To buy or not to buy, that is the question.
Although a native from Maine, Pamela Mukiza has been living in the Boston area for six years now, having gone to Babson College in Wellesley, Massachusetts, and is now working for a local commercial real estate development firm in the heart of Boston. When Pamela is not working on complex projects or looking into her next real estate investment, she is listening to music, obsessing over new skincare products, and planning on what to purchase next for the new condo she shares with her sister Monia. It must be in the blood because Monia also works in real estate, however she focuses on marketing, pricing, selling, and consulting on the buyer’s side of real estate- the two complement one another professionally.
Pamela and her sister just bought their first condo, a dream of the two since they first started saving up after college. There are many factors that contributed to Pamela purchasing her first place, one being the current record low interest rates for borrowing, which means that you are paying a lower interest percentage on your mortgage. Pamela also had enough money saved up for her to feel comfortable with taking the leap into ownership. Additionally, Pamela saw that there were new properties hitting the market in developing neighborhoods that she viewed as appreciating in value over time.
“If you think about renting,” Pamela starts, “you are throwing your money away by not building any equity. When you buy a place, you are still paying a monthly payment, but you are building your equity in paying off your home slowly over time”. Pamela views real estate as being one of the most stable investments, especially real estate in Boston, which is typically always appreciating in value because of limited supply.
Pamela and Monia’s new Chelsea apartment (below)
Trends in Boston Real Estate
Some current trends that Pamela indicated to me are increased concessions in buildings for starters. Boston is such an academic city, yet, because it is not receiving as many undergraduate, graduate, PHD, and MBA students, many buildings are struggling with a surplus of empty apartments. As a result, buildings have started to give concessions, such as the first three months rent free, on their apartments to incentivize renters to move in. Rents have also dropped significantly in order to attract renters in the area. “People who might have previously been on the fence in terms of buying or renting a place of their own are now jumping on board,” Pamela states.
Pamela and Monia, decided to purchase a condo in the Waterfront community in Chelsea, MA, which used to be a historically lower income neighborhood in Boston. Pamela notes that this was the first place that her and her sister saw that they could envision their lives in. Having to make an appointment for a time slot to view the condo due to COVID-19 restrictions, when Pamela and her sister left the place they immediately put in an offer. Pamela mentions that walking the neighborhood really sealed the deal in terms of convincing them to invest. They could see that a lot of investments were being made in terms of upgrading the T-station and new buildings going up that made buying the condo a good future investment, as the area becomes more appealing to others overtime. “You know a neighborhood is on the cusp of major developments when a grocery store chain begins its build or a new or upgraded T-stop is underway” Pamela notes. The easy 15 minute commute to work also didn’t hurt.
Pamela’s Advice for Future Investors
- Considering moving now? Do it! If you’re confident in your financial situation and have the money saved, go for it! It seems crazy and intimidating, but it’s not. There is a lot of paperwork, insurance papers, and lawyers involved, but it’s not as intimidating as you’d think.
- Look into federal programs offered in your city or states for first time home buyers. There may be some beneficial incentives that you can take advantage of.
- Evaluate your situation with public transportation or personal car usage in terms of your needs (i.e. street parking, private parking, etc.).
- Make a checklist in terms of what you are looking for (number of bedrooms, hardwood floors, etc.).
- Talk to the neighbors if you can. Pamela and Monia ended up running into their future upstairs neighbor and spoke with him during their condo walk through, making sure to ask him about the neighborhood and to get a sense for who lived in the building.
- Come at night and drive around the neighborhood so you can to see all aspects of your future surroundings.
- Check the demographics online to get a sense of who lives there and how far it is from local amenities, etc.
- Do some research on the condo board, read the condo documents, and make sure you understand all the legalities and fees associated with the purchase of your unit, who is managing it etc.
- If you are in one, read your lease before you renew it and take into account where you are going to be in the future.
*Condo (HOA) fees depend on how much it takes to take care of and maintain the building and all of the shared amenity spaces. The condo board is elected by the people of the board, takes care of the shared services such as snow removal, a common pipe bursting, etc. They also takes care of shared amenities, establish condo rules etc.