Searching for a property in the Iowa City/North Liberty Area (Iowa)

[Faisal Farnas]

Hello Fellow BP'ers,

I am looking to buy my first home in the Iowa City area. I currently live there and have been for the past 6 years (went to school, the got a job). The catch is that I am not sure if I will stay in the house for more than 2 years, so I want to buy something that I can either rent out for a decent cash flow after I move, or sell for a little bit of a profit. I think I am done renting, so I do not plan on renewing my lease. I have enough cash for 20% or even 30% down no problem and I am absolutely debt free.

I cannot decide between Iowa City (college town) Vs. North liberty (a burb 15 minutes from Iowa City).

According to my research, here are the pros and cons of both cities. I am looking for general or specific advice from experienced people, anything will be helpful so please do not hesistate:

***** Iowa City *****

Pros:
- Proximity to campus and the hospital makes it very easy to sell or rent out when the time comes.

- Rents are higher than other cities ( a $90k condo can rent for $850 a month, a $140k townhome can rent for about $1250 per month).

Cons:
- The most expensive real estate in Iowa
- There is not much appreciation in the values year over year.
- Hard to find good deals - those are snatched instantly.
- Prices were almost not affected by the recession.

***** North Liberty ****

Pros:
- Lots of new contruction.
- Plenty of cheaper and newer homes for sale.
- Area is expanding with more grocery stores/restaurants ...etc. This could mean more price appreciation when new construction finally stops?
- Prices went down slightly from 2007 levels, so potential to earn for appreciation if the market continues to rebound.

Cons:
- Could be harder to sell or rent out (why would people rent there if they can buy a relatively new home for a similar monthly payment?)

- Rent is cheaper than Iowa City. (further away from campus, mostly families live in the area and generally prefer to buy rather than rent).

I am looking for eather an apartment style condo in the $80k-$100k range, or a small townhome around 12k sq feet for around $120k-$140k range. Newer is better, as I don't want to deal with a lot of repairs at the beginning.

Regards,
Faisal