Arrgh! Too Much!!
If you can't afford a single family home, here are some other options to consider.
Thursday, February 26, 1998
Condominiums and townhouses are, on average, less expensive than single family homes. The average sale price for condos and townhouses in Monterey County in 1997 was $244,500 compared to $354,800 for houses. There are disadvantages to this alternative, though. As a rule, these properties don''t appreciate as much as houses do. Homeowner''s association (HA) dues will add to your monthly payment, and HAs generally have rules residents must abide by. It''s a good idea to read through the rules before you buy to make sure they won''t cramp your style too much. Some HAs may have very specific rules limiting your choices in landscaping, outside paint, visible draperies and a host of other things. It may also be wise to ask for the HA meeting minutes from the previous six months in order to find out about any problems or disputes in the development and to get a feel for the community you are considering living in.
Manufactured homes or mobile homes are another option available. But they appreciate even less than condos and come with their own list of disadvantages. Generally speaking, when you buy a manufactured home or a mobile home, you are buying the structure only. You must then buy a lot to put it on or rent space in a mobile home park. There are special considerations, as well, with service connections, such as water and sewage. This option requires a lot of research to determine whether or not it''s really any more advantageous than renting.
Equity sharing is a relatively new practice that''s akin to going into to business with a partner. There is generally a resident buyer and a non-resident "partner" who shares in both the expenses and the equity involved in the property. It is a complex arrangement that should be undertaken with the aid of an attorney. But it can be a very good alternative for those who can''t get into a house by themselves and have a relative or friend willing to invest in a home with them.
A lease with option to buy can also be a good opportunity for those who lack the funds for a down payment. A specified portion of the monthly payment usually goes toward a down payment for a specified period of time. At the end of the initial period, the renter has accumulated a certain amount of credit toward a down payment and has the option to buy. This, too, is a complex arrangement that should be well researched in advance.