I am 23 years old, and I currently have around $200,000 of free capitol and zero debt. I make a salary of $120,000/year (75K clear).
I work in NYC, and my work will be moving to NJ (but will still be close to the city). I have done my research and I think the Hoboken area fits the living/lifestyle needs I am looking for (fun night life, commutable to NYC/NJ, safe area etc). I do not know whether to put a down payment on a place or to just rent each month (given my situation). In the future if anything changes (work, family etc.) I plan to rent to property out in hopes to have a cash flowing asset, while gaining equity over the long term.
Purchasing a house at this age seems scary, but then I think renting does not seem like the best financial decision. PLEASE HELP!!!!
@Chris Toler Looking back at how I did things, I wish I purchased my first property at a younger age. Hoboken and Jersey City are uniquely positioned for growth and have a great rental history.
You can do a lot with the capital you currently have. My recommendation would be to start with a condo or multi-family. My most recent clients purchased a $680k single family home in the Jersey City Heights with 5% down and a 2.5% interest rate.
They plan to live in it for about a year and move on to their next property keeping it as a rental in the future.
I live in Jersey City and concur on your thoughts regarding Hoboken.
Here are my 2 cents given your age/expectations and based on my experience: rent in Hoboken for a year that covers all four seasons.
It is a great place as it has all the life and fun, and yet a ferry/train ride away to Manhattan. You can also take the suburban trains to for all games, and the local lightrail to other places north. The views of Manhattan and the walk across the water is superb.
Note that some buildings might be dated and its streets prone to flooding when it rains heavily. Since your company has moved to NJ, I am not sure if that involves driving. If it does, parking can be irritating unless you have a garage. And, after six months, the noise and dense surrounding can be a bit tiring especially if you live close to Washington St and the Path station.
If you rent for some time, you get to experience everything and if you like the city, you can pinpoint what buildings and what streets you like more or those that suit your tastes. If not, you now have a better idea of what suits you without needing to make that downpayment.
And, if you are able to arrive @ that decision say within 3 months, you can always break the lease or sublet.
None can predict how prices will move. It looks soft in the cities now, but if this darn pandemic is under control and businesses close to their usual capacity, it might change quickly. So, if you are fine with holding on to the cash for some more months, continue educating yourself on this excellent site on how to evaluate properties while at the same time evaluate what kind of place you would like to live in. :)
I have been in the JC/Hoboken area for about 14 years. I bought at a young age, "house-hacked" before I even knew what that meant! (i just called it having a roommate) and back then I was commuting to midtown, it has worked out beautifully, despite the sharp economic downturn shortly after I purchased. I also own a rental unit in Hoboken for the past 6 years. If you have any specific questions about Hoboken or anything, I would be happy to help answer them. Of course, it's your call and you have to be comfortable with your decision. I would buy, knowing that if your circumstances change, you will likely be able to hold the property and rent it out, fairly easily.