Profile picture for GRADKel

I'm a full time graduate student considering buying a condo...is this even possible?

I'm considering buying a condo since I'm in a PhD program (meaning I will be in the same town for at least 3 more years). I worked full time for several years before returning to school and have good credit. Is this a poor decision? Is it even possible? How much can I actually expect to qualify for? I'm tired of paying as much to share a house as I would to own one on my own. I know people who have done this in the past (fresh out of undergrad with no job) but I know that the housing market is different now. Thoughts? Advice?
  • April 15 2011 - US
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Answers (7)

Anyone who qualifies may own a home.  There will never be a better time to find the deal you will in today's market.  You can even use student loans as a means of 'credit' not too many people know that.  Speak to a few different lenders and see what they think.  I always tell buyer's even if you hear that you do not qualify at least you will know what is needed to move in that direction, good luck!
  • April 20 2011
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Profile picture for GRADKel
I really appreciate all the feedback. I'm looking at one condo in particular that has 3 bedrooms and 2 and a half baths. I would definitely rent out a room to at least one other person, hopefully two. My initial thoughts are to keep it and rent it out after I leave (if I leave, many of the people who graduate from my program actually stay in the area). I'm confident I wouldn't have any trouble finding tennants. It's a big ten school, relaively close to campus, I could easily "advertise" within my program etc... Condo's in the complex are going for $700-$800 a month (or more). Seems like a win win right (assuming I can get approved for enough $$)? There are still red flags for me . The first is that several condo's in that complex are for sale, I'm really curious why that is. How can I find that out? I'm also not very familiar with how condo living works. I know that you have fees and thing you need to pay every month, but what do they cover as far as maintenance is concerned. I'm well aware that anything appliance wise would be my issue but what about electrical issues, if the roof starts leaking, plumbing issues (faulty pipes vs oops I flushed a sock) etc. AH so many questions.  
  • April 16 2011
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Profile picture for Dunes....
Things are different now....Prices in many many Markets are Going Down not Up

Are you calculating Property Taxes, maintenance, water & garbage and whatever other costs are included in a Rent paid?
Are prices declining,,more inventory coming on the Market, Sales numbers..Listing Price Average vs Sale Price average ect..

It's how informed you are that will determine if you make a wise decision or if it is a wise decision......Get informed as possible about your Market Area and the Real costs then you'll be able to answer your own question

  • April 16 2011
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Hi Gradkel, I purchased my first home while in a similar situation. I bought a 3 bedroom with a nice enclosed family room with a fireplace.  I took that as my bedroom and lived like a king in the largest room in the house and rented the other 3 bedrooms and pretty much lived for free in the house. Prices and interest rates are at an all time low and there are all kinds of first time home buyer down payment assistance programs.  You'd be surprised at what people can qualify for.  I'd suggest, don't buy a car or anything else with payments until you buy a home first.  You can always keep the home as an investment when you have to move on to bigger and brighter career prospects. Feel free to contact me if you ever have Real Estate needs in California. :) Roland Corral, Southern California
  • April 16 2011
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I agree with Robert, 3 years is a very short time to own a home, especially if your plan is to buy and later sell in 3 years. Let's assume you can qualify to buy the condo (You total debt to income ratio shouldn't exceed 45%) There are some scenarios where it may make sense.

What will be your housing costs be if you rent? What will your payments look like on the condo? If you buy a condo will you rent out a room to another student? You would need to do a rent vs. buy comparison that takes into consideration all the costs (including costs to obtain the home and later sell the home if that is the plan.)
If it will cash flow as an investment property would you consider keeping the condo and having a property management company rent it out.

Just because you aren't going to live in a location for more than 3 years doesn't mean one should just dismiss the idea of buying. But I wouldn't buy just because rates are low and prices are low. The decision needs to make sound financial sense.

When I was a LT in the Army about 20 years ago I bought a townhome that I was never going to live in. I managed it personally for about a year before leaving town. I just sold it last year. My out of pocket costs at the time were less than $3000. Over the 20 years the payments were made mostly by the tenants. The key was I had a property management company I could trust, it was in a location where there were always going to be renters, and the property would cash flow.

  • April 16 2011
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your = possession. Your car
you're = you are...

3 years is  a VERY SHORT time frame to consider buying. The costs to buy are nearly 10% when you factor in inspections, closing costs, loan costs, commissions, so unless the home went up 10% right out of the gate, you could lose money. Times are uncertain, and even a good deal today may take many years to come to fruition. ignore agents who don't understand this.
  • April 15 2011
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Thats great your thinking about buying a home. Yes it is possible. The first thing i would do is consult a lender (mortgage broker, Bank or credit union) this will help you understand what options you'll have on purchase price and what kind of down payment you might need. Your lucky to have this opportunity to buy. This is such a great time to purchase a home. 
  • April 15 2011
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