patrick.net

In Japan, quit resurrecting dead threads. Seriously. The original poster is likely long gone from the site.

Follow the rent vs. buy calculator and learn to ignore people's ignorance on this topic. Math is more objective than human opinion, unless that human is a recognized yogi who has attained enlightenment.

@ sfbubblebuyer

Ok, I'll try to check if the poster has been gone for some time.
"CaffeineAddict" has posted as recently as 8 days ago, though. Sometimes some good threads that get lost in the shuffle, later could have some interesting follow ups. I prefer a long thread with interesting updates and resolutions months later to a bunch of "hype and fade" threads without resolution.

20% for down payment!? Whay can't your parent give you that money to pay off your student loan? $48k salary is not good if you have to pay about $500 for condo fee. How much for the mortgage? do stressed yourself until you can easily afford it.

Fille makes a great point. That 6.8%-interest portion of your student loan is like a giant albatross; get that paid up, and preferably your other student debts also, before thinking about buying property.

How much do those 1000-sqft $70k apartments rent for? I thought Pittsburgh would be more expensive than that. If those are in a central, walking-distance location, they sound like a great deal.

To answer the question on what I ended up doing:

I actually went to look at this unit:
http://www.zillow.com/homedetails/128-N-Craig-St-APT-706-Pittsburgh-PA-15213/11528893_zpid/

I offered 75k and the realtor visibly snickered when I offered that price. Needless to say I got a call back saying, no we will not go under 99k but will offer 2000 for closing costs. I said no and I didn't really follow through on it. The unit was empty when I went to look at it.

Well I checked and it's now listed at 80k. It even looks like they had dropped the price around the time I went to look at it. The HOA fees are mid 500s so I have no idea if the owner ended up subletting the unit. For their sakes, I hope so.

Did not end up buying and continue to rent. Not happy with my current arrangements (sort of living with strangers) but not unpleasant or anything.

Sorry regarding the 6.8% loan, I ended up borrowing 50k from my parents to pay it off, and paid the rest off with my savings. They were disappointed that I didn't want to buy a home so the 50k was considered an interest-free loan instead of a gift (instead of the 20% DP which would have been a gift).

I am more than happy with that, since I never wanted the free money to begin with. The fact that I'm not forking over 6.8% interest payments is a nice perk as well.

Michinaga says

Fille makes a great point. That 6.8%-interest portion of your student loan is like a giant albatross; get that paid up, and preferably your other student debts also, before thinking about buying property.
How much do those 1000-sqft $70k apartments rent for? I thought Pittsburgh would be more expensive than that. If those are in a central, walking-distance location, they sound like a great deal.

They are in a central location, right between University of Pittsburgh and CMU, which is why I looked at those. The high HOA fees were a big turnoff though.

CaffeineAddict says

To answer the question on what I ended up doing:
I actually went to look at this unit:

http://www.zillow.com/homedetails/128-N-Craig-St-APT-706-Pittsburgh-PA-15213/11528893_zpid/

I offered 75k and the realtor visibly snickered when I offered that price. Needless to say I got a call back saying, no we will not go under 99k but will offer 2000 for closing costs. I said no and I didn’t really follow through on it.

Well I checked and it’s now listed at 80k.

good thing you stuck to your guns.
know what you want to pay (have a range of prices in mind). then wait for your price.
simple strategy - but hard to do for most.

As someone who did residency, the best financial thing I did was that maxed out my retirement. You probably have a 403b. Max that. If you have extra, do a ROTH IRA. It trains you to live beneath your means and leave money aside so that you can't touch till later.

Physicians are notorious for not handling their money well. They work hard forever and then when they come into real money, they live at or beyond their means, with banks happily lending and entrapping them with debt to no end.

Sounds like you're in a surgical sub specialty. When you're done, you'll be able to buy a condo like that every other year. Why struggle to maintain a primary residence with all the hassles that come with owning while you're on call every 3rd night right now?

Buying the property isn't the worst financial move you could make, but you would be putting your eggs in one basket for now paying a $500(HOA) a month for the privilege.

I'm certainly not an expert, but I do believe that RE should be in one's portfolio, eventually. I'm 10 years out of residency and have managed to build a modest nest egg composed mostly of stocks and now some RE, and that's via the primary care route.

Good luck. YMMV

How could you possibly have contributed 16,500 a year to your 401k/403b? I've been probably putting in ~1000/yr after-tax dollars to my 403b and 5000 into my Roth IRA since I started.

Kudos to you but for me personally, it's very hard to contribute just this 6000ish/yr.

SF ace says

CaffeineAddict says

Sorry regarding the 6.8% loan, I ended up borrowing 50k from my parents to pay it off, and paid the rest off with my savings. They were disappointed that I didn’t want to buy a home so the 50k was considered an interest-free loan instead of a gift (instead of the 20% DP which would have been a gift).

I am more than happy with that, since I never wanted the free money to begin with. The fact that I’m not forking over 6.8% interest payments is a nice perk as well.

From the IRS perspective, it still sounds like a gift unless there is evidence otherwise. Actual repayment, signed contract.

It wasn't all given in the same year. I was fortunately aware of the 13k limit annually. :)

so lets see, rent at 700, HOA fee of 500. Then 30 year mortgage PITI on a 100K mortgage is 743.
figre get 200 back on taxes, so pay almost 1000/month to meet the condo, or 700 for the rent.

Seems like it's a question of do you want to pay 300 more a month to save on the drive in the winter?

I used to live in western PA back in 90's. Friendly people, nice universities, but the weather sucks big time. It generally was relatively cheap area to live and maybe still is now though, I can't believe a condo in Pitts is selling less than 100K.

But if I were in your shoes, I'd be rather concerning more about student loans and other debts than buying a cheap condo. You're starting your professional life with 180K debt. Think about it. My wife and I started with less debt than that, and it put us in a shithole for years to pay them off. You definitely will need another loan in few years and you may want to go other cities after you done with your residency there. What would you do w/ that condo in Pitts when that happens?

700/mo rent sounds reasonable to me, but 500/mo HOA? in western PA?
Of course, I wouldn't mind you buying a 100K condo or 500K SFH by the river when you don't have to worry about 180K debt already have or you're from a wealthy family that surely will wipe your debt in a blink. Otherwise, I'd say keep looking for another rent that is close to your hospital. Keep your self moving ready, and keep saving for a while.