younginvestor2013
Recycles dryer sheets
- Joined
- Feb 6, 2013
- Messages
- 226
I am under contract on a condo in Chicago and broke the “3 times your income” rule as a ceiling for your purchase price. Perhaps I am feeling a bit of “buyer’s remorse” but I think I made the right choice. What do you guys think? Perhaps I am looking for a little bit of justification....but I am looking for your honest opinion.
I currently make 60,000 with bonus and spent about 215K on the condo. I just had my year end review at work, and anticipate being promoted within the next year, when I will be grossing about $70-75K all in. Including my 20% downpayment money, I have a NW of about $315K.
I do consider myself conservative and have been saving 15% + of my gross income since graduating college (almost 3 years ago)….I was looking at condos in my price range of $180K, but I could see myself out growing them in a year or two. The condo I bought is 10% below the most recent comp in Nov 2013. It is a newer building, and has low assessments/HOA fees and comes with a spot in the parking garage.
I don’t own a car, but plan to rent the space out for $150 a month as that is what spaces go for in the building. I plan to roll over about $500/600 a month from my brokerage account until I am promoted, then my monthly payments will fit right in with my budget where I won't have to roll money over and can save 15+% of my gross income. I am “justifying” this because:
interest rates are on the rise
home values are on the rise
the unit/building has all features I want + low assessments
If I am promoted in 1 year and only have to “roll over” $600/month for 1 year, that is only $7,200 or 2% of my net worth.
I will begin to build equity
I am buying at the lowest comp in the building. The Chicago market has seen a big trend upward in pricing, so I anticipate holding and renting if I move (or selling if the market warrants it) and profiting
If I want to move and rent it out, I will still have assets for downpayments on another property.
I still have a sizable nest egg for potential career changes, bumps, or other emergencies in the future.
My biggest fear is that I won’t be able to rent it out due to HOA rental cap should XYZ life change occur and require me to move out or leave Chicago.
I currently make 60,000 with bonus and spent about 215K on the condo. I just had my year end review at work, and anticipate being promoted within the next year, when I will be grossing about $70-75K all in. Including my 20% downpayment money, I have a NW of about $315K.
I do consider myself conservative and have been saving 15% + of my gross income since graduating college (almost 3 years ago)….I was looking at condos in my price range of $180K, but I could see myself out growing them in a year or two. The condo I bought is 10% below the most recent comp in Nov 2013. It is a newer building, and has low assessments/HOA fees and comes with a spot in the parking garage.
I don’t own a car, but plan to rent the space out for $150 a month as that is what spaces go for in the building. I plan to roll over about $500/600 a month from my brokerage account until I am promoted, then my monthly payments will fit right in with my budget where I won't have to roll money over and can save 15+% of my gross income. I am “justifying” this because:
interest rates are on the rise
home values are on the rise
the unit/building has all features I want + low assessments
If I am promoted in 1 year and only have to “roll over” $600/month for 1 year, that is only $7,200 or 2% of my net worth.
I will begin to build equity
I am buying at the lowest comp in the building. The Chicago market has seen a big trend upward in pricing, so I anticipate holding and renting if I move (or selling if the market warrants it) and profiting
If I want to move and rent it out, I will still have assets for downpayments on another property.
I still have a sizable nest egg for potential career changes, bumps, or other emergencies in the future.
My biggest fear is that I won’t be able to rent it out due to HOA rental cap should XYZ life change occur and require me to move out or leave Chicago.