Rents on the rise as home prices slip - La Times Article

[KnoxTown]

Originally Posted by greggd

Condos are like apartments, you have to live with other people and tolerate people and things they do or dont do.

Condominium ownership can be great living and are an excellent start to real estate ownership. I think they will become more and more prevelant in Los Angeles as prices continue to increase. No yardwork, maintenance, or worries if you go out of town, generally low expenses and less restrictive pricewise than a traditional single family home.

So you are saying that a condo would be a good investment for someone in my situation?

[greggd]

Originally Posted by KnoxTown

So you are saying that a condo would be a good investment for someone in my situation?

Depends on where you plan on living, working etc. I would not suggest you buy anything until you become familiar with the area and your needs.

If your moving out here, rent an apartment for a year or two and learn about the different areas. You will then be able to make an informed decision as to which neighborhood will be the best investment for you.

1-2 years from now will also be during the times where many mortgages will be resetting and people like desertdawg will be flying low looking for fresh meat. You may have a softer market and larger inventory to choose from depending on area.

[KnoxTown]

Originally Posted by greggd

Depends on where you plan on living, working etc. I would not suggest you buy anything until you become familiar with the area and your needs.

If your moving out here, rent an apartment for a year or two and learn about the different areas. You will then be able to make an informed decision as to which neighborhood will be the best investment for you.

1-2 years from now will also be during the times where many mortgages will be resetting and people like desertdawg will be flying low looking for fresh meat. You may have a softer market and larger inventory to choose from depending on area.

That sounds good. I was planning to rent for at least a year, just to get used to the areas.

[Sorcerer68]

People often end up liking a completely different area than they thought they would. Renting first is wise.

[KnoxTown]

Originally Posted by Sorcerer68

People often end up liking a completely different area than they thought they would. Renting first is wise.

Most likely Ill be renting in Long Beach or Pasadena. The other beach areas get a little pricey for rentals.

I'm pretty sure I wont want to stay in those places in the long run.

[motoman]

Originally Posted by prim2007

I don't disagree that some good deals are still to come (depends on the location) but what I'm complexed about is the $3K per month on a $450K loan. Are you factoring in insurance, taxes, and utilities to get this amount? I guess my interest rate is better than I thought and I should be grateful for small things giving the depressing times we now live in.

A $450,000, 30-year, fixed rate loan, at 6.5%, is $2,844 per month. Property taxes will be at least $4,500 per year, or another $375 per month. As a rental property, you'll need to figure in at least 1% of the value of the property annually in maintenance costs, which is another $375 per month. I don't know what insurance is in the LA area.

Mortgage = $2,844
Taxes = $375
Maintenance = $375
Total = $3,594 per month

What kind of mortgage do you have that you're paying less than this every month? Is your mortgage actually $450,000 or did you put money down? To have a $2,500 payment on a $450,000 mortgage, your interest rate would need to be 5.3%. If your mortgage is $450,000 and your interest rate is not 5.3% or lower, then you're in a negative amortization loan and you now owe more than what you paid for the place.

[motoman]

Originally Posted by KnoxTown

How does condo buying work? Is the down payment just a standard percentage of total? I'm asking bc I am moving to LA in the spring after graduation, and hate renting. Paying money toward nothing is dumb; did it through school and would like to look into buying. What would be the best choice for me? I know ill have to rent for awhile, but im thinking a year or two.

The biggest problem with condos are the home owners' association dues, which can be substantial. You need to figure that into your total monthly cost.

For example, I know a guy that bought a condo in Miami. Paid $300,000 or something for it. His HOA fees are $700 per month. That $700 per month is the equivalent to financing $110,000. He could have bought a $410,000 place and been the same off financially, other than a little higher property taxes and insurance.

[motoman]

Originally Posted by DaBeez

The only places that are good to buy right now are Downtown LA lofts and Woodland Hills. Downtown is definately up and coming and Woodland Hills will soon have a Grove type outdoor mall/shopping that will connect Westfield in Canoga Park with the Woodland Hills plaza along Topanga Canyon.

If you make a six figure income you can afford to buy a 600 sq. ft. condo in downtown. How is that a good deal?

[motoman]

Originally Posted by Atlantasfinest

Very interesting article in the LaTimes... As a condo owner (Fox Hills/Culver City, purchased in the early 90's & deeded to me) who's not looking to sell I don't mind the housing slump because I have a plethora of renters and can charge what I want. But to others who are looking to rent and people who are lookign to seel in overbuilt places like the IE and other outyling areas I'm sure they are hurting.

Rents on the rise as home prices slip - Los Angeles Times

That's interesting. The average rent is over $1,600 per month in LA, which means you have to make about $60,000 per year to afford it. That's above the median income. That means rents have pretty much topped out.