When does it make sense to invest in a condo?

[Nick Brubaker]

Hello all!

My wife and I are in somewhat of a uniques situation and we are trying to decide if purchasing a condo makes the most financial sense:

We recently moved back to the Atlanta / Decatur area after 5.5 years in Japan. We are between employment and staying with my parents - and in a hurry to move out and live on our own again. Not having steady income will make obtaining a loan at a good rate quite difficult, particularly with our time frame. Fortunately we do have about 100,000 available to put toward both investments and our own property (if buying does in fact make the most sense at this point).

We're trying to make the best financial decision. If we spend the entire 100,000 on the property we ourselves will live in than we would want it to be a multifamily or for the layout to be conducive to additional tenants/renters. Another strategy would be to aim to spend half that on a property for ourselves alone (just came from Tokyo and are used to small units) and invest the other half separately.

Anyway, there are plenty of SFH's for around 50,000 in and around Atlanta, but they are hard to find in areas where we would be comfortable enough living. There are condos available in the same price range in much better areas. The issue is that the condos we are looking at have monthly HOA fees of $250 (not including utilities) and rental restrictions (15% of total units) with long waiting lists. We are trying to crunch the numbers on these condos like we would a detached SFH and even add in the total HOA fees for the two years we would plan to live their as if these fees were any other rehab expense, as a way of comparing this option with the straight out SFH option. I am also doing my best to compare these options to simply renting.

Anyway, I am very interested in hearing the insights, opinions, and experiences of other BP members about whether or not condos can make better financial sense for a first-time homebuyer/investor looking for a low-cost property for themselves. I realize that a lot will depend on the specifics of the situation - I am happy to provide more details.