Many younger first-time homebuyers purchase one-bedroom condos, small two-bedroom homes, and PUDs. They don’t stop to think that in a few years their home will become too small when kids come along and/or their income increases. Too often, these smaller properties are hard to sell and accumulate less equity than homes with two or more bedrooms will.
Nick found this out when he bought a one-bedroom condo after he got his first job right out of college. Hearing that it’s better to own than rent, he visited a new condo project. Smitten by the amenities and lifestyle image the development offered, he bought one and lived there for two years.
After meeting his one and only, Nick got married and the couple lived in the condo for two more years; when a baby came along, suddenly, the one-bedroom became a tight fit. A bigger home soon rose to the top of their priority list and they started looking. There were some nice homes they could afford, but they would have to sell the condo first.
So Nick talked to a realtor and found out that because quite a few units were for sale, getting a buyer was going to be a slow process. To sell the condo, he would probably have to discount it close to what he owed because other owners had dropped their prices to rock bottom. The condo has been on the market a year now, and there haven’t been any offers. Nick is seriously considering renting it out if he doesn’t get an offer in another couple of months. As Nick learned the hard way, before you buy property, think about how long you intend to live there. Remember that the average homebuyer stays in the home about six years. So it’s important to do some what-if thinking before you commit.
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