This isn’t a common inquiry. Looking to possibly purchase first home in SF Bay Area. We have $400k for a down payment, and thinking 800k mortgage for a budget of around 1-1.2M.
Obviously neighborhood dependent, but this seems to get us a decent but small 3/2 type SFH. Which incidentally is the upper range of what we want in size, so that kind of works out for us.
But then I had a random (and possibly crazy?) thought. $400k seems to be able to get a pretty decent 1br condo in decent neighborhoods.
Would it be absolutely crazy to just pay cash for a 1br condo (or maybe take out a small mortgage to supplement)? I know there will be ongoing expenses (property tax, HOA), but that would still be much less than our current rent (1br apt).
We are DINKs with no plan to have kids. We’ve been living in 1br apartments our entire married life. Ideally we’d like to move up to at least a 2/2, but we could make-do with a 1/1.
Being DINKs gives us some advantage, like I mentioned we don’t need or want too much space (those older 3/2 1200sqft type SFHs as long as they are well maintained and renovated would actually be an IDEAL home for us, while a starter for many others). We don’t care about schools that much, though I do find areas with good schools tend to just be overall better neighborhoods with low crime.
But anyway, is the buy a 1br condo with cash idea totally crazy? It does feel like I’m missing out on the huge benefit of using leverage with low interest rates and also tax deductions. But the idea of not having home payments is kinda cool too. And we get skin in the game in terms of real estate.
We are already 40 years old, and have a decent amount in retirement savings already as well. So the idea would be maybe live in this place for another 5-7 years, keep saving money, and then just early retire and move out of Bay Area. At that point the condo could be a rental, or we just sell.