You might want to buy a condo, but perhaps you have a sneaking feeling it’s the wrong move. Maybe you feel like you’re being pressured into it, or you just get an anxious tension when you go out hunting. Maybe your gut is telling that you are not ready to buy – yet.
After checking out our list of reasons why buying a condo may be right for you, if you’re still not sure, here are six wrong reasons to buy a condo – in other words, if these are your main motivations, you should probably pass for now.
1. All Your Friends are Buying. And you thought peer pressure ended with high school. No, in fact. If a lot of your friends are buying and you’re not, you’re going to feel left out, but that doesn’t mean you need to run out and buy a condo. You’re at your own place in life. If the fundamentals aren’t there for you, don’t buy.
2. You Need a Fast Investment. Yes, buying property can be an investment. And, yes, it’s quite possible that if you buy a condo, you’ll end up making money. That said, you’re by no means guaranteed to make money. In fact, you could lose a lot of money. For the most part, it depends on the housing market, which is out of your control. So, unless you’re a professional real estate investor (given that you’re reading this site, we’re guessing not), buy because you want a home and want to build equity. Not because you think you’ll make a quick killing.
3. You’re Getting Older. Some people feel like they’re not a “real” adult until they own property. Let’s put this notion to rest. There are plenty of successful, mature, happy adults who rent. If renting is best for you, renting’s best for you. End of discussion.
4. Now’s the Perfect Market. You’ve talked to a realtor, who says there’s never been a better time to buy. Interest rates are at historic lows. The bubble is long since burst, so you know you’ll get a good value. And so on and so forth. At My First Condo, we definitely advocate studying the market before buying – but if a good market is the only reason you’re buying, you may rush into a decision you’ll regret.
5. You Think You’ll Save Money Now. Yes, if you own you can get a tax break, and yes, for the same monthly payments (escrow payments and Association dues included) you’ll have a nicer place than if you rent. And, yes, when you own, a portion of your monthly payment is building equity.
Even so, renting is cheaper short term. First, if you own, you’ll need a down payment (which you hope to eventually get back – and more – when you sell, but which ties up a large amount of cash), there are significant transaction costs (which you don’t get back) and you’ll need a maintenance fund to cover expenses like new appliances, fixing the unexpected break-downs and regularly servicing things like your heating system. The general rule of thumb is that to save money by owning, you need to live in a place at least five years – and hope that the market doesn’t drop.
6. You Just Got Married. For some, buying a condo is a natural progression after a wedding. For others, it’s not. Don’t buy a condo because it’s “what you should do next.” Instead, really think about whether it’s the right decision for you and your spouse.
In all these situations, the key is considering all the factors involved in a purchase. Many of the “wrong” reasons above aren’t necessarily wrong – in the right situation, they can be great reasons to buy, provided they’re one of many reasons you’re making a purchase.
In buying a condo, as with any big decision, the key is considering the whole of the situation and really working through what you want and why – and then deciding whether it’s realistic. If you take the time to do that, you’re far more likely to make the right choice.