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No question that some of the HOA fees have to be considered an expense that you can't get back. Some of the HOA fee, though, goes towards reserves and maintenance that one would have paid for in a SFH anyway, like home improvement savings, landscaper/garderner, gym membership, etc. Plus, weekly housekeeping services for a 1500 sq ft condo is much cheaper than services for a larger SFH. Just some things to consider.
Location, location, location, there are only so many condos on the water or with a nice water view, those I have seen appreciate, as do high end condos, the over 55 senior condos seem to stagnate due to the age an owner must be to own, that takes out a large group of people who might be buyers who are under 55.
Just as an example, right now there are a few buildings going up in the Las Olas area that are selling for around $650 a sq foot, what do you suppose that will do to the many high end buildings in the area which are selling for around half of that, I suspect they will go up substantially since those who wish to live in that area may buy second hand verses new, which should drive up the price of the second hand units. Of course the new buildings could end up a flop and that would drive all prices down as what happened with Tao in Sawgrass, they started out with big dreams of $600,000 and up and are now around half to a third of what they were supposed to originally sell for but again, location and view is everything, Tao has no view except a muddy lake and location is decent but who wants to live on the edge of a shopping center.
I think the HOAs can be very expensive. In some places in LA, HOAs can be $400-$500 on a $600k condo. You can refinance a mortgage but you can't refinance HOAs fee.
A 1300 sf condo in Park City that I used to own has an HOA of $575/month. (I sold it in the fall of '16)
My daughter's 1800 sf condo in Las Vegas has an HOA of $1700/month
A friend has a larger condo -- about 6500 sf. His HOA is $4,000/month.
With a condo, you are dependent on the condo association taking care of the roof, exterior cladding, common facilities and common areas. If there is not enough money set aside for that, the place will fall apart and there is little an individual condo owner can do. The same thing happens if most of the condos become rentals and/or are not well cared for. When there are too many rentals it is often hard for a new buyer to find a mortgage, and you get stuck with it not selling. So, the only problem is that so much of the potential value of the entire property is taken out of your hands, and if things go downhill there is little you can do. But I would also imagine well run and probably expensive condos in highly desirable locations would be able to appreciate.
insinuating that compared to a single family home, a condo is simply not a good investment.
Point 1: Condo is a form of ownership... NOT a construction style/method.
Quote:
Considering that homes aren't necessarily good investments either...
Point 2: BUYING or renting (anything/anywhere) should be about YOU.
If the property and financials meet YOUR needs YOUR stability YOUR preferences
then either renting or buying can make perfect sense.
Generally though... having another entity involved between you and the Bank (or landlord)
will rarely benefit the buyer or the renter (or the landlord ftm).
I think it's it's all about timing and location. 25 years ago me and the wife looked at a condo in downtown Tacoma for about 65 k. We got a house instead. Not quite 8 years later in was on the market again for 170k.
I still kick myself over that considering how things turned out.
I think it's it's all about timing and location. 25 years ago me and the wife looked at a condo in downtown Tacoma for about 65 k. We got a house instead. Not quite 8 years later in was on the market again for 170k.
I still kick myself over that considering how things turned out.
Where I live if I did it properly I probably could have retired by now purchasing a few condos and renting them out. And I'm just turning 45, which is disappointing.
There are some who built up tons of equity and then purchasing a house later. No way the market could have made that kind of returns. Again, location.
We have never owned a condo. We have never been in a HOA. We have known a lot of people who were in HOAs and condos, their horror stories have been more than enough to keep us away from both.
Appreciation; I am not sure if anything honestly appreciates better than anything else. There are always exceptions. The hope of appreciation has never been a factor with us when we have bought homes.
Like anything, it all depends upon a lot of factors.
Of the five homes I have owned and sold I made way more on the condo than any of the SFHs.
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