Buying a Condo?

[arod15]

Here is deal. I been searching for some real estate. I found a 2 bedroom 2 bath Condo. 23 minutes from NYC. The positvies it is close to NYC 10 minutes from the train 3 minutes from the center of town. Also the state has granted a huge amount of money to build 22 new schools and lowered the tax to business to build the area. My questing is. Is it worth buying a condo in a good area of an up and coming town. Keep in mind that Condos are very common investment in the NYC area

[geo8o2]

when is real estate ever a bad idea?

[midas]

Address please, are we talking Newark or Jersey city?

when its over priced.

[arod15]

Elizabeth. JC wouldnt have a brand new condo for much less than 300K.

[midas]

The question is - Why do think Elizabeth is up and coming? Don't you have the oil refineries in town or very close? Also, isn't Elizabeth in the takeoff/landing path of Newark airport? There is a reason why this area is so cheap so close to NYC.

[greg nice]

elizabeth is not that great of an area..

[squiffy]

If your premises are correct, then long-term it should be a good buy.

In the short term, you could see your prices drop as interest rates rise. But over 20 years, you will probably be way ahead having bought the condo.

Now if you buy a condo that was poorly built and has tremendous construction problems. All bets are off. Or if you are wrong that the neighborhood is up and coming, you could lose value.

But overall, in a crowded urban area where everyone wants to live and there is just no more land to build, over time prices will go up a lot. History bears this out. NYC, SFO, CHICAGO, LA, HONOLULU, TOKYO, HONG KONG. If it's a major city where people want to live, or have to live, land, over the long run, is a goldmine. Period.

Unless someone explodes a dirty nuclear device there, the land will probably be worth a lot more in 20 years. In NYC or nearby, land does not just keep pace with inflation, it generally will keep you way ahead of inflation.

But also remember that it's kind of like a forced savings plan and much of your wealth will be on paper and not necessarily easy to tap. So in the meantime, you will feel cash poor and may not have as much fun. But at least you will die richer.

A good plan would be to sell when you are ready to retire and when prices look like they have peaked, and then move someplace cheaper. Otherwise how do you cash out and benefit from the equity you have built.

And if you think you might die at age 50 of a heart attack, then you may not want to be saving so much for the future.

But if you plan to live to 75 or 80, then think long term.

[arod15]

[ QUOTE ]
The question is - Why do think Elizabeth is up and coming? Don't you have the oil refineries in town or very close? Also, isn't Elizabeth in the takeoff/landing path of Newark airport? There is a reason why this area is so cheap so close to NYC.

[/ QUOTE ]

Because of the money the state is putting into it. 22 new schools are going to be built in the next 5 years. Also, 3 sales tax as it has been declared an urban enterprise zone have brought in some new business, the biggest being IKEA and im sure more to come. 15 years back JC was the same as elizabeth. With urban enterprise tax breaks and new constructions JC rentals have gotton comarable to those of Hoboken. Finnanly another poster said there is a reason why Elizabeth is priced so cheap, i agree which is why i think it is undervalued. 24 minutes from NYC with just a little work this has huge upside.

[midas]

I think for long term appreciation Elizabeth is just too industrial. Those are incentives to save a dying town like Camden, NJ and they don't always work. I would look at some of the tougher neighborhoods in JC (maybe around Journal Square) that will see upward pressure. Also, I would look at the established working class communities like Weehawken, Secaucus and Lyndhurst before I invested in Elizabeth.