So I am 26 years old and really have very little experience with real estate. That being said, I am at a conflicted crossroad where I'm trying to decide if I want to just move out of my parents' house and just rent, or try to buy something, live in it, and hope the investment works out in the end.
Downtown LA is expected to grow rapidly as it has been, predicted 7-10% rise in value by next year. The market is red hot, things get picked up in a matter of weeks, so I really have no idea what inventory is left out there.
I was looking in the $300,000 range, (I would put 20% down, 30k from me, 30k from my parents). I'm not sure how much inventory is left out there, DTLA is known to be in a condo drought, everything new that's being built are only for rent. This realtor I met by chance has been trying to persuade me to buy his unit below.
HOA fees are $451 a month, Interest rate I can probably get around 4%.
Basically this is my dilemma: I expect to live here, maybe maximum 5 years. I can't see myself for 10. If I had to leave for any reason sooner, would it be easy to rent this property out? Would it be easy to sell short-term? I've heard of this 1% rule for rent (339,000=3,390) and this unit would definitely not rent for that much. Still, a renter could probably cover my mortgage+tax+HOA.
I'm sorry if this is kind of scattered, I guess my real problem is I'm not sure how safe of an investment this could end up being: Downtown LA is expected to rise in value, but will that particularly apply to a condo like this one? Naturally as a young guy, I have some fears about buying and being stuck in longterm commitment, I'd just like some reassurance to anyone familiar with the LA market that I'd have options and could reasonably hold this property as an asset either to live in or rent out. Also, if anyone has any tips or sources of information for a complete beginner to get into the world of being a property owner, finding renters, managing your property and money, etc. I would really appreciate!
Homes always sell and lease, especially if its in a high rise in DTLA.
Right now, the housing market in LA is perhaps at its peak. You are going to pay top dollar for whatever you purchase. Although LA is expected to grow, that does not necessarily indicate housing prices are going to continue rising.
What are your goals of buying?
My goal is basically to move to Downtown because I really like what's been happening there in the last few years, and avoiding rent and doing something productive with the money other than throwing it away. My goals honestly aren't even long-term. I figured that, well I want to live in downtown, properties are expected to rise so I'm not going to lose value, and of course dodging empty rent. It'd be great to rent the place out down the line but I'm not even concerned with that, unless of course it really just doesn't work out with me being happy living there.
The general sentiment that I've been hearing is that now is a great time to buy still (low interest, qualify for loans, etc.) and that time is "running out" so to speak on Downtown properties because value is continuing to rise. My dilemma is that if I don't act now, I may not be able to find something in the next 3-6 months within my affordability (300k-340k). I don't know if any or all of this is even totally true, so I'm just really not sure. Truthfully, my head is more in the place of wanting to rent for 6 months - 1 year, then maybe buying. Like I said though, in a year from now, there may not be anything I can afford in downtown, so I feel some pressure in this moment.
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