Buy or Lease a Condo
I currently work in IB in Chicago, started a few months ago. My current lease actually runs out at the end of February and renewing is not an option so I'm deciding whether I want to find a new place to rent or to buy a condo.
I want to stay long-term but that could easily change. Is it difficult to manage/rent out an apartment if I decided to buy but needed to relocate? Also, if I do buy, I would get a 2 BR place and rent out 1 of the rooms. Cost of a 2 BR condo in the area I want would likely be around $400-450K.
Currently, I have $50K savings, so I wouldn't even have enough for a down payment if it's 20% (is it possible to get 10%?). My base is $70k + bonus.
I'm wondering your thoughts on finding a new place to rent vs. buying.
Up
Right, at 20%. There are other ways to structure it though.
No you won't likely be able to purchase a ~450k condo on your income. Unless you can prove to the bank that your bonus will be stable year to year. Your down payment is less of an issue because it is actually rare that a full 20% is put down on a mortgage. You can structure it with multiple loans (although this is difficult for first time borrowers now) you might be able to get an FHA loan depending on the COLA adjustments you can get, again this might be difficult as I doubt it adjusts that high.
Condos are easy to rent out, you can get a professional management team to manage the property. However this will really cut into your cash flow and you might make a few dollars a month. However you will be building equity. So its not really a bad idea.
I would rent if you are not certain that you will be in the area for at least 2 years as it will take time to build up another down payment if you need to move.
If you saved 50k it should be a little easier to save another 50k. I advise saving up some more. I wouldn't buy anything with out atleast 20 grand in the bank after purchase.
I'm about to buy a place in NY soon. Rented a couple years first to have sufficient money for down payment + money in the bank leftover to ensure I can meet all the expenses/emergencies
That must be a boatload of cash. Real Estate in NY is crazy expensive.
Et quod doloremque quod provident et. Est aliquid voluptatum natus cumque aut dolore omnis. Ab suscipit officiis qui omnis culpa et necessitatibus sed. Autem aut qui iste consequatur ullam hic nisi.
Dolorum voluptatum nobis dolor dignissimos et accusantium. Illum enim fugit minus velit error vero. Eum sed temporibus rem aliquid omnis suscipit excepturi culpa. Est cupiditate enim tempora velit quasi ut. Officiis aperiam dignissimos officia accusamus qui. Aut earum est quia cum soluta aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...