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Re: Condo Purchase
Old 01-27-2007, 12:57 AM   #21
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Re: Condo Purchase

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Originally Posted by Charles
Separate question ... here in Nashville we're seeing what I consider stupid prices for condos. Getting relatively more expensive than single family homes. Crazy from my point of view, but perhaps a demographic thing. Anyone else seeing this in your markets?
We're seeing it here in semi-rural WA. This is an area not known for speculation, but I am seeing soccer moms speculate by buying new condos here. It's amazing. Of the few people I know who purchased a condo in this area, only one did it for a sane reason -- as a place for their elder inlaws to live without being too close.
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Re: Condo Purchase
Old 01-27-2007, 08:45 AM   #22
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Re: Condo Purchase

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Originally Posted by macdaddy
I've seen other associations pass no-rent provisions and it has always lowered the value of their units
This wasn't the case with MIL, according to recent sales, but I'm sure it could work out that was in some instances. In her case, even if the potential selling price of her unit went down a few percent, having a dramatically improved standard of living over the years would be well worth it.
Quote:
It also limits the pool of sellers you can sell to.
I guess that's the point. For folks planning on medium to long term occupation of their condo, having the other units occupied by owners is a huge plus. Real estate investment companies, speculators, etc., just don't seem to have the same point of view as owner-occupiers. I'd just as soon have those folks removed from the pool of buyers my neighers could sell to.[/quote]
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Re: Condo Purchase
Old 01-27-2007, 12:50 PM   #23
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Re: Condo Purchase

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Originally Posted by justin
I got stuck in a bind when trying to sell my condo. I had a buyer under contract, but he couldn't get financing for the condo unit as owner-occupied because one of the loan underwriting terms was that the condo development must be at least 50% owner occupied. Apparently, our development had slipped to 48% owner occupied, so this guy was going to have to pay more for a commercial loan - he backed out by invoking the financing contingency clause. I called around and the requirement for 51+% owner occupied was pretty common for loan underwriting on condos.
that's mortgage-company talk for "We don't want to loan money to this guy but we can't afford to be sued over it so we'll keep tweaking him on technicalities until he gives up and goes away."


[/quote]

We ran up against this same issue when we went to sell our Alabama condo post-hurricanes Ivan/Dennis/Katrina. It seems this rule has existed for awhile, but mortgage companies had been looking the other way. When we obtained the financing for our condo we had no problem getting it approved as a 2nd home, with 1st home loan rates. Trying to sell it was a different story. Suddenly all the banks were looking into rental versus owner occupied building percentages and what the buyer was planning to do with the unit. This was a big topic of conversation among the unit owners so I know it wasn't just my buyer's credit driving it. He ultimately had to go the commercial loan route (since he ended up with a rate of 10% there were obviously some credit issues there as well )
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Re: Condo Purchase
Old 01-27-2007, 04:06 PM   #24
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Re: Condo Purchase

Another issue to consider is this... it is probably best to buy a condo that is similar in price to SFHs in the area. Reason being is when people CHOOSE to buy a condo instead of a SFH (when they can afford either), they will be more willing to get along, be quieter and generally be a good neighbor.

If the condo is significantly cheaper than a SFH - people buy a condo because they can't afford a SFH - then you can be in a whole socio-economic thing with folks who should not live in a condo complex, but who do so because they cannot afford anything else.

Then you can find yourself in territory with lunatics and nutcases. I had that experience with neighbors calling the police on neighbors at 4 p.m on a Saturday over a guy playing acoustic guitar.
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Re: Condo Purchase
Old 01-27-2007, 04:51 PM   #25
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Re: Condo Purchase

Sparky, that's a good point. However, if you ever want to rent out the unit, your return on a luxury condo will be much lower than your return on an "entry level professional" condo.
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Re: Condo Purchase
Old 01-27-2007, 06:45 PM   #26
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Re: Condo Purchase

I have been told that the asking price $/SqFt for condos in downtown Portland is comparable to SFO and NYC. Lots of locals are scratching their heads.
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Re: Condo Purchase
Old 01-28-2007, 12:01 AM   #27
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Re: Condo Purchase

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Originally Posted by Brat
I have been told that the asking price $/SqFt for condos in downtown Portland is comparable to SFO and NYC. Lots of locals are scratching their heads.
In Boston it's even "worse"... $650/sq ft for a nice condo vs $500/sq ft for a nice house. This could reflect the start of an older folks' preference for condos in retirement (and less land to build them on, at least around here).
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Re: Condo Purchase
Old 01-28-2007, 12:16 AM   #28
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Re: Condo Purchase

Here is an Assn for Condo Assns, contains several interesting checklists and links:
http://www.communityassociations.net/about_can.html
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Re: Condo Purchase
Old 01-28-2007, 01:10 AM   #29
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Re: Condo Purchase

Some financial points:

You need to decide if you're going to use the condo as a rental or vacation home. Your family income will have a lot to do with your decision. If you treat it as a rental, you lose the benefit of writing off losses as your family income goes from $100,000 to $150,000. For every $1,000 above $100,000 you lose 2%. You'll also need to live in your condo 2 out of the last 5 years to avoid paying taxes on the gains if/when you decide to sell.

When buying your condo, ask about the tax assessment. Our agent showed as a listing for our unit which stated the yearly taxes were $600.00+. Many states provide full-time residents reduced real estate taxes due to their homestead provisions. Since I'm a out-of state/part-time resident my taxes are almost 4 times the amount shown on the listing.

We decided to have our condo be a seasonal rental for 3-4 months of the year until my wife and I retire. This way we maximize the tax benefits, limit the wear and tear on the unit and can use it in the off season while doing maintenance or up to 14 days of vacation use.

You need to look at the budget/balance sheet for the Condo Association. Are there enough reserves to cover any unforeseen repairs? It's not unheard of to get hit with a special assessment. Are there any liens, or lawsuits pending against the Condo Association.

DW and I bought are condo about 4 years ago in Florida. We were considering a SFR, but chose a condo because our family home is a 2 hour plane ride to the condo. Our condo is in a gated community so I don't have to worry about vandalism and as other posters have mentioned, I don't have to do a thing.

A year after purchasing the condo, Hurricanes Charley and Francis cause major damage to the condo development. Our unit was uninhabitable for almost two years -- and we were still paying the condo fee and a special assessment for the insurance deductible. But, I think having a condo was a lot less hassle in getting repairs completed than if I had a SFR.

Since we bought the condo, it appreciated over 100%, we pretty much got a new unit due to the renovations/repairs from the hurricane damage. So things have worked out pretty well.

dwk
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Re: Condo Purchase
Old 01-28-2007, 03:11 PM   #30
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Re: Condo Purchase

Don't underestimate how living in a condo building will affect you. We have friends in St. Pete who live in a beautiful condo (quiet, great HOA, gorgeous grounds and view) that looks out onto Boca Ciega Cay. We enjoy visiting but we are always happy to get back to our house on the ground. The condo husband has lived mostly in houses (condo couple is recently married). The condo living is really starting to get on his nerves but the market is dead and there aren't even any lookers.
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Re: Condo Purchase
Old 01-28-2007, 03:28 PM   #31
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Re: Condo Purchase

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Originally Posted by Buckeye
The condo husband has lived mostly in houses (condo couple is recently married). The condo living is really starting to get on his nerves but the market is dead and there aren't even any lookers.
What are his complaints about condo living?

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Re: Condo Purchase
Old 01-28-2007, 03:38 PM   #32
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Re: Condo Purchase

Condo husband's complaints are that he can't just do things his way. For example, there is a nice barbeque area on the grounds but he can't barbeque on his deck. There is an area to wash his car, but he can't just go out in his driveway and wash his car. They have covered parking for one car and a storage closet but he'd like to have a garage to park both cars in and to putter around in. There are a couple very nice pools but he'd like to have his own pool just outside the house.
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Re: Condo Purchase
Old 01-28-2007, 03:52 PM   #33
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Re: Condo Purchase

I can relate to condo husband's complaints. For once in my life, I would like to have my own hottub or pool. Nothing huge, just private and a few steps from my house. No way that is going to happen in the condos and townhouses I view.
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Re: Condo Purchase
Old 01-28-2007, 04:36 PM   #34
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Re: Condo Purchase

Spanky, I think your comment about low-end condos vs. condos which are more similar to single family homes is so astute! A few months ago, I escaped from my bargain basement priced condo. It was fine when it was first built twenty years ago. Mostly singles and couples, just a few families with one kid who were saving up for a house. Although it was the lowest priced housing in the area (prices in the late eighties starting about 60K), it seemed like people were there because they wanted the condo lifestyle, not because they couldn't afford anything else. Fast forward twenty years and many of those original owners have moved (to SFH for those who got married or had kids) and the number of rental units increased to be many rentals (some chose to become landlords rather than sell). The people moving in even as owners changed (most recently, a single mother with a 10 year old son and a live-in boyfriend and a mother and sister who moved in with them---five people in a 2 BR condo with 800 square feet. Kinda rednecky---would do best in a SFH but couldn't even afford a 3 BR condo in the complex, which is only $20,000 more).

After having major issues with renters below us (hearing their music, door slamming, parties outside at 2 a.m., domestic violence), we moved to a condo that is the best compromise between condo and SF living: quadraplex ranch condos. One level (yay---no more shlepping groceries up the stairs), a garage (finally!), no neighbors above or below. The next door neighbor has their garage next to our garage, but no other common walls. The neighbors behind share one wall (kitchen and third bedroom area), but there is a good firewall inbetween and the places are well built, so noise is not a problem.

I noticed that many people recommended not living on the bottom floor of a condo, but we lived on top and still heard our neighbors and felt their door below slam. It's still better to live on top and not hear people walking overhead, but some condos still can be noisy even on the second floor.

My first condo was in an elevator building, people above and below, but much less noisy than a smallish garden apartment building.

Although we're only (?!?) 52, we moved into a complex intended for active seniors. It's not restricted to people over a certain age, but it has attracted mostly people in their sixties to eighties, with a few in their forties and fifties. I think it's a great idea in theory for all different people of various socioeconomic backgrounds and ages to live together, but it was getting rough living so closely with twenty to thirty year olds who partied all night, played loud music, and were very inconsiderate in general. I'm not saying my neighbors here are perfect (there's one woman who doesn't pick up after her dog, some neighbors have their "adult" kids visit them and who can be noisy, throw cigarette butts around, but it beats what we came from (lots of discarded beer cans, bubblegum on the stairs, etc.).
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Re: Condo Purchase
Old 01-29-2007, 08:50 AM   #35
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Re: Condo Purchase

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Originally Posted by tangomonster
Spanky, I think your comment about low-end condos vs. condos which are more similar to single family homes is so astute!
Well, thanks! We also recently sold our bargain basement condo, which had greatly appreciated in value, but was still a POS.

We ended up buying a luxury waterfront condo some 30 miles away. We bought on the top floor, between two units and soundproofed the common walls (Quiet Rock from QuietSolutions.com (if you can hang drywall, you can hang Quiet Rock). Each 5/8" 4'x8' sheet of Quiet Rock is the equivalent of 8 regular sheets of drywall.

The price of the unit is similar to a SFH. Surprisingly, we have had more social contacts (with nice, decent people) in six months than we've had in years at our POS condo. And, amazingly, very few people ask what you do for a living!
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Re: Condo Purchase
Old 01-29-2007, 09:19 AM   #36
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Re: Condo Purchase

Don't know how much the soundproofing was, but I'll bet it was worth every penny! Your condo including the neighbors sounds nice. Although we miss (to some extent) the diversity of incomes, jobs, lifestyles,
ethnicities we had in our old place, it is just so nice to live with people who as you pointed out are choosing to live in a condo because the ease of the lifestyle suits them rather than as a last resort (although interestingly, the renets below us who we had so much trouble with were paying $1000 a month rent, which to me is far from cheap---you could own the place for a $600 a month mortgage, but downpayment/credit issues may prevent ownership. And there were regular rental apartments across the street for a couple of hundred dollars cheaper, but these low-lifes chose our condo complex and, with our luck, the unit below!). Oh well----as you can image, there is a world of difference between $130K and $240K condo. We feel like we died and went to heaven, even though it is small (1700 sf) by most people's standards.
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Re: Condo Purchase
Old 01-29-2007, 03:31 PM   #37
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Re: Condo Purchase

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Originally Posted by tangomonster
Don't know how much the soundproofing was, but I'll bet it was worth every penny! Your condo including the neighbors sounds nice.
The soundproofing makes the unit seem like an end unit or even a SFH; we rarely hear anything from our neighbors - it's about $200 per 4'x8' piece of drywall; we used about 8 pieces and, yes, it was well worth the investment.

Life in our new condo complex is like night and day compared to the old POS condo. I can't believe we put up with the sort of residents in our last place for as long as we did (screaming neighbors, people keying cars, neighbors calling the police on each other all the time, ad nauseum). It just seemed that the cheaper place attracted people that were not very intelligent, sophisticated or even civilized and polite.

While the new place it not perfect, it is a HELL of a lot better than the old.
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Re: Condo Purchase
Old 01-31-2007, 10:26 AM   #38
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Re: Condo Purchase

Living in condo now for the first time. Has it's ups and downs. I think you want a place that has a substantial full time residency. I own a place at the beach and MOST people are here only during the summers ( in Maine). That means that they are here on vacation and it's not really their home. Changes their perspective of day to day life. Every day is a party. Gets old REAL fast. Then they vanish, come back in the spring wondering way no one has fixed what it was they or their grand kids broke last year.

I'd do it again, but I would look very carefully at the building, finances and any FUTURE ( you know, the ones coming that are causing the owner to sell but doesn't want the buyer to know about ) special assessments and how well the board functions. The Board is a whole nother topic and brings it's own heart burn.

Good luck.
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