Quick history: We are currently living off of my husband's salary and using mine to pay off our student loans in the next 4-5 years. We decided to keep renting instead of buying because we aren't ready to commit to such a large purchase for longer than 5 years. While looking for a new place to rent, we found a spacious 1 bedroom condo for $650/month, including a boat slip, so we no longer have to pay our $1,000/month rent and $100/month boat slip. Awesome right? Well, we also found out that there are condos selling in that community for $20,000-$40,000! My mother in law offered to loan us the money and we can pay her back in the next 5 years at about $700/month for a $42,000 condo (top price range). Here's the problem: the HOA fees are $300-400/month, then we estimate at least another $150 for property tax and homeowner's insurance.
Question: Do we buy one of these condos? In 2004, they were selling for about $100,000 but now they're valued around $40,000-ish with some selling for as low as $20,000. We'd have it paid off in 5 years BUT we'd still have the HOA fees, etc. If we can't sell it when we want to, we may be able to rent it. (The condos for sale are 2 bedrooms, not 1 bedroom like the one we looked at renting) We could probably rent it for about $800/month, but we'd only profit like $300 after fees.
The alternative is to rent the other condo for $650/month, saving us at least $400-600 from what we're currently paying in rent, utilities, boat slip. That extra could go towards paying off our student loans faster.