<p>^^^, net-net monthly,you are correct with figures…But you have forgotten the 70k outlay,and to assume the market will make you a tidy profit in the span of 4-5 years,is realtor nonsense…and the scenario one post said was “investors”,not parents…Investors are in for long haul,most parents have a specifc window of time, and housing still has a long road ahead to profitability…</p>
<p>Not to offend any realtor that may visit, but has anyone ever heard a realtor say they think the market looks grim going foward ;),and one might be better served holding off,or renting??? I didn’t think so</p>
<p>^ sure there is the 20% outlay which is in all reality recouped upon selling (you could add in the opportunity cost of having that cash tied up…)…the big assumption is the 5 year appreciation. I’m not a realtor but I dont think a 6-8% (enough to cover your seller costs)appreciation over 5 years is that unrealistic.</p>
<p>At the end of the day though, I am not saying that this is an an INVESTMENT. For those with sufficient liquidity to tie up the down payment for 5 years It is just a vehicle to minimize your operating costs.</p>
<p>Hmmmm . . . if you could buy a condo for $65K- $100K, have your child take on a roommate who pays rent, then sell the condo in 4 years when your child graduates, I think you are going to make money on that investment.</p>
<p>Don’t forget - buy low/sell high. We are definitely in the “buy low” phase.</p>
<p>^^^^, Yes, we are currently in the “buy low phase”, but the next will be “buy LOWER phase”…Makes no sense to purchase a home/condo for your college student, as the savings are minimal,as food costs don’t change much, and secondary costs such as property tax/utility costs/upkeep eat up much,if not all savings of purchasing to save on “board”…A generation ago,this worked…No longer…</p>
<p>For some folks, buying a condo might not make sense, but for many now is the perfect time to buy - short sales abound, interest rates are starting to rise, and the future looks bright!</p>
<p>^Food costs are negligible in comparison to rent cost. I would definitely consider condo for $65K- $85K with rent paying roomate unless rent is relatively low, then it will not make sense. No dorms anymore, since D. is going to Grad. school. We have been paying rent for College Suits for last 2 years, but it has been covered by Merit scholarships as educational expense.</p>
<p>“Yes, we are currently in the “buy low phase”, but the next will be “buy LOWER phase”…”</p>
<p>I’ve been hearing that since January 2009. Around here, some folks who bought in winter 2009, have flipped and made money. Maybe there will be another huge dip in the housing market, maybe there won’t be.</p>
<p>Living in the"leafy burbs of NYC", i can assure you nobody is making any money flipping homes…I see homes on the market for 7 million,reduced to 5 and no bites…i see more moderately priced homes at 1 million,reduced to high 800’s, zero interest…To think somebody bought in '09 and flipped already for a profit seems unlikley…Unless it was a foreclosure,and then they sold for a modest profit…The days of making heady gains in real estate are gone for quite awhile…Though i am 100% certain a realtor will disagree ;)</p>
<p>qdogpa, we get the message that this would not be something for you to consider! Homes on my street that sold for $160,000 a couple of years ago are selling for $175,000 now. You can’t take your situation and apply it to the rest of the country.</p>
<p>its on redfin, using sales records data. Prices rebounded about 10% or so from the bottom in Jan-Feb 2009, to summer of 2009 or so, and have been mostly stable since. Some properties, naturally, went up more than that.</p>
<p>though you are correct, the biggest gains were people who bottom fished the foreclosures, fixed them up (with construction labor/contractors, etc very cheap) and then flipped. </p>
<p>We had bottom of the market houses here, which were selling north of 300k during the boom, sold for 150k or so after foreclosure, and then with modest improvements, flipped for 200k or so. No, it wasn’t like the crazy times of 2004-2006, but it was nice money for them as made it.</p>
<p>^^^, let’s say you bought at the precise bottom and now are ahead 10%,take out the 6% realtor commission,you’’ need to pay to sell(if thats the going rate) and closing costs just on the purchase, you “may” be even,not counting costs to close on a sale…I won’t even add in the loss of interest on monies used to purchase property,as savings rates are minimal…Though if you took those monies and bought at the lows in the stock market at the time, you’d be up significantly…</p>
<p>the comment above about homes selling for 175K± after going for 160k± a few years ago,(10%± profit)once you factor in costs to both buy and sell,you’re losing money</p>
<p>we sold for an astounding figure in '06,similar home currently goes for 30% less, and it is in one of the finest communities in Northern Bergen County NJ,where average homes are priced 700k…The purchasers will likley NEVER recoup the price they paid.
That said, we will likley never recoup our purchase after selling either…</p>
<p>" let’s say you bought at the precise bottom and now are ahead 10%,take out the 6% realtor commission,you’’ need to pay to sell(if thats the going rate) and closing costs just on the purchase, you “may” be even,not counting costs to close on a sale"</p>
<p>yes, if your nominal gain was 10%, the AVERAGE increase, you arent really ahead.</p>
<p>But not all properties were up 10%. Some were up less, but some were up more. Considerably more in some cases if you had the RE smarts to discern WHICH areas that was going to happen in, which areas had overshot the most on the way down, you could make a fair amount of money, and some here did.</p>
<p>“we sold for an astounding figure in '06,similar home currently goes for 30% less, and it is in one of the finest communities in Northern Bergen County NJ,where average homes are priced 700k…The purchasers will likley NEVER recoup the price they paid.”</p>
<p>They bought at peak. I am talking about folks who bought at the bottom.</p>
<p>assuming your screen name reflects where you live/work, i have a friend who sold a brownstone in Park Slope around 2005-2006…similar place is currently 20% less,without the “upgrades” he had…And the example you show about buying foreclosures for 150k and flipping after some improvements for 200k,doesn’t reflect the improvement costs(though to be done in a cost effective manner),or carrying costs,et al…I’ll bet they didn’t see a 10% after tax return, though that’s not terrible</p>
<p>We have higher end suburban areas that came down late, and are still down. We have some high end urban areas that never really came down (a couple of zips in North Arlington “immunington”) and we have low end suburban places like Prince William County where the market overshot, and where savvy investors bought at bottom, fixed, and either rented or flipped. Making, as you say, decent but far from land office returns.</p>
<p>When I saw the title of this thread, all I could think was: Hope these same folks don’t frequent the financial aid forum, complaining that their assets keep them from getting any financial aid. ;)</p>