short-term condo - tempe near ASU

Asked by S R, 85287 Thu May 8, 2008

So, my lease ends in two months and i am looking for a rental condo within walking distance to ASU. Meanwhile, I am also wondering if I should buy a 2/2/ condo in that area - I would be spending a little more than rent on the mortgage and at the end, I do have an asset. I am looking at a value of 200,000 or lesser.

The one problem, if at all, is that, I graduate in Dec 09. After that, my furture is pretty much uncertain witha large probablity that I might land a job elsewhere. If I can't resell it, then the maximum I can hold on to it is for another 6-12 months (by renting it out).

Is this a worthwhile investment for me? I atleast want to break even on the price i bought it for (after maintenance, HOA fee, appreciation/depreciation, agent fee, etc). IS it ok, in general, to buy 20 year-old condos (with regards to maintenance)?

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Steve Belt, , Scottsdale, AZ
Fri May 9, 2008
SR, your down payment would be the biggest deciding factor to whether this will work for you. With 20% down, it's likely we can find you a cashflow neutral property that makes sense. Using FHA financing with 3% down, combined with the higher interest rate, it's unlikely that buying a condo would make sense, with such a short time horizon.

The other thing about a short time horizon, is even if it's cashflow neutral, you are really gambling on the real estate market to either stay flat or go up, during you investment period. Honestly, that's not a wise gamble for most people today, unless you can get into a screaming good deal, that has some down market safety.

The reason a cashflow neutral position is critical for an investor, is that it allows you to "ride out" a down market, until a suitable exit point is found. Your money is tied up in the property, but at least it doesn't cost you anything to own.
1 vote
Roberto Ribas, , Scottsdale, AZ
Wed Jul 23, 2008
buying makes NO SENSE whatsoever, for such a short time frame. Wait a sec, if you hire me I can earn a commission! I just changed my mind, lets go find a home!!!

Ok, no joking!!! No, keep in mind that there are many expenses to buying and selling real estate. Over very long periods of time, ordinarily say five years, given our present uncertainty, probably more like 10 years or more, buying is better than renting.

But over such a short period of time, it would be extremely unlikley that the home could possibly go up at all, let alone enough to justify the expenses of selling it 18 months later.
0 votes
Teri Ellis, Agent, Mesa, AZ
Thu May 8, 2008
While I agree - in part - with Rod, I think it is a wonderful time to make an investment. There is no such thing as "for sure" in any real estate market, but now is probably a great time to check it out. I would hook up with a Realtor, and a loan officer, run the numbers - and see if it makes sense to you. It is certainly worth a look! I'll be happy to help in any way that I can to help you figure out which way would be best for you to go.
0 votes
Temporarily…, , Tempe, AZ
Thu May 8, 2008
Given your time frame and uncertainty, I suggest you continue to rent. There are a handful of possibilities under $200K in close proximity to ASU. Send me an email if you want a list to check out.
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