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Old 05-23-2010, 07:14 PM   #41
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Hmmm, I guess it would never occur to me to be that security conscious. Is this consequence of being single, in a large city, both, something else?

We live in the kind of neighborhood where you can see people's heads turn as a strange car rolls by and when one of the neighbors began having a late night gentleman caller the curtain twitchers were sure to alert one and all about the "night rider's" visits. I generally think I am pretty unlikely to have to worry about crime, especially with cops, firefighters and the mayor's relations in the cul-de-sac. But perhaps I am naive...
Wisteria Lane?
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Old 05-23-2010, 07:32 PM   #42
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The way Ha talks about crime I wonder what country he lives in. Then I realize there are areas that are very different from others.

OVERALL (320 METROPOLITAN AREAS):
Safest 25:
Most Dangerous 25:



1.Appleton, WI
2.Fond du Lac, WI
3.Bismarck, ND
4.State College, PA
5.Oshkosh-Neenah, WI


This is a list of the safest areas in the US. 3 of the top 5 safest areas are within ~20 miles of where i've lived my whole life. Crime like others here face(Ha,W2R, ect.) is unimaginable to me so it's not much of a consideration when chosing a home. In some areas that may be THE consideration most important in choosing a home.
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Old 05-23-2010, 07:55 PM   #43
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Wisteria Lane?
Ah, think we are a bit too lowbrow for that. Lots of working class families along with principals, actuaries and the stray investment banker. But everyone watches out for each other, more or less, and kids playing in the street/sidewalk are a common sight.
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Old 05-23-2010, 08:40 PM   #44
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If the complex is less than 5 years old be VERY careful. Building construction has been extremely sketchy across the country. Do some research, google "HOA suits against builders," and you will find some interesting stories.

I just sold my townhome which was six years old. The construction turned out to be very faulty, the builder set the HOA fees low to attract buyers, the new owners were reluctant to raise fees to fix things, bigger stuff went wrong, fees went up, fights at HOA meetings, finally new board members were urged by the new manager to sue the builder.

The lawyers were pessimistic that I would be able to sell but I was really lucky to find a buyer who thought she was getting a great deal and wasn't scared off by the suit. I have felt guilty selling it to her because I am convinced that there will be assessments even if the HOA wins the suit. The lawyers are excellent but they will take their cut of the settlement and most suits are settled by arbitration. So, anyway. It was and is a big complicated mess.

My story is not an isolated case. The more I looked into it the more frightened I became: that's why I decided to sell, luckily, not at a loss. And I have not bought a replacement. I am renting until I feel comfortable that this economy is not going to take another downturn.

You should never buy a condo or townhome in a community that does not have a reserve study. You should also read the HOA meeting minutes and talk to the board members and the HOA manager. Even with that research, you will not find out everything, for example, that your neighbor is a whackjob.

If the building is new and hasn't sold out, you may be at risk that the builder will lower prices, leaving your mortgage underwater. This has happened in my town with a large new complex of expensive condos that have not sold out. The builder lowered the price of the most expensive ones by $100K and the least expensive by $25K. There goes your equity!

Be careful. Do your research. You are receiving excellent advice from everyone on this forum.
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Old 05-23-2010, 08:58 PM   #45
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This is odd and counterintuitive. A highrise may have 100-200 units under one roof. It may have one HVAC system. The water pipes, electrical etc are more efficient. There is a small amount of landscaping spread over many units, rather than large amount over one. And all these services are bought by a big customer with market power. And if it is a well run building, some of those dues are going to replace all these expensive things, repaint, re-roof, etc., etc.

Homeowners usually just don't reserve for stuff like maintenance adn replacement, or they do a lot of work themsleves. But if you know a lot of old people, like at a church, you likely know one or more old men who have fallen off a roof or a ladder to their everlasting detriment.

How much would your own quality security system cost? Or a security staff? It really can't be done. One of my kids lives in a neighborhood of $1mln+ homes and his neighbors have frequent breakins or car prowls. He hasn't experienced this yet, but he is concerned.



Ha
The neighborhood in St. Paul I am looking at for single family homes does not have high crimes and locks on doors and windows is what is typical and what is enough. I understand about putting money aside for capital improvements, I was used to that with our old fourplex. But I am seeing one bedroom condos downtown St. Paul and along the river in Minneapolis with monthly fees of $500 or $600. That seems way out of line, even when heating is included.
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Old 05-23-2010, 09:11 PM   #46
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But I am seeing one bedroom condos downtown St. Paul and along the river in Minneapolis with monthly fees of $500 or $600. That seems way out of line, even when heating is included.
High fees are a sign that the HOA was not well managed and the reserve was too low for normal upkeep. Then they had to either raise fees or make assessments or both. Or worse, major repairs cropped up unexpectedly and the reserve, though adequate for normal maintenance, was not enough for major repairs.
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Old 05-23-2010, 11:24 PM   #47
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I've lived in apartments, townhouses, duplexes and single family houses. As long as I can remain in a single family house, that is where I'll stay.

I simply can not tolerate people on the other side of my wall. The noises can be irritating, but what I found more offensive were the odors. I love garlic...the taste and the smell, but when it comes from my neighbor, it almost makes me sick.

I would definitely try before I'd buy.
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Old 05-24-2010, 12:59 AM   #48
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The neighborhood in St. Paul I am looking at for single family homes does not have high crimes and locks on doors and windows is what is typical and what is enough. I understand about putting money aside for capital improvements, I was used to that with our old fourplex. But I am seeing one bedroom condos downtown St. Paul and along the river in Minneapolis with monthly fees of $500 or $600. That seems way out of line, even when heating is included.
That is very high I think. Here, a $500 fee gets you something like Central Park East.

Ha
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Old 05-24-2010, 01:06 AM   #49
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This is a list of the safest areas in the US. 3 of the top 5 safest areas are within ~20 miles of where i've lived my whole life. Crime like others here face(Ha,W2R, ect.) is unimaginable to me so it's not much of a consideration when chosing a home. In some areas that may be THE consideration most important in choosing a home.
Yes Aaron, where you live is going to be very different from the central areas of any big city. As big cities go, Seattle is not bad. But to live downtown or within a quarter mile or so of downtown, anything not nailed down pretty well is going to disappear, and violent crime is an everyday occurance, not every day on every street, but enough that prudence requires awareness.

There are good areas where crime rarely happens, even urban places like Bellevue but mostly expensive suburbs either gated or at considerable distance from the type of populations that do most of this kind of thing. But if you want a walking type of lifestyle and you like downtown, as I do, these are too far away. I know of one area that I could afford, but the type of building quality that I am looking for is much more expensive there. As for the garage issues, cars get prowled and stuff and car parts stolen from expensive cars in many underground locked garages. Also women expecially are conscious of going down into the garage where no one would hear them. They want it locked up, and on-site monitored security cameras help too. Even very good security can't make that impossible, but it makes it less likely.

Ha
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Old 05-24-2010, 08:30 AM   #50
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Wow, thank you all for all of the responses. Lemme ask another question.
If you were retired and renting, all assets in a standard conservative portfolio, what is the maximum percentage of your total assets you would consider spending on a house or condo?
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Old 05-24-2010, 08:47 AM   #51
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If you were retired and renting, all assets in a standard conservative portfolio, what is the maximum percentage of your total assets you would consider spending on a house or condo?
Of course it depends on the size of your assets , but I would say less than 20%.
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Old 05-24-2010, 08:48 AM   #52
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My only experience with multi-story buildings has been apartment living, and invariably the people above me would tromp loudly on the floor in the middle of the night. I remember one who would throw his big work boots on the floor in his bedroom (right above mine) at 2 AM and wake me up. The bass from his stereo nearly removed all of my fillings. Plus, I swear he gave his toddle billiard balls to bounce and roll around the kitchen floor (sounded like it, anyway). And then my last apartment (before this house) was awful because I thought (but was not sure) that the ear-splitting screaming coming through my bedroom walls from the next apartment might be part of a spousal abuse situation and was constantly conflicted about whether or not to report it. I had no facts but it was an uncomfortable situation.
That about mirrors my experience living in apartments. Never again, unless I go deaf.
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Old 05-24-2010, 11:39 AM   #53
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It looks like we are going to have to move out of our tiny, funky, aerie-on-the-alley (recently sold and new owners unlikely to want strangers living in their back yard)

so we are thinking about buying a condo....
Have you considered renting in any other "laneway homes"? They seem to provide the best of all worlds. Maybe the new owners will like you as tenants? Show them the numbers.

Avoid buying a condo in pre-release. It is quite possible that you will get stuck with less than 100% occupancy. And then you will pay extra HOAs to cover the shortfall. e.g at 75% occupancy, the HOA fees need to be 33% higher than normal before considering reserves.

For an SWR of 4%, I would say no more than 1% should be devoted to housing expense. Anything above that would be considered lifestyle expense that would detract from other budget items.
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Old 05-24-2010, 12:00 PM   #54
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Wow, thank you all for all of the responses. Lemme ask another question.
If you were retired and renting, all assets in a standard conservative portfolio, what is the maximum percentage of your total assets you would consider spending on a house or condo?
I'd have no problem spending 20% of my total assets on the cash purchase of a house or condo if I felt it would lead to a huge improvement in quality of life.

I originally said "20%-25%" but after thinking about it, I think 20% tops. I dunno. Maybe if a place was unbelievably perfect in all possible ways, 25%. I'm not so sure that a place like that exists, though.

That said, I am planning to spend less than 10% of my total assets (including proceeds from my present house), on my next house up north. All I need in a house is peace and quiet in a relatively low crime neighborhood near businesses (and of course, near Frank so we have to coordinate our home purchases when we move). I don't need square footage or a newer home so that helps. Just because I feel that I *can* afford to spend 20% doesn't mean I have to spend that much.
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Old 05-24-2010, 12:06 PM   #55
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Wow, thank you all for all of the responses. Lemme ask another question.
If you were retired and renting, all assets in a standard conservative portfolio, what is the maximum percentage of your total assets you would consider spending on a house or condo?
I am retired and renting within walking distance of everything I want including National Park land. Zero percent.
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Old 05-24-2010, 12:07 PM   #56
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Have you considered renting in any other "laneway homes"? They seem to provide the best of all worlds. Maybe the new owners will like you as tenants? Show them the numbers.

Avoid buying a condo in pre-release. It is quite possible that you will get stuck with less than 100% occupancy. And then you will pay extra HOAs to cover the shortfall. e.g at 75% occupancy, the HOA fees need to be 33% higher than normal before considering reserves.

For an SWR of 4%, I would say no more than 1% should be devoted to housing expense. Anything above that would be considered lifestyle expense that would detract from other budget items.
We have asked the real estate agent to contact the new owners and find out what their intentions are. However, I am not hopeful. They just sold their internet company and are rolling in dough. They dropped $1.15MM cash on this place just to have a place to live while their new house is being built. Our rent is pocket change to them.

This is one of those what do you want decisions. We could afford the condo, but as you say, it would throw our budget out of balance. Koyaanisqatsi and all that. We wouldn't exactly be eating beenie weenies every day, but it wouldn't be LBYM either.
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Old 05-24-2010, 01:22 PM   #57
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I am retired and renting within walking distance of everything I want including National Park land. Zero percent.
How does 0% pay your rent?

Ha
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Old 05-24-2010, 01:36 PM   #58
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How does 0% pay your rent?

Ha
and I thought it was not rocket science, my number's up. Since I'm planning no changes in residence, I would not take any percentage of my NW for a house or condo.
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Old 05-24-2010, 02:40 PM   #59
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We just bought a condo so went thru what you are going thru now. It is easy to get dazzled by new construction, everything is lovely and shiny as you walk thru the display unit, until you smack yourself around the head and realise your furniture is going to be vastly different.

We made a list on what we wanted, and going into the process we realised we would like have to compromise on something. The compromise for us in the end was not having a sea view. We did look at new construction, however what put us off in each instance was the location, usually newer building are in the less choice locations, because the best locations were built out years ago.

After my first round of viewings I also made a list of what the monthly fees were in each of the condos in Honolulu and what was included. Making that list helped me identify what I felt comfortable with. Some complexes had monthly fees of $800+ a month and I knew those fees would only head in 1 direction. I figured I could live with up to $650 a month, however where we bought was only $470.

I probably looked at 30+ complexes. The first time I looked at the condo complex we purchased in I thought it was ok. However, after viewing a number of other apts, some with the ocean view, I went back to our complex. I walked in and it just felt right. Our complex was built in 1963 so the teething problems are gone. I read the condo minutes, studied the financials, there have been no defaults or foreclosures in the association, only 1 person has been late paying their monthly fees. In Hawaii, a condo association is required to have a 20 year plan for their reserves, so was able to see what work is scheduled for the next 20 years and how they will get the money to do it.

I would not buy into a complex just because it was cheap, nor would I buy because it is best in town. For me, you know when you walk in, it's the general vibe of the place. We have really high ceilings, fresh breezes, it's a good walking distance from restaurants and coffee shops, walkable to the beaches. I would rather spend a bit extra to get what I want than settle for something that is ok.
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Old 05-24-2010, 02:42 PM   #60
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One thing that was mentioned when I was looking, normally if you buy in new construction, the owners are required to each put up 2 months of the monthly fees in advance to seed the reserve funds.

Another reason I would not buy new construction is you do not know what litigation may be around the corner. One of the best new buildings in HOnolulu built in the past few years is the subject of litigation between the owners and builders so as you can imagine banks will not give loans to purchase in that complex and there are a bundle of apts for sale. Not a nice position to find yourself in.
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