Deciding on Property to Buy: Life vs. Financial Decision

When you are looking at buying property, there are two ways to look at the decision: life and financial. Both sides must be in agreement for this to be a good decision. I talked previously about deciding how much I could afford to spend financially.

In all honesty, I think that the best long-term investment would have been a 3 bedroom townhouse with 2 full bathrooms. Assuming that the person I want to marry doesn’t already own a place, we could easily raise two children in a 3 bedroom townhouse. The down payment and monthly housing costs would have been low enough for me to afford them on my income, which would mean that they would later be affordable on one income between two people.

The best short-term investment probably would have been a 1 bedroom condo since they are in the price range of the high $100’s to the mid $200’s. This would have reduced my monthly housing expenses now, not required me to borrow very much from my other savings buckets. The HOA dues would have been lower with the lower square footage than a 2 bedroom. With the low cost of the monthly payments, I could have paid off the loan faster and/or invested more. I would have been taking out a smaller loan since the total cost of the condo would have been less and I would be paying less interest. My property taxes would be lower.

So why did I pick a 2 bedroom condo over a 2-3 bedroom townhouse or a 1 bedroom condo? It is still in my monthly and upfront price range. It had 2 bathrooms instead of just the one in the 1 bedroom condo. It is a corner unit, so it doesn’t share very many walls with other units. Notably, the master bedroom doesn’t share ANY walls with another unit. It had a lot more windows than the 1 bedroom condos we saw (except for one that was a corner unit). It felt like a home. The condos felt more secure than the townhouses since there is no external door directly to my unit. As a single woman living alone, safety matters a lot to me. The condo I ended up choosing is centrally located to a lot of neighborhood amenities like restaurants, bars, gyms, libraries, grocery stores, and pharmacies and on a direct bus line to my current office. The townhouses that I was looking at were further away and buying a townhouse in my price range on a direct bus line to work would have taken quite a bit of patience looking for the right deal.

I pretty much knew that I was going to buy the condo I ended up putting an offer in on as soon as I walked into the unit. Maybe I’m completely crazy for making this particular decision based on emotion rather than straight-up numbers, but it’s also important that I’m happy in the place that I chose. I think that the numbers will be fine in the long run. Last year, I borrowed money from my down payment savings account to fund my vehicle purchase and within 5 months, the down payment savings account was back up to its previous value. My emergency reserves will not dip below $10,000 and at today’s stock price, my taxable investments and emergency reserves would be fully paid back by the end of July.

I could have chosen to stay in my apartment for another year, dealt with the crazy rent increase, and continued to save money towards a down payment. That probably would have been a “safer” move financially. I want to stay in this city for the foreseeable future – I could even see myself retiring here – and I think I’m ready for a change from my current place. But buying a condo just makes sense. I’ve run the numbers, I’ve thought through the life decision and the process, and I’m still definitely on board. So I’m doing this. This is real. This is happening.

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4 thoughts on “Deciding on Property to Buy: Life vs. Financial Decision

  1. I bought my condo just out of grad school, when I was single. I, too, knew I was going to buy my condo when I first walked in, even though I still had to look at several places. Unfortunately, your primary residence is not an investment, it’s just a place to live so you had better really like it.

    Six years later I am still living in my 2 bedroom condo with my husband and two children. We need a house, eventually. But as we’ve been looking we just haven’t had the ‘this is my home’ feeling you talk about with any of the houses we have seen. And we love the condo so much, it sets a high bar for a house.

    Anyway, I think you made the right decision. Since your home is not an investment, I strongly believe you should buy what you like as long as it’s in your budget! And if you like it so much, most likely the next buyer will see how special it is when it does come time to sell it.

    Enjoy!

    • Wow, I couldn’t imagine living in my 2 bedroom condo with a husband AND two children!

      I picked my current apartment mostly because I fell in love with the floorplan online and then loved it when I walked around it in person. I think the condo will be even better. I keep worrying about the location of the neighborhood that I’m moving to, but I’m sure that I will find friends who live over there as well.

      My original budget was to buy a $250,000 place and then put 25% down, but I ended up buying a place in the low $300s and putting 20% down. (So about the same upfront costs, but a slightly larger place or closer to the city than what I had originally been looking at.) The extra size of the loan is definitely a bit difficult to deal with mentally, but I think that it is the right property choice life-wise and it definitely still fits in my budget.

      I’m glad to hear of a story where it worked out for a single woman buying a condo alone! It sounds like the 2 bedroom versus a 1 bedroom allowed a lot more flexibility for you, which is exactly why I picked it over a 1 bedroom.

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