Would you buy a smaller 2 bedroom condo or townhouse (for $200-400k) knowing you'll outgrow it in 5 years (once we have kids) or just wait and rent until you buy a bigger house ($700-800k)? We have about $400k savings (mix of cash and mutual funds) and TTC is $375k. Nervous about layoffs and having a big mortgage in this economy. But also we are so sick of renting and dealing with property management companies.

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Bigger is always better

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Buy smaller now! My spouse and I got a two BR townhome when we got engaged because I was overwhelmed trying to pick a suburb/school district for the long term. Thank goodness. We never ended up having kids and now 10 years later our total housing cost has dropped to 16% of gross income as our incomes have risen. We nearly have our 15 yr fixed mortgage paid off and still enjoy short commutes and feel like we have roots in our neighborhood.

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I guess it depends on how you see the housing market going in your area. You could outright buy the smaller house right now if you think at they end of 5 years you would have made capital gains. Also, a smaller house would give you a chance to see how owning a property would actually work for you. Completely different dynamics then renting.

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Never ever ever a condo. They are an evil invention.

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Value. They won’t gain much equity in five years and will spend more in fees and assessments than they gain.

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Yes, buy that starter home. You don’t know when you’ll actually have the kid and you’ll miss out on years of equity building

Edit: I just saw how much you have in savings and your ttc. Wtf buy the bigger house

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Just nervous about layoffs and overall job market. Trying to get the mortgage down to something feasible on 1 salary instead of 2.

Bigger house, especially if you are dreading the smaller place. Transaction costs for buying and selling real estate are so high. And there’s no guarantee that in 5 years the value of the smaller place will go up to a point where you make money or even break even depending on all the work that you need to do to it.

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I was in similar situation. I ending up buying a 3 bed $540k townhouse last year on a $450k hhi . No kids yet and no experience owning a home before. My wallet thanks me , I don’t spend lot of time with maintenance and upkeep and learning a lot about plumbing , electrical and other basic homeownership stuff along the way. Plan to continue saving with extra money and move to a bigger place in 4-5 years ( once we have a kid hopefully )

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Are you in an area that will always have demand if you go the condo route? Like a NYC, Miami, Atlanta

I’d go townhouse, put 25% down on a 400k place and I’m sure it’d be surprised if it wasn’t able to cash flow at least a little. Continue to save and move into the bigger place when the time is right

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Dumb question, what is TTC?

TTC - total target comp if in sales. But here it was a typo -i meant TC - total comp

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