Can you dream of living in a luxurious condo when your income is $100,000? Maybe you can.
While luxury living often comes with a hefty price tag, there are locations with condos that could be within your reach. There are some serious considerations when you want to buy a luxury condo. In addition, you have to think about the location as well. While everything may sound challenging, it is not impossible.
To make everything easier, Gharpedia in this blog unveils exclusive luxury condo hotspots that meet your budget. We will also discuss the nitty-gritty associated with buying a condo.
How Pricey Condominium Can You Afford If You Earn $100K?
Several factors come into play when you try to determine affordable luxury condos for $100K income earners. Mainly, your salary is a starting point to evaluate your affordability. The question is, why? That is because lenders mostly consider your gross monthly income to determine the amount they are willing to lend. The vice president of PNC Bank, Wil Hendrix-Griffin says, “Before banks or other mortgage lenders extend a loan to you, they’ll look at the overall picture of your financial life.”
28/36 Rule
To determine how much of your income should be set aside for housing expenses, experts advise using the 28% rule (aka the 28/36 rule). This is a widely used guideline in the mortgage industry. According to this rule, your total monthly housing costs should not exceed 28% of your gross monthly income.
For example, if you have a $100,000 annual salary, your gross monthly income would be approximately $8,333. Applying the 28% rule, you would multiply your gross monthly income by 0.28 to find the maximum recommended housing expense:
$8,333 * 0.28 = $2,333 (rounded to the nearest dollar)
In this scenario, the guideline suggests that your monthly housing costs, including mortgage interest, property taxes, insurance, and any homeowners association fees, should ideally be around $2,333 or less.
Credit Score
An important factor in the mortgage approval process is your credit score. Lenders use credit scores to assess your creditworthiness and determine the interest rate they offer you. A minimum credit score of 680 or higher is necessary for conventional loans. FHA, VA, or USDA are common conventional loans that require no down payment.
Unless you are eligible for conventional loans, the majority of lenders require a down payment at closing. This payment can be 5-20%, depending on the type of loan. Additionally, you will be responsible for paying closing costs. Typically, it accounts for 3-6% of the total loan amount.
As a general guideline, lenders may allow your monthly housing costs to be around 25% to 30% of your gross monthly income. These include mortgages, property taxes, insurance, and homeowners association fees. Lenders expect a minimum of a 20% down payment to ensure an 80/20 Loan-to-Value (LTV) ratio.
So, on a $400,000 home, you would need to contribute $80,000 to your down payment. The following table shows different amounts of down payments that will impact your monthly costs on a $450,000 home:
| Down Payment | Monthly Payment |
| $13,500 (3%) | $2,617 |
| $45,000 (10%) | $2,428 |
| $90,000 (20%) | $2,158 |
Moreover, lenders use a Debt-To-Income (DTI) ratio to assess your financial situation. Actually, this is the digit representing 36 in the 28/36 rule. Ideally, your total monthly debt obligations should not exceed 36% to 43% of your gross monthly income.
The local housing market plays a major role in determining what you can afford. Prices and demand can vary significantly between regions and cities. If you earn $100k and want to stick with the 28% rule, you should look for condos priced from $350,000 to $500,000.
5 Luxury Condo Hotspots For $100K Earners
Following is the list of high-end condos within reach for $100k income earners in the five hotspots.
01. New York
Although New York City is generally known for its high cost of living, it can still offer condos for $100K earners. First, individuals with a $100,000 income should explore more affordable areas in New York. Then they should consider condos within their budget.
The median price of a condo in New York can vary depending on the location. For example, in Manhattan, the median price for condos can range from around $1 million to several million dollars. Moreover, 20% of the purchase price is considered the down payment on condos. So, if you want to buy a condo for $500,000, the minimum down payment would be around $100,000.
Despite the initial affordability challenges, New York City’s real estate market has shown strong appreciation over time. So, purchasing a condo in this city can be a potential long-term investment.
One Manhattan Square and 432 Park Avenue are two of the most iconic condominiums in New York. However, these condos may exceed your allocated budget if you earn $100K a year. Also, condos with a lower price tag can still come with top-notch amenities.
02. Daytona Beach
This can be a popular location for luxury condos with affordable price tags searching for oceanfront condos. Generally, Daytona Beach offers a lower cost of living compared to larger cities. Plus, residents can access beautiful beaches for its prime location along Florida’s coastline.
Aruba, Ocean Vistas, and Palma Bella are some popular condos in Daytona Beach. The median prices for these condos can range from around $150,000 to $300,000. However, it depends largely on the location, size, and amenities.
For instance, the average listing price for an Aruba condo is around $717K. However, according to real estate insights, the lowest price for a condo is 600K. Generally, down payments can range from around 10% to 20% of the purchase price. Therefore, a minimum down payment of $120,000 may be required upfront for a $600K condo. Including the 3% closing cost, here is an overall insight, according to an online down payment calculator:
03. San Diego
There are a variety of neighborhoods in San Diego, each with its own charm and condo options. As a result, 100K earners can find condos that fit their budget and preferences. The area combines a desirable climate with a stunning coastline.
In addition, it is home to various industries. With a robust job market, living in San Diego can be advantageous for 100K earners. Here, there is a wide selection of condominiums, such as The Grande at Santa Fe Place and The Pinnacle Museum Tower.
In premium areas like downtown San Diego or coastal neighborhoods, the median price for condos can range from approximately $500,000 to over $1 million. The downpayment rule is the same as elsewhere, which is around 10% to 20% of the buying price. Hence, the down payment will probably range from $60,000 to $120,000 for a $600,000 condo in San Diego.
04. Memphis
Compared to many other American cities, Memphis has a lower cost of living. This makes it an attractive option for 100K earners to buy a suitable condo. This city can offer its residents a vibrant cultural experience with its music, history, and cuisine.
On top of that, it is continuously growing and developing. Therefore, purchasing an affordable condo can pave the way for future value appreciation. In Memphis, 100K earners can easily find a good condo at Artesian Condominiums, Front Row Lofts, Claridge House Condominiums, or South Bluffs. These condos offer amenities that are convenient for an urban lifestyle.
Condos in Memphis are more affordable than in other major cities. You expect to buy a decent condo for around $100,000 to $300,000. Additionally, the down payment is more flexible. It normally ranges between 5% and 20% of the cost of the condo. So, for a $150,000 condo, the minimal down payment would range from $7,500 to $30,000.
05. San Francisco
This is a vibrant city with cultural attractions. Although the cost of living is high, there are condos for 100K earners. Despite the high initial cost, San Francisco’s real estate market is very strong. So, having a condo in this city might be a good long-term investment.
It is common for condos in San Francisco to exceed several million dollars. Luckily, in 2023, the median price has dropped by 7.4% from the previous year. Currently, a condo in a desirable area of San Francisco will cost from $1,110,000 to $1,125,000. Speaking of desirable areas, you can look for a condo at The Avery, The Pacific, or Lumina.
However, the down payment is much higher here. You might have to pay from 20% to 25% of the condo price as a down payment. Consequently, the down payment would be something between $200,000 and $250,000 for a million-dollar condo. This may seem like a lot for 100K earners, but it is still manageable.
Conclusion
By exploring these luxury condo hotspots, $100K income earners can unlock the door to elegance without breaking the bank. You don’t need a six-figure salary to indulge in the luxury condo lifestyle. It is time to enhance your living experience while staying true to your budget.
