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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.
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.
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.
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.
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Hello I was hoping I could get some advice on whether or not to buy. I was also wondering if someone could make some semblance of why these condo prices are all over the place. I'm glad I found this site because after reading the main article, and lurking these forums for a few months, I have a feeling I would have made a big mistake if I didn't...
Some background: I am currently training in my medical residency for the next 5-6 years here so I will be in Pittsburgh for this time period at least, barring some horrible event. Single. About 130k in student loan debt, paying off slowly, (depends on the loans, about 80k is fixed at 4.5%, another 10k at 2%, rest at 6.8% though). Avg salary ~48k currently but it scales up mildly with each year. Not sure if I will end up staying in Pittsburgh.
Most of my colleagues have bought condos or single family homes if they have a family. A lot are urging me to do the same to "build equity." EVERYONE seems to be saying I'm throwing away my money now renting. Currently I am renting a small house with 2 roommates, ~700/month (depends on utilities). Location is decent, but it takes me about 15-20 minutes to get to most of the hospital sites I work at. Street parking.
One building I had an eye on, and a few of my colleagues currently live there is the one listed below. However I am VERY confused by the prices, as they are ALL over the place. The downside of this building is the condo fees are QUITE high, mid 500s a month! Allegheny county also has high property taxes (I'm not sure the exact % but everyone complains about it...) The upside is that it is very close to the main hospital, walking distance really, and includes an indoor parking garage (I currently have street parking and winters are a pain) so the location is much better. It's also within walking distance to a lot of restaurants. Where I live now, it's pretty much all residentials and I have to drive everywhere.
I included links below:
3br, 2.5ba, 1,762 sq ft : $329,500 : http://www.zillow.com/homedetails/128-N-Craig-St-APT-316-Pittsburgh-PA-15213/11528837_zpid/
3br, 2ba, 1,680 sq ft: $125,000 (recently sold - looks like the buyer got an incredible deal!): http://www.zillow.com/homedetails/128-N-Craig-St-APT-604-Pittsburgh-PA-15213/11528875_zpid/
2br, 2ba, 1,382 sq ft: $110,000: http://www.zillow.com/homedetails/128-N-Craig-St-APT-917-Pittsburgh-PA-15213/11528935_zpid/
2br, 2ba, 1,267 sq ft: $119,900: http://www.zillow.com/homedetails/128-N-Craig-St-APT-401-Pittsburgh-PA-15213/11528839_zpid/
2br, 2ba, 1,336 sq ft: $99,000: http://www.zillow.com/homedetails/128-N-Craig-St-APT-706-Pittsburgh-PA-15213/11528893_zpid/
1br, 2ba, 1,342 sq ft: $75,000: http://www.zillow.com/homedetails/128-N-Craig-St-APT-614-Pittsburgh-PA-15213/11528884_zpid/
1br, 1ba, 1,013 sq ft: $79,900: http://www.zillow.com/homedetails/128-N-Craig-St-APT-506-Pittsburgh-PA-15213/11528861_zpid/
1br, 1ba, 1,090 sq ft: $75,500: http://www.zillow.com/homedetails/128-N-Craig-St-APT-709-Pittsburgh-PA-15213/11528896_zpid/
1br, 1ba, 1,090 sq ft: $109,900: http://www.zillow.com/homedetails/128-N-Craig-St-APT-710-Pittsburgh-PA-15213/11528897_zpid/
As you can see, the pricing is WILDLY different on some of these units, which are identical or near-identical. They're all in the same building, and similiar floor plans.
Some caveats:
1) I'm concerned that if I do end up buying, my monthly cash flow may be inadequate. I may have to defer my student loans, which will continue to acrue interest on top. In addition I'll have a mortgage...and the HOA fees seem too high for me.
2) My parents are offering a 20% down payment to help me out. In fact they urged me to buy back when I started medical school and are wondering why I STILL haven't bought... They're pushing this as well.
3) If I buy a larger place, I will have to find roommates. Although this may offset the mortgage (and maybe even be profitable since this building is at a prime location, right btw the UPitt and CMU college campuses), I'm not sure if I want to deal with all the hassle of looking constantly for one.
I punched in the numbers at:
http://michaelbluejay.com/house/rentvsbuy.html
And even with a purchase price of 75,000, 20% down, 5% appreciation (which I highly doubt...), it STILL says buying won't be better than renting till Year 6.
So I guess my main questions are:
1) Am I right to ignore my family, friends, and colleague's advices to buy now?
Usually when the topic comes up with anyone, I'm made to feel sort of foolish to not buy...
2) Why are all the condo prices so different? A lot of the similiarly configured units have big price differences...
Thanks. I will appreciate any input.
#housing