2.07.2012

House Shopping Anxiety

I haven't written in here in awhile because I've been so busy with house hunting. It takes a lot of time searching for the right areas, checking out the area in the day time/night time, figuring out what needs repairing, HOA fees, Mello Roos fees, proximity to freeways and shopping, school districts, and the list goes on.

I'm frustrated right now because we found a beautiful place, in a developing area, and it's in our price range. It's a 3-story 1 bedroom condo with a loft and a 2-car attached tandem garage. Pictures above are pictures of the actual complex. It's only 6 years old meaning we wouldn't have to do repairs and it comes with new appliances. It seems like a no brainer right? The BF and I are having a lot of disagreements with this place.

At this point I'm stressed out.

MY POINT OF VIEW
For one, I think it's an amazing deal. Other units in this complex and area go for well over $300,000. Yes there is Mello Roos but it is in an award-winning school district, and it's near huge companies such as Sony and HP. The area around it caters to the upper middle-class to upper-class folks since surrounding houses are in the million dollar range, and if rented, they rent out for over $5,000/mo.

For a $200,000 mortgage and 20% down, our monthly payment INCLUDING taxes, insurance, HOA and Mello Roos comes out to about $1700 with a 4% interest rate (just estimating everything here). If we rented this place out, we could possibly rent it for $1600 compared to other similar places in the complex and area. Paying an extra $100-$200 is nothing to me when it's for a place such as this. When Mello Roos is paid for (which could be 5-10 years, I need to check), HOA is only $160, possibly the cheapest I've seen ever around here.

BF'S POINT OF VIEW
He thinks that the Mello Roos is horrible at $177/month. The thing with Mello Roos is that it's a bond that is being paid off due to the development of the town. This area is a newer area, and it's still near freeways and shopping (walking distance to shopping in fact). He also thinks that since this will first and foremost be an investment property (we plan to move in once I'm finished with law school), he wants this place to be rented out for the actual monthly mortgage amount. He DOES NOT think that we can rent out this place for $1,700 which is sound and reasonable. Other 1-bedroom condos in the area rent for $1200-$1300. These are places that DO NOT have attached garages, 3 stories, and a loft. At the bare minimum, we could rent this place out for $1300 but BF does not think that's worth it. He wants to actually GAIN a profit each month.

Now...
After searching for places for almost a year, I can tell you that you can't have EVERYTHING YOU WANT. You have to compromise and it's going to be difficult but you need to have your priorities in order. Location is our #1 that's for sure and definitely price/rent. I think it's ridiculous that paying an extra $100-$200 a month is stopping BF from wanting to commit to this place, because it has everything we want. In the long-term, this place is ideal for us and the community and area is wonderful. We would not have to do repairs since it's only 6 years old.

So tell me.... what do you all think? Am I being unreasonable? Obviously this post is biased to my point of view but if you have any other questions I'd be glad to answer them. I want to know if I'm being unjustified here. I am tired of searching for places and compromising on every aspect. I finally find the place that I want to invest in and buy and now there are more hurdles. How do you work things out with your significant other when you TRULY believe in something?

8 comments:

Newlyweds on a Budget said...Best Blogger Tips[Reply to comment]Best Blogger Templates

ok this is just my opinion BUT I agree with your boyfriend. Other condos are renting for $1200-1300 and they may not have a garage, 3 stories and a loft, but i still don't think those 3 things will net you an extra $300 a month. And what would happen if you couldn't find a renter? Would you still be able to make the payments on your own? Or what if there was a lap like someone moves out the 1st and the next person cant move in until the 31st?
i used to work for pr for a giant homebuilder. (starts with an L and ends with an R) and our big thing was to always promote when a home DIDNT have mello roos, because mello roos are just bad. it's like wasting your money. you dont get anything out of it. its like a tax you have to pay just for living there.
i don't know, the whole thing just doesn't sit well with me the way you described. and if your bf has any hesitation, thats definitely not the way you want to buy your first home.

Michelle P said...Best Blogger Tips[Reply to comment]Best Blogger Templates

I definitely agree with Erika. Also, if he has any hesitation, I don't think I'd go through with it just because I wouldn't want any unneeded anger later on.

shoppingtosaving said...Best Blogger Tips[Reply to comment]Best Blogger Templates

Thanks for your feedback guys - I talked it out with the BF and was irritated that he wasn't listening to me but after listening to all of his concerns I've agreed to look around more. We are still going to check out the place today though just in case!

shoppingtosaving said...Best Blogger Tips[Reply to comment]Best Blogger Templates

I forgot to mention that yes we can afford the monthly payments if we couldn't rent it out. We would love it if we could gain a profit each month but we are willing to break even and have the monthly rent cover the monthly mortgage. I am perfectly ok with paying more to cover the mortgage if rent doesn't cover it BUT like I said BF does not want to do it this way so we probably won't...

Rafiki said...Best Blogger Tips[Reply to comment]Best Blogger Templates

Actually I am with you on this one. If in the end it is someplace you will be moving into then I think it is well worth the investment. The way I see it, anything you earn as rent will be a profit because if you were moving in right away and paying the full total you would be loosing for example the full $1700. Even renting it out for $1300 is saving hence a profit.

In the end though, you both have to put your hearts and minds together and make a decision you are both happy with. Even when you compromise make sure you both are fully in it together. Don't go in with doubt in either one of you but do go in trusting each other fully.

Daisy said...Best Blogger Tips[Reply to comment]Best Blogger Templates

WEll..

Buying a place is a HUGE deal. BOTH of you have to want it - if it's your dream place and he's ambivalent, you should probably keep looking. If he's being annoying like my boy was when we were house hunting and complaining about stuff that we'd never be able to get in our price range, then... I have no words hahaha.

But I will have to say that renting is expensive. I mean, renting out to people - people don't treat rentals like it's their own, there's months where you may not be able to find renters - if it's at the top of your price range already , I'd probably look for something more comfortable. But I also live in a super expensive place like you so I know how hard it is!

Good luck girl!

bonnie said...Best Blogger Tips[Reply to comment]Best Blogger Templates

Hi there, very interesting post. I can definitely see both sides of the argument... leaning towards your perspective, save for the "mello roos" fees.

I live in Canada and so never heard of the fees before. I did some research on them and, without knowing anything about the market in California, feel like they're not such a great idea.

Firstly, apparently even after the bonds are paid off, you can STILL be charged a reduced fee (to maintain improvements)

Secondly, you are exposed to accelerated rights of foreclosure, and are subject to special disclosure requirements when you want to sell (source: http://www.co.imperial.ca.us/TaxCollectorTreasurer/Treasurer/PdfDoc/Mello-Roos.pdf)

I would keep looking, but at the same time, keep this property on your short list. It never hurts to have more to choose from than less.

Good luck!

shopping2saving said...Best Blogger Tips[Reply to comment]Best Blogger Templates

Wow - Thanks so much for everyone's input!!! Bonnie, you did so much research for me thank you:) I did look into Mello Roos and although they are always in the "nicer" areas I also hate that it's an extra fee for NOTHING. I am trying to stay away from it.

Rafiki- I was definitely thinking this way too and I will still think about the fact that it is still something I will be paying for and owning, but I have to think about money and if we can afford it.

Daisy- That was a huge part too, I have to keep in mind that we need to be able to pay for it if we couldn't find renters. I also think that I have to think realistically about my future, and whether I will even be able to work FT while going to school.

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