# Something just came up, should I buy a condo?



## emperor (Jul 24, 2011)

My cousin just called me, he is getting a 1000 a month living allowance from his company. We are thinking of renting a place for around 1,600 -1,800 a month. But then I got to thinking I can buy a 2 bedroom condo for around 220-270 K then take the 1000 which would cover almost all the bills. I have around 160K down which means 60-100K mortgage over 5 years. I usually make around 60-100K a year.

I have no risk with my job but there might be a risk with his. He works in construction so if the company fails then there is no 1000 a month and I'd have to find another roommate for allot cheaper, around 500-600. 

I also believe there will be a housing correction, so lets factor that in. I've never gotten a place before so any help from people in real estate would be good. The area of town he needs to live in has no "Deals" it's all new condos built in the last 15 years so you can't get a cheap run down place. =(


----------



## wendi1 (Oct 2, 2013)

My hubby brings home these kind of "investments" all the time - it drives me batty because it always involves accepting risk from someone else, without an according increase in return. 

So you would own the condo, and your cousin would be your roommate? And if he loses his job, the risk would be yours? And he gets to decide where the condo is located? And if the costs go up (special assessment), that is yours as well? And if the price goes down, you would eat that? And if you two don't get along, he leaves, and you have to find a new roommate?

One more question: if your cousin were not involved, would this still be on your radar?


----------



## heyjude (May 16, 2009)

I have a better idea. Your cousin should buy the condo and you should be his roommate.


----------



## Taraz (Nov 24, 2013)

Why doesn't he just rent a room somewhere else? Can't you get a house share for way less than 1000k/month there? Here (Edmonton) it's only about $650/month.


----------



## emperor (Jul 24, 2011)

Thanks for the replies.

I never mentioned buying a place to him. Right now we are going to rent a place for 1600-1800. So he will use his 1000 and I'll spend 600-800

He won't buy a place because he lives in another town and owns a house there with his wife. He goes home every weekend.

I rented with him before for 4 years. There was no problems.

If he was not in the picture I would not do it, usually you will only get 600-800 a month from a room mate so I'll be getting almost 2.2-4.8 k more a year than average.

I have been looking at condos in this area before I just think everything is overpriced so I never bought, but if I can make 12k a year off renting a room it might be more affordable. Even if he only stays 2-3 years that's still 24-36 k


----------



## Just a Guy (Mar 27, 2012)

$12,000 of taxable income remember. Oh, and if you write off part of the house to negate the income, you'll have to pay capital gains on a portion of your principal residence when you sell.


----------



## emperor (Jul 24, 2011)

Thanks for the replies, just wanted to make sure I wasn't passing up a good opportunity.


----------



## marina628 (Dec 14, 2010)

Ask yourself how you will feel if you buy the place and in a year your cousin cannot work and you are on your own.If you would still buy then buy if not then go ahead and rent a place.I almost bought a condo in Fort Mcmurray with my brother as he was paying $1200 a month to rent a room from our cousin ,seemed like a good idea really.That was in 2011 and in Feb 2012 my brother had terminal cancer and he died October 2013.


----------



## Cal (Jun 17, 2009)

You almost did.

Renting a $1600-1800 place, where you only pay $600-800, and your roommate is gone on weekends leaving the place all yours. That is the best roomy in the world.

After a year, your rent goes month to month, if his work changes/moves/ends and you want to leave, just give notice.


----------



## peterk (May 16, 2010)

I don't get it, why would your cousin pay more than his half because he's getting a living allowance? Or is it a use it or lose it situation? (unlikely)


----------



## emperor (Jul 24, 2011)

That's to bad Marina, sorry for your loss.

Peterk I have no idea, he asked my budget and I said 800, he told me he can make up the difference. He's an honest guy so probably won't pocket money that's given for a living out allowance.


----------



## banjopete (Feb 4, 2014)

peterk said:


> I don't get it, why would your cousin pay more than his half because he's getting a living allowance? Or is it a use it or lose it situation? (unlikely)


My guess is the living allowance is just that, a cost covering option of his employer's that evaporates if not used essentially. One of those "the corporation will cover living expenses up to $1000..." kind of things. I guess emperor's roommate is ok with claiming the full amount as he could fight for the 50% split but the only people saving money in that situation is the corporation. This is my thinking as I've been in a similar situation before.


----------

