Vail Daily column: Condo or house for a young buyer?
My daughter is considering buying her first home in the near future. She is set on getting a single-family home with a garage and a yard. She is an adult, but she often comes to me for consultation and advice on important issues in her life. I usually am a sounding board and usually support whatever she wants to do. However, I am worried that she wants to bite off too much this time and would be better off starting with a small condo or maybe even a town home. I would like to hear what you have to say. Don’t you think a young woman would be better off with a condo with no outside maintenance? Thanks for any words of wisdom.
You should feel very special that you have a relationship with your adult child that includes important life decisions. You are also very wise to give consideration before answering the question. There are a lot of things to consider. Is your daughter a capable, responsible young adult who has been managing her life and money well for her age? I suspect so, or she wouldn’t be considering one of the most important decisions of her financial life. To stop paying rent, start acquiring equity and receive tax benefits is often the first step to financial independence in today’s economic environment.
According to Heather Perlberg and John Gittelsohn in the Bloomberg News, “Home prices have gained about 25 percent nationally since early 2012.” Where can you make an investment that pays those kinds of dividends? Financial benefits will apply no matter what type of property she chooses to call home. I can speak highly of both investments. If you look at the financial/Wall Street world, there are lots of REITS (Real Estate Investment Trusts) that acquire huge blocks of apartments and condos for terrific rental income. There are also huge investment trusts that buy large blocks of single family homes. Sunday’s paper last week spoke of Cerberus Capital Management purchasing 4,200 single-family homes for rentals in the near future. So there is income value in both types of homes.
As far as which type of home to buy for your daughter, it will depend on her desire and ability to care for a single-family home. As a general rule of thumb, for resale, single family homes sell quicker and easier than multifamily homes. That being said, many factors such as the buyer’s age, desire to travel, maintenance concerns, etc., make multifamily homes more desirable to a certain segment of the population, especially in a resort area.
I would just help her weigh all of the pros and cons for each and then direct her to a seasoned Realtor who can also show her all the advantages and negatives of many properties so that she can make an informed decision. The Realtor will also direct her to get pre-qualified for a loan so that she will know what price range to consider. Once she has seen the payments, HOA fees, taxes, condo fees (if applicable) and estimated maintenance costs, she will have a more realistic picture of what her first home purchase entails. A knowledgeable, concerned Realtor is the key to your daughters success in picking the right property. Ask around, find someone good who will work hard to help her find what she needs and wants. Thanks for asking.
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up her own real estate team. Harned has sold real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact her with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or http://www.SkiAndTeeHomes.com.