Triple Decker Condos NOT a good buy (Boston, Cambridge: mortgage, houses)

[MikePRU]

Originally Posted by timberline742

I'm in a 12 unit association. All owner occupied. I'd like to think the numbers will prevent some crazy things happening, but we'll see.

Depends on who your neighbors are. If you live among people who want to care for the property the same way you do then likely you'll be happy there. If not well . . .

In some associations, keeping the fee as low as possible is the #1 priority. In others, the priority is keeping the property up as well as possible. You can't have both.

Originally Posted by Boston_Burbs

Yea my big concern with these is that they are usually structures that were flipped from multi families and built in the early 1900s. You can get yourselves into a lot of trouble with older buildings and if one or two owners don't understand what is necessary to upkeep.

Absolutely. This is why you need to take a close look at the condo docs before buying. It allows you to see how the association is caring for the property, what they're doing, and what they're planning for. So, you can see if their attitude is a good fit for yours.

Originally Posted by Cabound1

I wonder if any condos are a good buy at this point.

Let's say you had to decide between buying or renting an average condo in back bay (a decision I will probably be facing soon). I don't get caught up much in the lifestyle differences, but the financial implications concern me.

Assume I will also be paying cash for the condo (long story.....). I just don't see where paying $1000/sq ft and getting (hopefully) a 4% annual appreciation, and saving the rent payment, is enough to offset the lost opportunity cost of investing that money elsewhere. Then factor in property taxes and Hoa fees and other maintenance costs, and it's hard to believe owning a condo is a good use my money. I think renting makes more financial sense.

First, I don't think you can completely ignore all the non-monetary benefits of ownership. Second, when you add up your cost of ownership will the equivalent lease payment get you the same type of home kept up in the same manner that you would keep up your own home? I generally find that the equivalent lease payment gets you less home for your money.

[johngolf]

I have an In-law that does condo rehabs in the Boston area. Last one in Dorchester. Bought a two family for $900K. Took one year and $300K to turn it into a 3 condo building. Sold each condo for $500K.

There are horror stories about someone gaining control of a small condo association such as family members buying units and the family ends up controlling like owning 3 of the 5 units. You will be at their mercy. If they want an old on end bathtub with a statue of the Virgin Mary in it, so be it.....LOL

[inquisitive2]

Originally Posted by sawyer2

I would expect the opposite and that the majority of people realize this ..... common sense and written right in your condo docs



I have owned in several smaller buildings and never encountered this or heard of it anecdotally from others. Not sure why an outside company, who is now an investor, would run up condo fees unnecessarily as it hits the bottom line. My experience is the opposite - investor (vs residential owners) are more liable to balk at significant $ improvements and the associated assessments and increased condo fees unless absolutely essential.

Investors raise the condo fees in order to encourage owners to sell cheap. They then hold units for
some time, update them if necessary and resell at profit. In other instances they rent out the units
And hold onto them-with long term profit in mind.

[Cabound1]

I doubt I would qualify for a mortgage. That's why I think renting would be better.

[Cabound1]

Mike, I would agree with you if we were talking about single family homes. But condo and apt living are similar.... lots of sharing. And I hate the idea of sharing financial decisions with anyone.

[timberline742]

Originally Posted by MikePRU

Depends on who your neighbors are. If you live among people who want to care for the property the same way you do then likely you'll be happy there. If not well . . .

In some associations, keeping the fee as low as possible is the #1 priority. In others, the priority is keeping the property up as well as possible. You can't have both. .

Apparently, doing both is exactly what we're trying to do, and I understand how and why and agree with it, but apparently this is called "rhode island accounting" and best talked about through PM. Haha.

[sawyer2]

Originally Posted by inquisitive2

Investors raise the condo fees in order to encourage owners to sell cheap. They then hold units for
some time, update them if necessary and resell at profit. In other instances they rent out the units
And hold onto them-with long term profit in mind.

Amazing how unscrupulous some people can be - found this from 2014 describing exactly what you said (occurring in Boston). Wonder how common/prevalent it is - hopefully less now that foreclosures have abated.

'Condo Takeover Schemes' Can Pose New Foreclosure Threat - NBC News

[semiurbanite]

Originally Posted by BostonMike7

Pretty much.


My family owns a multi in Somerville built in the 1890's, and under all that fresh paint, and modern looking appliances, are some old bones that need some serious, expensive, upkeep. .

That's interesting, i have an 1890s Somerville house and the old bones are the most reliable part of the house. It's the newer stuff that doesn't seem to last as long. The 120 year old baseboards are so solid they have almost no dents or dings, the new ones installed 3 years ago are in worse shape. The beams in the basement are so solid I can barely get a drill into the wood.

[thenewtexan]

If there's a high percentage of owner occupied condos, they're fine.

[massnative71]

Originally Posted by MikePRU

In some associations, keeping the fee as low as possible is the #1 priority. In others, the priority is keeping the property up as well as possible. You can't have both.

Not necessarily. There needs to be a balance there. A good association strives to be well managed and efficient, keeping operating cost down (while not neglecting regular and preventative maintenance) and at the same time maintaining a healthy reserve fund for future needs. Some fail to do this. Come time they need a new roof for $100,000+ and no reserves in the bank to pay for it, what do they do but jack up the fees (or add special assessments). That is the reason some have insanely high fees.