOA dues over 3 years? Damn, my taxes alone are almost that for a single year, much less HOA & Insurance.

The $4000 is upkeep. The HOA is $391/mo mainly because of the Concierge/security. Taxes are $1171/year. The Total for renting a place @ 1400/mo for 3 years was $50,000. For the appeasement of those in this thread I took out HOA, Taxes, etc and still was left with $30k. Further took it down via 6% selling cost, and potential maintenance on a 1300sq ft condo ($4000) and was still left with a net of $20k over 3 years vs renting.

Quote from saladdin : You are throwing money away then.

Things are a little different in the south. Rent is usually inflated but negotiable (if you want to tread that path) because of larger wage discrepancies between the property owners and renters than up north. Property purchase ROI can equalize in as little as a year in some cases. Especially with a 60% DP.