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Based on some of my findings this weekend, I thought it might be worth starting a thread to discuss some of the costs of living in an urban core -vs- living in a single family home area.
Let me set a few boundaries and assumptions before we start down this path:
1. The scope will be limited to OWNING a property. For this conversation, we will exclude rentals.
2. By urban core, I mean areas such as downtown Dallas, downtown Fort Worth or Uptown - all meaning condos.
3. Costs should include all aspects - commuting to work and entertainment, maintenance costs, taxes, insurance, vehicle costs, mortgage and energy. This is where the challenge lies.
With that all stated, there are obvious lifestyle differences in living in a single-family home area. Some of the (overly) general statements that are generally true include:
- In a SFH area, people generally need to drive to entertainment venues (movies, symphony, etc). In an urban core, these items would be available via public transit.
- In a SFH area, people generally need to drive to work. In an urban core, this may of may not be true, depending on job location. For the sake of this discussion, let's assume the person indeed works near public transit.
- The purchase price, on a per square foot basis, is much higher in an urban core compared to a SFH area. Therefore, for a comparable purchase price, a SFH will be much larger than an urban core residence.
- Some SFH areas have HOA dues, but these are generally limited to $150 per month or less, but generally does not include any maintenance on YOUR home, only common areas such as pools and green belts.
- In Urban cores, HOA dues are generally much more, possibly from $300-600/month, but does include exterior maintenance (exterior maint, pool, roof, plantings, etc).
Here's a laundry list of maintenance items going on within our household:
- Gutters, soffits, facia are 32 years old and in need of replacement. ~$8K
- Trees need trimming every 2 years @ $1200 per trimming
- The fence is falling apart. No idea what that will cost - hoping to do patch work as needed to get it through the next 2 years.
- Our windows are also 32 years old. Some of them won't stay open unless propped up.
- I mow the lawn every week for 8 months a year. If I didn't do this, it would cost $25/week at minimum.
- We have a sprinkler system that needs maint (and water usage)
- While our neighborhood only has a $50 per year HOA (voluntary even), we do not have a community pool.
Outside of that, a few other comparisons:
- homes in our neighborhood are going for $130/ft
- the condos I looked at ranged from $180/ft up to $310/ft on the upper floors with most of the options.
- we pay "residential" elec rates in our home. In the downtown condo I looked at, it is submetered at commercial rates. The largest condo that I looked at was 2100 sq ft and was on the corner, yet the most recent electric bill was $99. Our 2576 sq ft home had a bill for $225 in the same month.
Assuming we are comparing the same priced homes - and we'll use $130/ft for my neighborhood and $260/ft for the downtown condo - the mortgage expense is basically the same, so let's compare other items:
- Exterior maint for the house, broken into monthly payments = $50/month tree trimming + $100/mo lawn maint + $250/mo other ext maint (fence, roof, gutters, etc) = ball park of $400 per month (and no pool, to my wife's disappointment)
- Exterior maint for the condo - $390/month HOA dues on one of the units I looked at (1219 sq ft X $0.32/sq ft dues).
- Taxes would be the same since it's the same city and school taxes are close enough to consider it a wash
- Energy costs would be roughly 40% in the condo (not only is it more efficient from a heating/cooling perspective, I believe I was told hot water was included)
- Water costs would be cut in half in the condo - let's say $20/mo -vs- $40/mo
- Trash pickup is included in the condo's HOA fees - $20/mo to the home, $0 to the condo
- No idea on this one... insurance? Can someone fill me in. Is it more or less? Are you just insuring the contents, like in an apartment?
- In our particular situation, we would need to keep 2 cars, but the condo came with 2 parking spaces in their garage. The house had storage in the garage though - so one point to the home.
- Our entertainment driving would be cut by probably 70%, but would need to pay for public transit.
Ok, that's all I have at this point. Need to head to work. Please post your input.
Last edited by lh_newbie; 07-14-2008 at 08:37 AM..
The HOA fees in the condos/townhomes generally cover exterior maintenance, insurance, and some of the other things you have listed. In some cases they cover water and trash. In other cases they cover gas or possibly basic cable. You just have to ask to see what each condo/townhome development offers/covers in their HOA fees. You will need a separate insurance policy for your personal belongings in the event of fire, theft, water damage, etc.
Also, you should probably calculate parking expenses for condos in downtown Dallas. It will probably vary from place to place but unless you negotiate it in the original sale it will be a separate monthly fee not covered in your mortgage or HOA fees.
If you want to do it right, you should do a net-present-value analysis over a given period of time. You should also factor in your time waiting for the bus and train and the risk of getting mugged.
I call checkmate, though.
Here is why:
Last time I checked there were NO babies R us stores in the Urban core I could walk to. And no way am I going to take my kids for a walk in Uptown at any time of the day. No way am I going to send my kids to elem or jr high anyhere near Uptown.
If you want to do it right, you should do a net-present-value analysis over a given period of time. You should also factor in your time waiting for the bus and train and the risk of getting mugged.
I call checkmate, though.
Here is why:
Last time I checked there were NO babies R us stores in the Urban core I could walk to. And no way am I going to take my kids for a walk in Uptown at any time of the day. No way am I going to send my kids to elem or jr high anyhere near Uptown.
This thread isn't about which lifestyle choice is right or wrong - I can appreciate that the choice is not right for some folks, but may be for others - I just wanted to get some of the prices out and to weigh some of the pros/cons.
Keeping this back on subject...
So, some condos include water and trash (that was what I understood at the one I visited this weekend) and HOA dues include building insurance. That's good to know. So the insurance bill would be cut by 75% or so moving from a single family home into a condo. Definitely worth noting. This particular place did include two parking spaces - but it's good to know that this isn't always the case, and needs to be asked of each condo.
While it's obvious, it's probably worth noting that in a condo, you don't get a yard, whereas in a SFH - there generally is. Condos have more "common ground", but that is a shared resource (pool, "business centers", "theater rooms", etc). Definitely trade-offs there that will be attractive to some, but not others.
Brian
Here's a laundry list of maintenance items going on within our household:
- Gutters, soffits, facia are 32 years old and in need of replacement. ~$8K
- Trees need trimming every 2 years @ $1200 per trimming
- The fence is falling apart. No idea what that will cost - hoping to do patch work as needed to get it through the next 2 years.
- Our windows are also 32 years old. Some of them won't stay open unless propped up.
- I mow the lawn every week for 8 months a year. If I didn't do this, it would cost $25/week at minimum.
- We have a sprinkler system that needs maint (and water usage)
- While our neighborhood only has a $50 per year HOA (voluntary even), we do not have a community pool.
Outside of that, a few other comparisons:
- homes in our neighborhood are going for $130/ft
- the condos I looked at ranged from $180/ft up to $310/ft on the upper floors with most of the options.
- we pay "residential" elec rates in our home. In the downtown condo I looked at, it is submetered at commercial rates. The largest condo that I looked at was 2100 sq ft and was on the corner, yet the most recent electric bill was $99. Our 2576 sq ft home had a bill for $225 in the same month.
Assuming we are comparing the same priced homes - and we'll use $130/ft for my neighborhood and $260/ft for the downtown condo - the mortgage expense is basically the same, so let's compare other items:
- Exterior maint for the house, broken into monthly payments = $50/month tree trimming + $100/mo lawn maint + $250/mo other ext maint (fence, roof, gutters, etc) = ball park of $400 per month (and no pool, to my wife's disappointment)
- Exterior maint for the condo - $390/month HOA dues on one of the units I looked at (1219 sq ft X $0.32/sq ft dues).
- Taxes would be the same since it's the same city and school taxes are close enough to consider it a wash
- Energy costs would be roughly 40% in the condo (not only is it more efficient from a heating/cooling perspective, I believe I was told hot water was included)
- Water costs would be cut in half in the condo - let's say $20/mo -vs- $40/mo
- Trash pickup is included in the condo's HOA fees - $20/mo to the home, $0 to the condo
- No idea on this one... insurance? Can someone fill me in. Is it more or less? Are you just insuring the contents, like in an apartment?
- In our particular situation, we would need to keep 2 cars, but the condo came with 2 parking spaces in their garage. The house had storage in the garage though - so one point to the home.
- Our entertainment driving would be cut by probably 70%, but would need to pay for public transit.
Ok, that's all I have at this point. Need to head to work. Please post your input.
How long has the HOA stayed at $390?
I have a condo in chicago and the HOA started at $471 4 years ago and its now up to $900. Not to mention a few "special assessments" along the way that covered things like sharing the costs to help get the HOA fund back into the black when other condo owners fell behind or abondoned their responsibilty due to foreclosure etc.
The condo HOA is very sensitive and important factor in your equation. It can sky rocket at any time and it is DUE upon notice. You can amortize the usual surprise costs that come with owning a single family home. You are more in control.
With a condo there are a lot of costs that can hit you that aren't in your control.
How much is emotional stress worth and your ability to deal with it? this would tip the scale in my decision.
The place is relatively new - 1200 Main street, The Metropolis. HOA dues are 32 cents per sq ft - so the $390 number I quoted was for the floorplan with 1219 sq ft.
Quote:
Originally Posted by rosscountry
I have a condo in chicago and the HOA started at $471 4 years ago and its now up to $900. Not to mention a few "special assessments" along the way that covered things like sharing the costs to help get the HOA fund back into the black when other condo owners fell behind or abondoned their responsibilty due to foreclosure etc.
The condo HOA is very sensitive and important factor in your equation. It can sky rocket at any time and it is DUE upon notice. You can amortize the usual surprise costs that come with owning a single family home. You are more in control.
Isn't increasing the HOA fee for repairs the same as having it increase for "other items" the same as amortizing? I know some folks that lived in a condo (stick built type) that needed a new roof and they just increased their HOA dues.
Quote:
Originally Posted by rosscountry
With a condo there are a lot of costs that can hit you that aren't in your control.
Whether you're in a condo of SFH - costs are obviously going to hit you. If the roof leaks, it has to be fixed. How is that in your control? I'm assuming you mean in a SFH that you get to call the roofer and schedule it and shop around for the best deal.
Quote:
Originally Posted by rosscountry
How much is emotional stress worth and your ability to deal with it? this would tip the scale in my decision.
There's stress with either option. Some folks might consider writing a larger check to the HOA less stressful than having to call a roofer, get multiple quotes and schedule the job (and babysit the job). Different strokes for different folks I guess.
The place is relatively new - 1200 Main street, The Metropolis. HOA dues are 32 cents per sq ft - so the $390 number I quoted was for the floorplan with 1219 sq ft.
Isn't increasing the HOA fee for repairs the same as having it increase for "other items" the same as amortizing? I know some folks that lived in a condo (stick built type) that needed a new roof and they just increased their HOA dues.
Whether you're in a condo of SFH - costs are obviously going to hit you. If the roof leaks, it has to be fixed. How is that in your control? I'm assuming you mean in a SFH that you get to call the roofer and schedule it and shop around for the best deal.
There's stress with either option. Some folks might consider writing a larger check to the HOA less stressful than having to call a roofer, get multiple quotes and schedule the job (and babysit the job). Different strokes for different folks I guess.
Brian
Condo costs vs sfm costs aren't even in the same hemisphere. A lot of people don't understand the costs of keeping an entire building up.
if it is a high rise for example. The cost of replacing 1 elevator cord(not the entire elevator) will run you 250K plus. A leak in a condo is not the same as a leak in your sfm either.
I agree different strokes for different folks. People should just know what they are getting into before they make a purchase and evaluate what the overall cost could be.
My opinion is based on experience with Chicago condos which is a much more expensive market than Dallas for some reason.
When I said that there are more factors out of your control in a condo than if you have a sfm I speak from a specific example of having to float someone elses HOA who couldn't pay just so the HOA funds wouldn't dry up.
Now thats $900 per month X 12. If you add more units to that mix that would be a pretty unexpected penny. Your chances of having to absorb that kind of cost in an SFM is extremely slim not to mention being forced to pay for someone else's inability to pay.
again just stating an opinion from experience. One of the few downsides to condo living.
^ Definitely good to share that experience. I really wanted to start this thread to not only help myself in the understanding of highrise condo living (as I see this being an option for my wife and I at some point down the road), along with helping everyone on this forum, since people seem to ask some questions here and there. We may be able to just reference this thread.
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