[quote=yipla]On schools, right now we’re just not that concerned because we don’t have kids. When the time comes, we might re-evaluate and move to another neighborhood. Or do the private school thing.
On HOAs, I also just can’t stand them. I come from a family that does not like neighborly intrusions on our business. And I can’t stand the idea of making a monthly payment for the rest of my life, without building any equity, and with little control over the amount of the payment.[/quote]
The only problem with that is you build very little equity in the front end of a 30 year mortgage. I see that you’re planning to rent this unit out so maybe that doesn’t matter to you. If you do plan to sell you only have about 9.5% equity at the end of 5 years and a little over 20% equity at the end of 10 years. After a 5-6% commission in year 5 of a $500K mortgage you have about $15K in equity left over. Your total payments have been a little over $100K, you’ve paid $30K+ in property taxes so you’re really -$15K after those first 5 years and I have not even included any maintenance.
In the old days you could count of appreciation to accelerate equity building but I’m not sure that’s a safe bet right now. We’re at the high end of affordability right now and the two relief valves for that are higher incomes or lower interest rates. Neither of which seem real likely.
