Condo purchase advice

[ChrisC]

One in particular is a 120 unit building with a very energetic new president and treasurer, as well as an excellent onsite manager with an office open normal business hours who even gets a unit to live in. His job is fully professional with health insurance, 401 K etc. For a typical middle income retiree, I think it helps toward commonality of purpose if the residents are not extremely wealthy, or using their units as 2nd or third homes

* * * I am trying to avoid units without community laundry rooms. I really do not want washer and dryer, especially when shoehorned into a small closet. I know that W&D in the unit is a selling point, but that holds both coming and going and once I buy I do not expect to go anywhere voluntarily. Same with water heaters- when I can get it I prefer hot water from a central boiler.

* * * *
Ha

An excellent onsite manager is worth his weight in gold. It makes living in a condominium much more bearable and an excellent one can save the HOA a lot of money. So, anyone looking at a condo should inquire about the management company running the joint.

On the issue of washer and dryers, I prefer to have them in my closet; I have the side-by-side and stackable ones in the two units I own. I'd rather not go to a community laundry room, but I can see going there if I were single and lookingt for some company. I also have a tankless water heater in one unit; it works well for me.

 

[Sparky]

Another issue is the condo manager's registration or license with the state... here in CT, it is required but many boards of directors are unaware of this. One more reason to buy into a large (over 100 units) place as they tend to be more on top of legal and managerial issues. Larger complexes usually will avoid the traps of smaller complexes (father and son taking over the board of directors and directing money their way, which can really cause trouble if they are in collaberation with a property manager and do not have fair elections and have two sets of books - can you tell I've been down this road before?).

Next issue is the common area - are you paying for a pool, beaches, tennis courts, full-time employees? These are always less expensive when many owners band together to pay for them.

I would agree with Ha's thing about a common boiler vs. an owner's hot water heater - I moved from such a place and have to take shorter showers and baths (that I have to pay for!).

After all I've been through, I bought another condo at a large complex (over 100 units), did my due diligence and am very happy with my beachfront unit!

 

[BTravlin]

We have one of each: shoehorned into small closet in our Mexico condo, and shared with four other penthouses up north. The shared one is far more effective and conflicts are never a serious problem. But it remains an emotional issue, especially for the washer-person.

Curious as to where in Mexico your condo is located?

Never mind, dug around a little and found it. Very nice.

 

[Brat]

We bought in a building with about 60 owners. The building employs manager, maintenance and staff... all great folks who do great work (head maintenance man is licenced to maintain and repair boiler system). Board of Directors leverage professional talents of owners for committees.

There is a common laundry room but many have stacked washers/dryers in unit used particularly for small items.

Older building constructed for this use, HUGE store-room with each unit and parking place designed for a 60s Caddie. Need I say more.

 

[Zoocat]

Events in my old complex are unfolding just as I had feared. One owner is trying to sell but found that his roof is a problem with the inspection. He wants the HOA to fix it now but the HOA cannot really do that with the suit going on. I don't know why this particular owner wants to sell but I do know several owners who have lost their incomes. If they can't sell, then foreclosure is a possibility. While the suit goes on, the downward spiral in the complex will likely be unpleasant.

Another point on getting a mortgage on a condo: in my current complex, one owner tried to refinance but the lender refused citing inadequate HOA reserves. This applies to buyers as well.

 

[braumeister]

FWIW, I've lived in just about every type of housing known to man, but my two experiences with a condo (first time for 4 years back in the mid-70s, second time for two years in the late 80s) is something I look back on with great fondness, and I would most definitely consider it again.

I absolutely hate high-rise buildings, and my three experiences with them have been terrible.
I like single family detached homes (I live in one now), and while I enjoy the privacy, there is a lot of work on both the house and the yard that I won't be able to do forever, not to mention the cost of all that work.

The high point of condo living (both times were in brick townhouses) was the ability to simply lock up and take off for weeks at a time with no worries.

The low point was twofold: some of them have extremely restrictive rules, and you may have to deal with an association board that thinks very differently from how you think. Also, you might be on the hook for some very expensive maintenance/repair work that you never anticipated (in one case, we needed major utility line moves, with the attendant repaving and general upheaval. in another case, we needed complete roof replacement when it was found that the builder had used substandard materials).

Even though I expect to eventually move into a condo again when I can't do all the house/yard maintenance myself, I expect to spend a very long time researching the possibilities. I will read the HOA covenants and restrictions very carefully, with all the small print, and I will take nothing for granted. I will also talk with several people who live there, and listen carefully.

Bottom line: caveat emptor, but I really believe condo living can be a great thing.

 

[haha]

I absolutely hate high-rise buildings, and my three experiences with them have been terrible.

Could you expand on this a bit?

Thanks, Ha

 

[braumeister]

Purely a personal thing. I just get a claustrophobic feeling when I'm surrounded by other apartments all around me and below and above me, with no way out except an elevator or a stairwell. No actual reason for it, but I've been forced by circumstances to live in them (New York, Washington DC, Rio de Janeiro, and Los Angeles), and I couldn't wait to get away.

 

[DangerMouse]

I'm a another that prefers low rise/low density condos over a high rise. We had a condo in a high rise in Sydney years ago, the monthly fees were high due to the elevators which always seemed to break down. Personally I could never live on a really high floor, being above the 10th floor does my head in, I would be too scared to go on the balcony nor would I go too close to the windows.

 

[haha]

I'm a another that prefers low rise/low density condos over a high rise. We had a condo in a high rise in Sydney years ago, the monthly fees were high due to the elevators which always seemed to break down. Personally I could never live on a really high floor, being above the 10th floor does my head in, I would be too scared to go on the balcony nor would I go too close to the windows.

Yesterday I went out on the balconey in an 18th floor unit with my realtor. She stayed in the room, but when I came in she told me that just having me out there almost gave her heart failure.

When I was a college student I took my girlfriend on a climb on Mt Washington. Nothing particualrly technical, but some passages of considerable exposure. There was a chimney where a mountaineering club had driven rebar hand and foot holds into the granite. I started up and got to the top. I pulled myself out and looked down-way down. It was safe, but maybe 500' of space below us. She was frozen, because she had looked down too soon. She was able to be talked up to where I could get a hand on her while I was lying on the rock and pull her out. Scared the you-know out of both of us. We found an alternate route back down, and found hikes with no adrenalin for our future outings together.

Ha

 

[braumeister]

That's great stuff.
Even though I grew up in NYC, I was always somewhat afraid of getting too close to the edge in a tall building.

What cured me was taking up rock climbing as a hobby while in college.
Weekends on the Shawangunk cliffs worked wonders, and I've never had acrophobia again.

 

[DangerMouse]

I'm not a big fan of heights. At places like the grand canyon, I can't even stand going up to the edge where the railing is. Flying doesn't bother me, it's as if being inside the plane provides safety. There is no way on this earth you would ever get me sky diving or bungee jumping. I am not even a big fan of roller coasters because of the height issue.

 

[Brat]

We are on the 5th floor of a 10 story building and have a large deck. I plan to fill up the planters to provide a connection to the earth below.

Neither husband or I have an issue with heights so long as we know we are safe. When our home was on the market we learned that many do have an issue with heights.

The only time I get nervous about heights is when my son goes up a mast or my daughter climbs in Jackson Hole. Thank heaves she climb any more and my son now uses a crane to rig a boat.

 

[braumeister]

With all due respect, I think this thread has now been hijacked for long enough, and we'd better let it get back to the original intent (condo purchase advice). Acrophobia is a big enough topic to have its own thread, but I doubt if this is the forum for it.

 

[Brat]

Getting back to the original question: before buying a condo do a lot of research and understand the trade-offs between buying vs renting housing. The problem with a condo is that you are buying into a community which has a culture. You don't want to be a member of a group with short-term thinking or unwilling to maintain standards which make it a pleasant place to live because the cost of moving on (selling real estate) isn't cheap. The HOA can't evict an owner who is a PITA.

 

[haha]

Getting back to the original question: before buying a condo do a lot of research and understand the trade-offs between buying vs renting housing. The problem with a condo is that you are buying into a community which has a culture. You don't want to be a member of a group with short-term thinking or unwilling to maintain standards which make it a pleasant place to live because the cost of moving on (selling real estate) isn't cheap. The HOA can't evict an owner who is a PITA.

Yes, and another way to look at this is that many of these HOAs are inbred, ossified, and total PITAs in their own right.

Look at the age structure of the membership and choose where yu want to be with the knowledge that comes from this simple demographic reality.

Ha

 

[oilspill]

OTOH, buying instead of renting could be a good inflation hedge...Any advice would be appreciated.

That shouldn't be your primary reason for buying. It's possible to have inflation at the same time as a price collapse in real estate -- if the supply of RE is high. Too many dollars chasing too many houses.

 

[Zoocat]

Getting back to the original question: before buying a condo do a lot of research and understand the trade-offs between buying vs renting housing. The problem with a condo is that you are buying into a community which has a culture. You don't want to be a member of a group with short-term thinking or unwilling to maintain standards which make it a pleasant place to live because the cost of moving on (selling real estate) isn't cheap. The HOA can't evict an owner who is a PITA.

Also, be wary of a community of people with differing goals and agendas, for example a community with a high percentage of landlord owners. Even 40% landlord owners can affect the ability of the community HOA to do its job effectively by, for example, raising fees enough so that there is a sufficient reserve.

Another problem that occurred in my former community was that it turned out some owners were in it for the appreciation. They didn't want to raise fees, which were set unrealistically low by the builder, because they (the owners) wanted to sell at the top, making a hefty profit. Three of the most vocal did exactly that leaving the community with low fees, low reserve, and in financial difficulty.

The fault in this situation also lies with the HOA board who gave in to minority demands.

Not sure how a potential buyer can reserach a HOA enough to find out what's going on without actually contacting HOA board members as well as other owners and doing some interviews.

 

[IndependentlyPoor]

Thanks to everyone for all the good information.

An update.

We have moved into our apartment and it has been, well, an education. All I can say is that I am glad we are renting.

The complex isn't bad - a nice old 1960s place converted to condos. The problem is that the developer went bust, and then the bank went bust. Some folks paid twice what others did for comperable units.

But it is an old complex, with all the problems one might fear. For example, they are putting on a new roof this week. Imagine buying a new condo conversion and then facing a big assessment less than a year later. Hey, waddaya expect for $300/sq.ft.?

The complex also has a chilled water A/C system and they seem to be constantly working on the central chilling plant. It wouldn't surprise me if they have to replace the whole shebang. Another assessment.

We had condensation leaking from the heat exchanger in our apartment, and it turned into a big problem to fix. Also, the A/C folks told our landlord that the chilled water pipes are rusted, leaking, and should be completely replaced. This is the individual owners responsibility.

When we start looking again next year, we will know a lot more about what to look for, but it is intimidating. Seems like a crapshoot unless you happen to know somebody already living there.

 

[Brat]

I think it is important to know someone who lives in the building. If not that require a copy of all correspondence to & from the HOA for the last 3 (or more) years. Ask for a copy of their reserve study and financials.

As I may have mentioned earlier, I wouldn't buy in a building that is a conversion.

Frankly, buying a condo when you are new to a city is dicey. As a renter you have an opportunity to learn who the good builders/developers are, and who are the stinkers. Network, network and do good research.

 

[Sparky]

... require a copy of all correspondence to & from the HOA for the last 3 (or more) years. Ask for a copy of their reserve study and financials.

Tough, if not impossible, to do before making an offer...

 

[Brat]

True, but who wants to plow through all that stuff unless you have found something you are interested in purchasing? The key to all of this is to not 'fall in love' with a property. In this market, while the 'usual and customary' period for reviewing the condition of the unit, building and its HOA is X days, that time can be stretched for weeks - particularly in this market. Realtors will try to push the process but make sure they aren't successful. The key threat is that you are prepared to walk away.

 

[Sparky]

True, but who wants to plow through all that stuff unless you have found something you are interested in purchasing? The key to all of this is to not 'fall in love' with a property. In this market, while the 'usual and customary' period for reviewing the condition of the unit, building and its HOA is X days, that time can be stretched for weeks - particularly in this market. Realtors will try to push the process but make sure they aren't successful. The key threat is that you are prepared to walk away.

Falling in love is always a bad idea (with RE anyway) and perhaps first dates.

 

[walkinwood]

Frankly, buying a condo when you are new to a city is dicey. As a renter you have an opportunity to learn who the good builders/developers are, and who are the stinkers. Network, network and do good research.

This is true - maybe more so - for a single home.

Independently Poor,
Thanks for sharing your experiences. When we sell this house, we plan to rent for a while & your experiences have given us even more reasons to do so.

 

[Zoocat]

I doubt that you could get correspondence but you can access HOA minutes. Many HOA managers have web sites and put the minutes online. Sometimes they are not password protected so you can do some initial research before even making an offer. I've been reading the HOA minutes of some complexes in my area and all I can say is: OMG! No condo for me!

When a building or complex wasn't constructed well to begin with, there are going to be expensive problems forever. Or if it's an old place, or a conversion, I'd also expect that problems will arise.
Independentlypoor, you are very fortunate to be a renter in that situation!