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Old 04-05-2008, 10:51 PM   #21
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I think a condo arrangement can work if a) you can live comfortably with the various deed restrictions, b) the big expenses are those you would avail yourself of regularly (why pay for a golf course cost if you don't play), and c) you have plenty of cushion in your budget for rising fees over time. Fees go up, but so would the homeowner's costs for insurance, roofs, maintenance, etc.

Does this seem accurate to those of you who live in condos?
Yes - this is accurate - at least for my condo in Az.

a) I can live with our HOA rules. Cant grill out on the balcony. Window treatments have to be per HOA. No owner parking in guest parking areas. Strict garbage / recycle bin time in - time out policy. No glass in pool area. No dogs more than 30 lbs.

b) No golf course in my community but I dont golf. We have a community pool that I've been in once, and a little gym that I use quite often. There really isnt many benefits I pay for that I dont use.

c) my HOA fees have gone from 135 per month to 187 per month since 2002. Havent had a special assessment yet.
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Old 04-06-2008, 10:13 AM   #22
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No true in our experience. We've been renting now for 5 years and in our 3rd complex. All 3 have been expensive, exclusive, very well kept gated complexes and all have plenty of folks with dogs of all shapes and sizes.

When we started renting it was to see how we liked it as we plan to do a lot of travel and want to "lock and leave" for many weeks at a time. So far we have been extremely happy with the arrangements, and in fact has enabled me to apply for and change job locations twice, very easily. (same megacorp).

You need to have a bohemian nature and accept that customization and peronalization in an apartment is very limited, so it is not for everyone.
I'm glad that you found a great place with your dog. Maybe it's because I live in a college town that the dog friendly rentals are burgers.
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Old 04-06-2008, 10:20 AM   #23
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I'm glad that you found a great place with your dog. Maybe it's because I live in a college town that the dog friendly rentals are burgers.
We don't actually own a dog, just wanted to point out that there are plenty of quality apartments available that take dogs.
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Old 04-06-2008, 11:57 AM   #24
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I've been living in the same modest, easy to maintain single family home on a small lot for 31 years. I also keep fairly close tabs on MIL who has been living in a condo for a decade or so and I'm quite familar with the pros and cons of her situation.

A few observations:

MIL's combination of property taxes plus association fees seems expensive. It seems like a condo assessed at $200k should be taxed less than a single family home assessed at $200k since the condo undoubtedly requires fewer services. But no, in her town at least, same level of real estate taxes. And she uses few of the ammenities built into her HOA assessment.

Her apartment-style condo makes me feel way too "up-close and personal" with the neighbors. Example, folks passing down the hall talking loudly can be heard inside her unit as they pass the door.

A very positive change occurred five years ago when the association voted to not allow owners to rent units, owner occupancy only. Renters had to move out when leases expired. There was a little upheaval for a couple of years as landlords grumbled and sold but the results have been terrific. Now all units are occupied by their owners, mostly older folks, and the sounds of un-mufflered Harleys being reved up in the indoor parking area at 3:00 AM is gone forever.

DW and I thought we'd be likely candidates for condo living when we retired, but don't feel that way anymore. While it takes an effort and some planning to leave our house secured while traveling, for us, it's worth it. We'd easily pay as much for a condo as our house would sell for. We'd need something large enough to accomodate house guests and would insist on a very nice building. Here in the Chicago area, that means expensive.

Mostly it's just a matter of lifestyle preference and, for us, so far, we're voting for our single family home despite the issue of securing it for travel.
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Old 04-06-2008, 12:02 PM   #25
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And finally, the ongoing fee-creep makes it very hard to plan your housing costs. But over the long haul, I think we will have spent as much or more on our single family home as we would have in a well-maintained condo. It's just that we've had more control over the timing of certain projects. I suspect that if you stay in a condo long enough, the overall costs even out or are lower.

I think a condo arrangement can work if a) you can live comfortably with the various deed restrictions, b) the big expenses are those you would avail yourself of regularly (why pay for a golf course cost if you don't play), and c) you have plenty of cushion in your budget for rising fees over time. Fees go up, but so would the homeowner's costs for insurance, roofs, maintenance, etc.

Does this seem accurate to those of you who live in condos?
Rich,

I think you've got it about right. We're going on year 6 in our condo and have been very happy here, but that is because we did our homework prior to buying and are easygoing. I've been on the board of our HOA for the past five years and the "easygoing" part really, really helps out. We've got a sensible, practical board that wants people to be happy and comfortable in their homes, and we use that as a decision-making yardstick. It's worked well.

Fees for our unit have gone up quite a bit since we bought it -- from $280/month five years ago to $415/month now (includes water, hot water, sewer, landscape/parking maintenance and swimming pool as well as all structural / building maintenance), mainly because the cost of roofs and insurance has skyrocketed. Several of our members are retirees on very fixed incomes; we all fret about them when the budget shows that we need to up the fees. We've decided to up the fees, though, rather than just cross our fingers and hope for the best -- none of us want an $80K/unit special assessment, either. So we've got a fat bank account, with enough coming in each month to add to the reserves as well as pay out expenditures.

I'd second the advice above to carefully examine the financial records of any HOA you might be joining -- if there's trouble with the books, the unit will be extra hard to unload (as a friend of ours, facing a $100K special assessment, just found out).

Finally, the ratio of homeowners to renters is something to consider. We've got a lot of homeowners in our complex, it makes things easier to get done.
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Old 04-06-2008, 12:12 PM   #26
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Fees for our unit have gone up quite a bit since we bought it -- from $280/month five years ago to $415/month now
Wow! That's equivalent to an 8.2% increase per year. Sure exceeds the CPI (but then what doesn't - - I just got gas for the first time since early February, and the price increase really floored me).
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Old 04-06-2008, 01:02 PM   #27
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Want2Retire, yep, it's been a steep climb up with no end in sight. The drivers are two-fold: One, the roofs on our 30-year-old buildings are slowly failing, so we've got to replace them, and roofing costs are going up because all of their materials costs are going up (because most roofing is petroleum-based --- even here in red-tile-roof-land).

Second, our earthquake and fire insurance keeps going up -- it more than doubled last year alone. So while our expenditures have remained constant (or even lowered, in some cases), it doesn't matter -- those HOA fees have got to keep going up. I suspect they will continue a similar trajectory in the future.
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Old 04-06-2008, 01:16 PM   #28
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does the size of a condo make a big difference? i know that after a tower on a beach has been deteriorating for 30 years that it is very expensive to redo all the balconies (read: multi-millions). i know that just the plumbing on my friend's air conditioning system will cost their building $2mm.

on the one hand in a big building there are more units to spread the cost. but because of the size & complexity of the building, are the costs per unit exponentially larger than they would be in a smaller building?
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Old 04-06-2008, 02:05 PM   #29
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Maintenance on construction, SFDs and condos, near salt water is much higher than inland.
Insurance, particularly in FL, has gone up for all types of housing.

I affirm what urchina said.

Have a CPA review their financials, obtain a copy of their latest reserve study - hire a home inspector to not only look at the unit but also look at the building with the reserve study in hand.
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Old 04-06-2008, 05:16 PM   #30
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I would also caution against buying a new condominium - there are so new many buildings where only a few units have sold... those buyers are in for trouble and I would not want to be one of them. We saw that happen in the late 80's when many units went for auction and it took 20 years for the people that paid full price at that time to recover.

I would also suggest you buy a condo that is similar or more in price than a SFH in the area - that way, people are there because they CHOOSE to live in a condo, not because that's the only thing they can afford. People voluntarily living in a condo instead of a SFH will, naturally, be quieter and more respectful and better neighbors.
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Old 04-06-2008, 05:36 PM   #31
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Have a CPA review their financials, obtain a copy of their latest reserve study - hire a home inspector to not only look at the unit but also look at the building with the reserve study in hand.
I second that. When I moved into my condo nine years ago I didn't know what a reserve study was, and it turned out the board didn't either. There was no reserve study because the HOA had been using a big developer settlement from the past as the reserves. They just spent it until it was gone and then had no plan. It took a few years, but that board got overthrown, and a new board came in and started running things right. It took a $5k special assessment and about 20% dues increase to get back on track though.
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Old 04-07-2008, 12:30 AM   #32
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I would also caution against buying a new condominium - there are so new many buildings where only a few units have sold... those buyers are in for trouble and I would not want to be one of them. We saw that happen in the late 80's when many units went for auction and it took 20 years for the people that paid full price at that time to recover.

I would also suggest you buy a condo that is similar or more in price than a SFH in the area - that way, people are there because they CHOOSE to live in a condo, not because that's the only thing they can afford. People voluntarily living in a condo instead of a SFH will, naturally, be quieter and more respectful and better neighbors.
If Rich is planning to move near his son SFD may not be in his budget. $750 is a starter home in a decent neighborhood in Sunnyvale, for example. For that much he MIGHT find a condo in Mountain View, a closet in Los Altos or Palo Alto. My daughter has a SFD in Los Altos, the cost made me shudder.
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