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Started By
Message
Is condominium near LSU worth to Buy?
Posted on 4/3/16 at 10:29 pm
Posted on 4/3/16 at 10:29 pm
Lurking in this site for awhile. Now I am thinking about buying a condo near LSU since my wife and I both attend LSU for graduate school. Just looking around the Bright side area, the two bedroom condos in this area cost around 90k to 130k. I plan to make 50% down payment and pay mortgage every month. It make more sense than paying rent every year.
Any advice on my plan?
Thanks
Any advice on my plan?
Thanks
This post was edited on 4/3/16 at 10:36 pm
5
Posted on 4/3/16 at 10:34 pm to aa445544
No.
Posted on 4/3/16 at 10:35 pm to oVo
Hi, OVO
I will appreciate it if you can give a detailed explanation why it is not feasible.
I will appreciate it if you can give a detailed explanation why it is not feasible.
Posted on 4/3/16 at 10:59 pm to aa445544
Are you gonna live there at least 5-10 years? If not, I personally dont think its worth the hassle. There's loan origination fees, there's property taxes, there's maintenance and there's closing costs to buy and sell the place. All in before you know it your $130,000 condo is going to need to be sold for $150,000+ just for you to break even. Getting a mortgage on the place is good if you do a 15 year, a 30 year would be a waste bc you'd be making say $350/mo payment on $65k and $250 or so would be interest.
If you're thinking of owning it for the short time you're in grad school then selling it, I say no. If you plan on keeping this post grad school and living in it, go for it. If you want to keep it and rent it out to college kids, thats a whole different question that I dont have the answer for, but I personally wouldn't want to rent apartments to college students.
Personally, I don't know the baton rouge condo market, but is the difference between $70k and $130k that big? I mean you sound like you have a ton of cash, I think you're better off paying cash for something and not dealing with the fees of originating a mortgage + you can get some sellers to really give in when you're paying with cash and are willing to forego the whole process of getting approval, a quick close is very attractive.
If you're thinking of owning it for the short time you're in grad school then selling it, I say no. If you plan on keeping this post grad school and living in it, go for it. If you want to keep it and rent it out to college kids, thats a whole different question that I dont have the answer for, but I personally wouldn't want to rent apartments to college students.
Personally, I don't know the baton rouge condo market, but is the difference between $70k and $130k that big? I mean you sound like you have a ton of cash, I think you're better off paying cash for something and not dealing with the fees of originating a mortgage + you can get some sellers to really give in when you're paying with cash and are willing to forego the whole process of getting approval, a quick close is very attractive.
Posted on 4/3/16 at 11:18 pm to aa445544
Grad school is what, 2 years? You plan on staying there after that?
Posted on 4/4/16 at 12:03 am to dabigfella
Thanks for your opinions.
I would graduate in 1 year while my wife will stay in lsu for another three years. If we are renting, it will cost 10k per year. But the condo just cost around 85K. It make sense to buy one rather than spend 30k rent, especially considering the condo just cost 85K. Let do the math: 85k investment, 30K return in 3 years. It is kinda like 10% annual return.
My future plan will be renting this condo to students once we finished our school
I would graduate in 1 year while my wife will stay in lsu for another three years. If we are renting, it will cost 10k per year. But the condo just cost around 85K. It make sense to buy one rather than spend 30k rent, especially considering the condo just cost 85K. Let do the math: 85k investment, 30K return in 3 years. It is kinda like 10% annual return.
My future plan will be renting this condo to students once we finished our school
Posted on 4/4/16 at 12:06 am to TheIndulger
No sure. I am doing a PHD in Petroleum Engineering. You know the job market is really dimmed since the plummet of oil price.
Posted on 4/4/16 at 5:12 am to aa445544
I usually do not buy a house unless I'm going to be there 5 years.
That being said, I'm sure others have made money in shorter time frames in the right market.
That being said, I'm sure others have made money in shorter time frames in the right market.
Posted on 4/4/16 at 6:52 am to aa445544
Your entire 30k investment would not go towards your principal.
If you pay $850/ month like you're planning the break down will probably be something like this
$85- property tax
$85- insurance
$25- condo grounds maintenance
Of the remaining $655,
$255 Interest
$400 Principal
So $400/month for 3 years is $14,000 removed from principal
Your 130k condo actually costs 135k with closing costs etc so after your 65k down you owe 70k
After subtracting your $14,400 you owe $55,600
Add your 65k back to that you are at $120,600
To find what you would have to sell for to recoup your $120,600 after 6% realtor fees, divide it by 0.94 which gives you $128,000
You would make $2,000 if everything goes 100% perfectly and nothing breaks.
If you invested your 65k with 3% return you would be better off after 3 years
*My numbers are just estimates but I'm just trying to give you the idea of the true cost of buying something for 3 years without any appreciation or getting a good deal on the purchase price.
In 3 years ou are going to have a tough time renting a condo that costs 90k-130k now around LSU. There are so many student housing complexes going up now.
If you pay $850/ month like you're planning the break down will probably be something like this
$85- property tax
$85- insurance
$25- condo grounds maintenance
Of the remaining $655,
$255 Interest
$400 Principal
So $400/month for 3 years is $14,000 removed from principal
Your 130k condo actually costs 135k with closing costs etc so after your 65k down you owe 70k
After subtracting your $14,400 you owe $55,600
Add your 65k back to that you are at $120,600
To find what you would have to sell for to recoup your $120,600 after 6% realtor fees, divide it by 0.94 which gives you $128,000
You would make $2,000 if everything goes 100% perfectly and nothing breaks.
If you invested your 65k with 3% return you would be better off after 3 years
*My numbers are just estimates but I'm just trying to give you the idea of the true cost of buying something for 3 years without any appreciation or getting a good deal on the purchase price.
In 3 years ou are going to have a tough time renting a condo that costs 90k-130k now around LSU. There are so many student housing complexes going up now.
This post was edited on 4/4/16 at 6:57 am
Posted on 4/4/16 at 7:59 am to aa445544
I have a 2 bed/ 1.5 bath condo for sale for 110,000 right by campus. Post your e-mail if you're interested.
Posted on 4/4/16 at 8:12 am to boosiebadazz
Just curious how much do you get in rent per month?
Posted on 4/4/16 at 8:13 am to Finch
I get $900 right now. I've gotten $950 in the past.
Posted on 4/4/16 at 2:52 pm to boosiebadazz
feelthewonderfulworld@gmail.com
Posted on 4/4/16 at 3:18 pm to aa445544
quote:
Let do the math: 85k investment, 30K return in 3 years. It is kinda like 10% annual return.
Where are you getting this 30K return number from? How do you know you will net 30K in 3 years AFTER all of your expenses???
Posted on 4/4/16 at 3:32 pm to MikeBRLA
Also I dont know if realtors in baton rouge are cheaper but if you rent out your place where I am now, its 10% of the total lease. So $900 x 12 is $10,800 -$1080 and you net 9,720 which is more like $810/mo.
You say between $80-130k and willing to put 50% down meaning you have up to $65k. If thats the case then buy the $85k condo but I don't know whose gonna finance a small note like that if you're putting up all that cash but not enough to pay it off.For you to return $30k in 3 years is doable in the sense that you pay it off and have literally no bills. I own a few sub $100k properties and they do not appreciate, they're great for cash flow, in my case I rent to my employees and control the rent. In your case you will be renting to college students who may or may not trash this place. Its not a bad buy if you pay cash, sub $100k properties are great investments, for cash flow.
You can get a mortgage for the place, I suggest you pay it off as soon as possible, carrying a mortgage is great when you pay 4% and a property has more than that in upside, this one more than likely doesnt, so cheap money probably isnt a good idea here when you're paying interest you probably won't recoup.
You say between $80-130k and willing to put 50% down meaning you have up to $65k. If thats the case then buy the $85k condo but I don't know whose gonna finance a small note like that if you're putting up all that cash but not enough to pay it off.For you to return $30k in 3 years is doable in the sense that you pay it off and have literally no bills. I own a few sub $100k properties and they do not appreciate, they're great for cash flow, in my case I rent to my employees and control the rent. In your case you will be renting to college students who may or may not trash this place. Its not a bad buy if you pay cash, sub $100k properties are great investments, for cash flow.
You can get a mortgage for the place, I suggest you pay it off as soon as possible, carrying a mortgage is great when you pay 4% and a property has more than that in upside, this one more than likely doesnt, so cheap money probably isnt a good idea here when you're paying interest you probably won't recoup.
Posted on 4/5/16 at 12:46 am to dabigfella
Thanks. I plan to buy a condo with full cash at 80-85K.
Posted on 4/5/16 at 8:47 am to aa445544
4 years of grad school would be 48 months. 90k/48months = $1,875/month. You can do much much better. The only good thing is that you could sell it at the end of grad school.
Posted on 4/5/16 at 9:05 am to dabigfella
If he lives there for graduate school then leases it for rmore than the note, each month this happens you can subtract that amount of rent off of your 150k sale figure.
Well we'll worth it since demand will NEVER go away. (unless JBE shuts down LSU :( )
Well we'll worth it since demand will NEVER go away. (unless JBE shuts down LSU :( )
Posted on 4/5/16 at 9:11 am to GeeOH
quote:
each month this happens you can subtract that amount of rent off of your 150k sale figure.
Do you even DCF, bro?
Posted on 4/5/16 at 12:39 pm to GeeOH
quote:
Well we'll worth it since demand will NEVER go away. (unless JBE shuts down LSU :( )
I think demand for 80k-150k apartments will go way down as the new places get built
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