Is it a bad idea to buy two houses at the same time?
March 30, 2014 10:55 PM Subscribe
My fiancé and I have been planning to buy a home this year. This will be the first home purchase for both of us. We currently live two hours apart, and I'm trying to move closer to him, which is where the house will be. However, there's a chance I'll be stuck where I am for another year due to job-hunting difficulties. I recently learned that the condo across the hall from me (where I rent at my current location) is up for a sale. I think it would make a great investment as a rental property down the line. Is it crazy to buy this condo as well as a house with my fiancé in the same year?
posted by redlines to Work & Money (11 answers total) 1 user marked this as a favorite
Some background and clarifications:
- There's about a 50% chance that I can't move to fiancé's city this year. I'll only know in late April or May. Hopefully, I will be able to move there with a much higher probability next year.
- I'm only considering buying the condo at my current city if I end up staying here this year. It turns out that the mortgage and property tax is quite a bit cheaper than renting, and if I stay at my current apartment, I'll have to pay rent anyway! It's tempting to channel that into a long-term investment since this area is a huge seller's market when it comes to renting, and it will be nice to have a little income generator down the line.
- Fiancé has been talking of buying a house together for some time. His lease is up this summer, and he is reluctant to either stay in his current apartment, or move to a new rental apartment. He's moved around a lot recently, and having some sense of permanence is important to him.
- My parents have generously offered to help me with the downpayment on my current city's condo, so I'll be able to afford a 20% downpayment for both places. (If, upon further investigation, it turns out that the finances won't work out, I certainly won't do it.)
- The two cities are in different states in the US.
- We're getting married in the summer, and hope to close in on the house in fiancé's city around that time.
- If I stay here, we will have to maintain separate residences. For career and geographical reasons, living together midway and commuting an hour is not possible. (We don't have jobs with fixed schedules, and the midway points are wastelands.)
Our tentative idea is that if I stay here, I get on the mortgage on my current city's condo, but not on the mortgage in fiancé's city's house. I'll put in my share of the downpayment for both places. When I move to fiancé's city next year, I'll rent the condo and add myself to fiancé's mortgage.
My concern is that I'll have two mortgages going at the same time, which seems a bit too much for an inexperienced first time home-owner, although one mortgage will be covered by rental income. I'm just not sure what the banks think of this sort of arrangement.
Are there any other legal, financial, or logistical issues that make this a bad idea? Or do you know people who did something similar?