Are condos THAT bad of a value?

[mshan]

Regarding the condo, looks like it has a slab foundation and some of the living space is on that first floor.

It is going to be hard on the feet and very cold in winter, even with hardwood floors or carpet. Having garage on first floor, then having always to walk up to second floor main living space is inconvenient, but the wood sub-floor should be warmer in winter and have more give under your feet all year round.




edit: floorplan 3 with the garage on laundry room on ground floor should be ok, but presumably is more expensive.

 

[MichaelD]

It will be under my name only. That wasn't the point of the post, but I'll explain the whole situation when I get home from work.

You don't have to if you don't want to. Your reply tells me everything I need to know. Just looking out for, bro. That story I told you above, where it was HER apt but I bought everything? SHE had lousy credit and lived paycheck to paycheck. I had good credit and i was in loooooooove. More like "in lust" but hey, I'm a guy. I've got two heads and only enough blood to run one at a time. Stuff went south after a year and I moved out thinking I'd get at least half the stuff. Ah "how about NO?" She could've at least thrown one fork at me and yelled "Fork you!" but noooooooo.

 

[ultimatebob]

Forgot to mention that - for the condo we like, we're looking at $144/mo for the association fees...which I think is pretty reasonable. Not sure what the norm is around here yet.

The other issue that I forgot to mention is that since this is a new development, that would obviously cap the value of our property for a year or two until they finish developing this complex. We do plan on being there longer than that, though.

It's only $144/mo NOW... wait until the siding, roof, or driveways need to be replaced. Then they'll start tacking on the "special" assessments that will drive your condo fees up to $300 a month.

Oh, and don't forget about nosy neighbors who will turn you into the condo association because your drapes are the wrong color. Bastards.

 

[Capt Caveman]

Hell no on duplex, coops and condos etc.. Not sharing walls with neighbors is one of the biggest reasons to buy your home in the first place. That entire 4 unit building will be sharing the same vibrations and other utility noises due to its partitioned box design.

Not necessarily, it depends on how it was built. I used to live in end-unit townhouse. The units were built with individual exterior walls, meaning the unit I shared a side with actually had two walls between us(his wall and mine). I could run my second floor washing machine against my side of the wall at night and he never heard or felt it.

I wish I hadn't sold the unit, it would have made a great rental unit.

Being new construction, I'm assuming that the city the OP is looking to buy this unit has laws requiring separation walls(fire and sound proofed).

 

[Triumph]

Not reading the thread yet, but no, not all condos are a bad value. My brother-in-law's parents moved into a condo community in Greensboro. Very nice place, the condos are really 1 story townhouses (with a basement) made of brick, very large and well appointed actually, everything is very well kept, community pool, etc. etc. I want to say they paid something in the 200's for the place. Their association fee covers all exterior maintenance of the building - roof, structure, grounds, and is only $200 per month. Around my area, that kind of support starts at 300 and only goes up from there. Now this is a retired couple, so for them it is a perfect setup, as are most condos I would think - when you get to that age you don't want to deal with all of the doldrums associated with homeownership. More time spent on enjoying grandkids.

 

[rcpratt]

Novi! You are closer to me than I thought. Be sure to let me know which one you get so I can vandali....visit

When my place gets egged, I know who I'm coming after...

 

[rcpratt]

Unless those old homes are on land that is irreplaceable (all land developed and no more undeveloped land remains that is quick and easy commute to area where all the jobs are) and prime location in your community (convenient to shopping, restaurants, amenities of community), plus great school district, I would feel uncomfortable that they are potentially endless money pits.

Another thing that I forgot to mention. The condo is less than a mile away from the second nicest mall in the metro area, less than a mile away from major freeways, and the school district is one of the best in the area. For whatever that's worth.

To get decent houses, we'd be looking at 5+ miles away from major freeways and much worse school districts, so that is a major factor for me.

 

[rcpratt]

Hell no on duplex, coops and condos etc.. Not sharing walls with neighbors is one of the biggest reasons to buy your home in the first place. That entire 4 unit building will be sharing the same vibrations and other utility noises due to its partitioned box design.

I've lived in an apartment for the last 6 years of my life, and I've only ever had issues hearing the people above me - and even then, it wasn't bad. I will have to ask them what the situation is with the walls. There is an end unit available, although I like the location of the lot a bit less than others where we could get an interior unit. $3000 more for the end.

Personally I don't see the point of buying a condo. I can understand the desire for condo living, but if you want to live in one I say you just rent one. Its basically the same thing only you can move at the drop of a hat for any reason and if the water heater breaks you don't have to pay for it. I might feel differently if all condos and townhouses didn't seem to be built with a sheet of cardboard as the separating wall.

I also don't believe in starter houses. While its true that you'll often end up moving because you didn't know what you wanted or needs changed...the idea that you can buy a house and then use the 'proceeds' later on to buy your dream house sounds dubious to me in this market.

The point is like $500 less per month. It is not cheap, at all, to rent around here. Since housing has been hit so hard in the Detroit area, owning is much cheaper than renting.

It's not a starter house in the sense that we are relying on it to springboard into a nicer place, but rather in the sense that we'll be paying for it with just my income while she pays off her student loans.

It's only $144/mo NOW... wait until the siding, roof, or driveways need to be replaced. Then they're start tacking on the "special" assessments that will drive your condo fees up to $300 a month.

Oh, and don't forget about nosy neighbors who will turn you into the condo association because your drapes are the wrong color. Bastards.

I'll have to see if we can negotiate a limit on the fee increases, if that's even possible. The good news is that the entire development is less than 18 months old, so hopefully we're looking at least a few years into the future for the major upgrades.

Regarding the condo, looks like it has a slab foundation and some of the living space is on that first floor.

It is going to be hard on the feet and very cold in winter, even with hardwood floors or carpet. Having garage on first floor, then having always to walk up to second floor main living space is inconvenient, but the wood sub-floor should be warmer in winter and have more give under your feet all year round.

edit: floorplan 3 with the garage on laundry room on ground floor should be ok, but presumably is more expensive.

I do believe it has some kind of slab foundation, but all that is on the ground floor is the garage and a closet for washer/dryer. Upper floor #3 (which we prefer) has a $1200 surcharge, but the garage level is standard on all units. Definitely wouldn't be spending any time down there aside from doing laundry and walking up from the garage (which doesn't particularly bother me at all, tbh).

You don't have to if you don't want to. Your reply tells me everything I need to know. Just looking out for, bro. That story I told you above, where it was HER apt but I bought everything? SHE had lousy credit and lived paycheck to paycheck. I had good credit and i was in loooooooove. More like "in lust" but hey, I'm a guy. I've got two heads and only enough blood to run one at a time. Stuff went south after a year and I moved out thinking I'd get at least half the stuff. Ah "how about NO?" She could've at least thrown one fork at me and yelled "Fork you!" but noooooooo.

See above. I make enough to afford the condo (or house, whatever) on my own, so the plan would be for me to put it in my name and make all payments. GF is a teacher and has quite a bit of student loans, so I'd like to have her use almost all of her paycheck to pay those down aggressively. The rest of the costs we pretty much split. Maybe it sounds like I'm letter her freeload, but I'm already paying this much for my apartment anyways, and if the worst-case scenario happens, I have a condo that I have some equity in and she has student loans that are significantly paid down. Seems like a win-win. And she'll have a ring within 6-9 months

 

[Tommy2000GT]

Condo is cheaper than owning a house because the dues cover new roofs, paint, and landscaping. Paying all of that yourself costs a lot more

 

[OlafSicky]

Condo is cheaper than owning a house because the dues cover new roofs, paint, and landscaping. Paying all of that yourself costs a lot more

Wrong in 5 year he will pay arund $12 000 or more in fees. There is no way he will have to spend that much on a roof etc. in the next 5 years. The price of a new roof for that complex is probably 8 -9 k

 

[mshan]

I would guess that special assessments PingSpike is referring to would come into play around 20 years or so after complex was built (unless some unexpected major catastrophe happened to your community).

If your community does not have a lot of special amenities like pool, doesn't include mandatory tv cable phone, and community is going to be in range of 200 units or so, based upon my own complex and 1980s complex my sister used to live in, $200 / month or less sounds reasonable for unsubsidized HOA.

Regarding property taxes, you have to dig around how well your local government is financed, whether they have base of businesses paying lots of taxes, etc. But whatever peak taxes for area are, I would assume that is the lowest it will ever get and that, at best, it will increase slowly over time from there.

 

[Imp]

I've been doing some half-assed house shopping, but since my country's in a bubble right now, I've put it off indefinitely.

From my research and impressions about condos:
- Only buy if you're desperate to own something and just want a place that's "yours", which provides whatever conveniences you would like (e.g. close to fun parts of city or family or work).

- Don't expect to make much/any money, especially if you can't afford a huge downpayment to minimize the mortgage. You will pay maintenance fees (guaranteed to only go up through condo board incompetence and building durability issues). You will also need to pay heating/cooling, electricity, property taxes, mortgage, parking (?), etc. all at the same time. Remember that your building has elevators, huge amounts of glazing, curtain walls, and other things that could go wrong, which you will be volun-told to pay for.

- If one of your 50+ neighbours is stupid and burns down the building, or burns enough of it that your unit is affected, you will have to pitch a tent on your "land" jammed in with 10+ floors of people... Or learn to fly.

I've watched condos in my city balloon up to stupid prices: 2 bedrooms go for the same price as a semi-detached or row house (roughly same area) in the $400k to $500k range. They also carry $500+ monthly maintenance fees. Lot of units just sit on the listings for months, sometimes they disappear and reappear months later for a similar price.

Resale is also risky. The condo boom in my city has created half-a-dozen 20+ storey towers within the same block in some areas. I laugh watching the retail listings show 60+ 1-bed or 2-bed units for sale within a block of each other. No, they don't sell for months, if at all. The bigger the building, the more competition you have, and I've rarely seen towers go up alone in an area, so you're competing with neighbouring towers too.

Unless you're in New York, or some other super dense city with virtually no land left for development, the condo is essentially the new "starter home" or the "not quite a house". And over time, I have trouble believing that people are going to say that your cookie-cutter concrete construction condo churned out by a huge developer has heritage/historic appeal.

 

[sjwaste]

Condos are potentially good investments where the cost of land is high - ie, in/bordering a major city. A condo where land is cheap is going to be hard to unload, so if you're set on buying one, be ready for that and try to buy it very cheap. Most are listed/priced well above what they're actually worth.

I lived on the orange line corridor in Arlington, VA and still thought condos were a poor purchase. Five minutes of research into that real estate market ($/acre very expensive, almost recession-proof) ought to tell you what I think of condos.

 

[Sheep]

Wrong in 5 year he will pay arund $12 000 or more in fees. There is no way he will have to spend that much on a roof etc. in the next 5 years. The price of a new roof for that complex is probably 8 -9 k

I'm glad to see you're psychic and know so much about the condo the OP is talking about moving into. Looks like you even know more than he does or what the board does about what will happen in the future.

If you have a board worth a damn, they will have budgeted for big, upcoming repairs that they know have to be done. Obviously not all boards are this efficient and some are downright awful so you do have to keep an eye out for that when considering a place.

 

[SlowSpyder]

Take the condo association fee and use it to hire a landscaper at your house. You can have the best of both worlds.

 

[BurnItDwn]

based upon your description of what you're looking for, the townhouse that you like doesn't look to bad. I think you would spend less money in a house thanks to no assessment dues, however, that's only if you're willing to do your own yardwork.

 

[mshan]

Assuming that you could resell the property in 5 years (how good is your local economy now and probably in 5 years?) when you are ready to move up to a completely detached single family home, if you lost $20,000 ($333/month spread out over 5 years) between decreased sale price and 6% or so transaction costs with buying and selling, is your and your girlfriend's enjoyment of that condo vs. what you get for comparable rent worth it to you?

We all don't think the same way when we buy a brand new shiny car and see it arguably lose 50% of it's value when we drive it off lot, continue to decrease in price, and have ongoing maintenance costs over the years. Plus, the builder's in house lender might still be offering 3 - 5 % downpayment, and very reasonable total monthly payment even when you factor in mortgage insurance, etc. into the rate they can offer you (?) e. g. http://askcarolynwarren.com/page11/page11.html

If you knew for sure you were buying a completely detached, single family home that you were going to live in for the rest of your life, then mortgage rates and home affordability may be at historic lows, but those sound like big "ifs" at this point in your life.

As a luxury expense you get to live in, the new condo you linked in OP might not be that bad a choice as long as your local economy is not in terminal secular decline.

 

[notposting]

Question about the girlfriend...so, any chance of you two marrying? Kids? If so, that condo will become very restrictive very quickly, and could be hard to dump around here obviously. How far away from Novi are you guys willing to go? Check out some of the neighborhoods, lookout for HOA's (just to be aware of) etc. We are in a townhouse apartment in Plymouth/Northville and the neighborhoods here are kind of creepily perfect suburbia, the 2 we go for walks and bike rides in are HOA's. But a nice yard for a kid would be nice, backyard patio/deck sort of thing, etc etc.

I guess I'm in the category of having never understood basically buying a glorified apartment...I would keep looking for a house, at least right now you know you should be able to find something around here.

edit: anyone asking how the local economy is should know that this is the Detroit area aka ground zero of the recession and still sputtering.

 

[Baked]

For condos, I think your best bet is to get the corner unit so you don't get gangbang from noises on both ends.

 

[the DRIZZLE]

It's much safer to focus on the rental income that you could get rather then the selling price five years down the road because rents are historically far more predictable then real estate prices. If the rental income can cover the mortgage, HOA fee, taxes, and maintenance costs you can just sit on the property until selling becomes attractive

 

[rgwalt]

Personally I don't see the point of buying a condo. I can understand the desire for condo living, but if you want to live in one I say you just rent one. Its basically the same thing only you can move at the drop of a hat for any reason and if the water heater breaks you don't have to pay for it. I might feel differently if all condos and townhouses didn't seem to be built with a sheet of cardboard as the separating wall.

I also don't believe in starter houses. While its true that you'll often end up moving because you didn't know what you wanted or needs changed...the idea that you can buy a house and then use the 'proceeds' later on to buy your dream house sounds dubious to me in this market.

I tend to agree. When I was looking for a house, there were a lot of shared wall town homes in my area. Basically these are condos, except you don't have anyone living above or below you, just on either side. I decided that if I was going to share walls with someone, I might as well rent. So I bought a free standing town home instead with no yard and no HOA. Then again, I don't live in the burbs.

If I did live in the burbs, I would definitely either rent an apartment/condo or buy a freestanding house in an area with low to no HOA fees, then pay to have the yard taken care of. This being said, I understand the OP's point of view. The biggest thing I miss about apartment living is not having to worry about taking care of the structure, appliances, etc. So far nothing has broken that I couldn't fix myself, but eventually I will have to deal with something more major and hire it out. Keep in mind though, that this is "the biggest thing I miss about apartment life". People recommend that you buy as soon as possible to start building "equity", but buying a house to accomplish the goal of not "throwing money away on rent" is a bad decision. You have to be in a position in life where it makes sense to buy. Are you going to move in the next 5+ years? Is your job stable? Do you have a decent savings that won't be wiped out by purchasing a house? Even if these answers are "yes", the convenience of condo living can still be accomplished by renting a nicer apartment, or renting a condo.

 

[Capt Caveman]

I tend to agree. When I was looking for a house, there were a lot of shared wall town homes in my area. Basically these are condos, except you don't have anyone living above or below you, just on either side. I decided that if I was going to share walls with someone, I might as well rent. So I bought a free standing town home instead with no yard and no HOA. Then again, I don't live in the burbs.

If I did live in the burbs, I would definitely either rent an apartment/condo or buy a freestanding house in an area with low to no HOA fees, then pay to have the yard taken care of. This being said, I understand the OP's point of view. The biggest thing I miss about apartment living is not having to worry about taking care of the structure, appliances, etc. So far nothing has broken that I couldn't fix myself, but eventually I will have to deal with something more major and hire it out. Keep in mind though, that this is "the biggest thing I miss about apartment life". People recommend that you buy as soon as possible to start building "equity", but buying a house to accomplish the goal of not "throwing money away on rent" is a bad decision. You have to be in a position in life where it makes sense to buy. Are you going to move in the next 5+ years? Is your job stable? Do you have a decent savings that won't be wiped out by purchasing a house? Even if these answers are "yes", the convenience of condo living can still be accomplished by renting a nicer apartment, or renting a condo.

Buy a condo in the proper location, instant rental if you decide to move/relocate. And if you decide to move back, you have a place to live. The people that are building wealth are not the renters but the landlords.

I almost relocated and if I did, I would have rented my place for $1k more than I'm paying in a mortgage/real estate taxes.

 

[rgwalt]

It's much safer to focus on the rental income that you could get rather then the selling price five years down the road because rents are historically far more predictable then real estate prices. If the rental income can cover the mortgage, HOA fee, taxes, and maintenance costs you can just sit on the property until selling becomes attractive

Don't forget to consider that you will likely have to pay someone to manage the rental property for you (collect rent, deal with maintenance issues, etc.) They may take a non-trivial percentage of the rent.

 

[rgwalt]

I've lived in an apartment for the last 6 years of my life, and I've only ever had issues hearing the people above me - and even then, it wasn't bad. I will have to ask them what the situation is with the walls. There is an end unit available, although I like the location of the lot a bit less than others where we could get an interior unit. $3000 more for the end.


The point is like $500 less per month. It is not cheap, at all, to rent around here. Since housing has been hit so hard in the Detroit area, owning is much cheaper than renting.

It's not a starter house in the sense that we are relying on it to springboard into a nicer place, but rather in the sense that we'll be paying for it with just my income while she pays off her student loans.


I'll have to see if we can negotiate a limit on the fee increases, if that's even possible. The good news is that the entire development is less than 18 months old, so hopefully we're looking at least a few years into the future for the major upgrades.


I do believe it has some kind of slab foundation, but all that is on the ground floor is the garage and a closet for washer/dryer. Upper floor #3 (which we prefer) has a $1200 surcharge, but the garage level is standard on all units. Definitely wouldn't be spending any time down there aside from doing laundry and walking up from the garage (which doesn't particularly bother me at all, tbh).


See above. I make enough to afford the condo (or house, whatever) on my own, so the plan would be for me to put it in my name and make all payments. GF is a teacher and has quite a bit of student loans, so I'd like to have her use almost all of her paycheck to pay those down aggressively. The rest of the costs we pretty much split. Maybe it sounds like I'm letter her freeload, but I'm already paying this much for my apartment anyways, and if the worst-case scenario happens, I have a condo that I have some equity in and she has student loans that are significantly paid down. Seems like a win-win. And she'll have a ring within 6-9 months

One more thing OP... Having laundry on the 1st floor and living on the 2nd or 3rd is a pain in the ass. That was the other criteria for homes when I was looking. Laundry had to be on the same floor as the master BR.

 

[postmortemIA]

Read HOA rules before you do anything. Especially for things that they limit you to do. For example, they can have rule that only small % of units can be rentals.
Also see if HOA has problems collecting fees, govt won't give you loan if:
* over 50% of units are rental
* too many units are delinquent on HOA fees