icefr wrote:It seems like this needs to be made as a lifestyle decision, not a financial one, as it sounds like the finances would work themselves out just fine.
Ignoring money, do *you* want to live in a house versus your current condo? Does your girlfriend? Do you want to have a yard? Do you want to mow the lawn? Do you want to care about replacing roofs and cleaning gutters and siding? Do you dislike the condo you're living in now? Do you guys want to move out of it? Are all the things you want about a house worth selling your place, looking for a house, AND moving for? Do you want these things THIS year? If not, would it make more sense to stay where you are and buy a non-starter house? Going from a condo, which is a starter property, to a starter house to a non-starter house seems a bit expensive to me.
I would ask those questions and other ones before looking at the numbers since they would likely work out. I can't believe your HOA is $209/month on a $160k condo! Mine isn't much more than that on a more expensive condo.
Wow lots and lots of great questions here, thanks for taking the time to post them. I think you make lots of great points and I agree with you about going through 3 transactions being quite expensive. As for the HOA dues, they are terrible. Essentially, our property was mismanaged for most of the past 30 years and now we are trying to make up for that. Will definitely make it a lot tougher to sell!
On a side note, it is amusing to me that several bogleheads have now mentioned that the finances of the house don't seem to be quite as important. It's buying a house, for many people the financials are all that matter! Ha!
Call_Me_Op wrote:What are the downsides to living in a condo that you are trying to change?
Thanks for your response. The main things are a lack of an outside area, garage and a lack of privacy and dealing with all the people in the condo community. When I came home today there were 3 (THREE!) cars parked in non parking spaces blocking other people's access to their parking, there was new graffiti on our entrance sign and a man smoking right outside my front door. I have generally found people to be inconsiderate of others and the fewer I have to share common living space with, the better.
Watty wrote:It was not clear if you would be buying the home together or if you would be buying it just in your name.
Buying a house with someone you are not married to can cause lots of problems if the relationship does not work out so it would be a good idea to not buy the house together if you are not ready to get married. Do not underestimate the chances of there being problem in the relationship, I can understand not being ready to get married yet but that should also be a clue that you are not ready to buy a house together.
If you do decide to buy the house together then you should have a lawyer draw up an agreement on how the house will be handled if you split up.
You have a lot more assets than she does so you should also talk to a lawyer about what sort of pre-nuptial agreement would be appropriate. You have enough in your taxable account so that you would have the option of buying the house for cash before you are married and that might be one way to help protect your assets if you get married then get divorced later.
Be sure to look at the PHD programs completion rate, there is a significant possibility that she will not finish the program. It would be good to wait until she has at least finished the first semester to see how she does in the program. If she drops out of the program after a semester or two it would be awkward if you bought a house to live in while she is in school.
Planning to live in the house more than four years is likely not realistic since once she graduates it is likely that her first job will be in a different city since PHD positions are sort of specialized. Even if she finds a job in the same city it might be across town and a terrible commute from the house you buy.
You bring up questions that I am unsure of the answer to. I think I would buy the home under my name, but I'm not sure how that would work if we got married afterwards. We have been talking about marriage and I believe we will probably get married within the next year or two, but neither of us want to rush into it. I don't think either of us have any doubt that we want to get married to each other, but don't see any reason to hurry into it. We have also discussed a pre nuptial agreement and she is more than ok with it since that is one of my concerns about marriage and she wants me to be 100% comfortable with it if we do end up tying the knot.
I like your idea of making sure she has finished at least one semester/year of school before purchasing a house. However, she is one of the hardest working people I know and really loves being in the laboratory, which is the majority of the work on her PHD would be done. As an example of her work ethic she worked full time (30+hrs/week) while going to school full time (12 credit hrs) and also volunteering in the lab 15-20hrs/week. I don't think the workload will be a problem for her and her love of chemistry should help her get through some of the frustrations that go with a PHD program.
In terms of our plans after her school, I hadn't considered her having to move. One of the main reasons she wanted to go to our local school is that the chemistry research community here is quite vibrant and has deep connections with the school. Hopefully, she would be able to find a good job here. However, I think you are right that we shouldn't assume that we will be living here after she is done with school.
The neighborhood we are looking in is very centrally located and wouldn't be more than a 15-20minute commute from just about anywhere that she would potentially be employed. Again, a very good point to bring up and one that we hadn't truly considered, though we are considering drive times to more than just our current work and school.
Thank you very much for this thought provoking reply. We will probably spend the evening discussing the points you brought up!