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Not sure where to put this thread, but in doing 'research' on condos, I see a common theme that condos are a bad idea as an investment.
But what about if one wanted to purchase a condo solely to live in?
The reason why I ask is because I was recently renting and living in a condo unit, and it was one of the best places I've ever lived in. Very quiet, considerate neighbors, good and safe area, etc.
For the amount I was paying in rent, I could purchase such a unit and pay a lot less (with a good down payment minus the monthly HOA fees).
I can't afford a house, but I could afford a condo. Whether it increased in value or not over the long term isn't my primary concern.
One of the issues with them, that my in-laws had happen, is that certain expenses are not in your control. The condo board can vote in any number of expenses and raise the monthly rate to cover them and you just have to suck it up.
My in-laws lived in a golfing community and their fees went, in part, to the upkeep of the course. The board voted to gut 9 of the holes and restructure the course. This came with a 200% increase in their fees. They spent almost two years trying to sell the place, and when they did it was at a huge loss.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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If you only care about a place to live, a condo can be cost effective since you will still get back much or even more than your investment when you sell. They just don't appreciate as fast as a house. What will get you, though, is the HOA fees. With those you can end up paying way more than renting over time. Some condos are a great investment, if you buy it to rent out and use only for vacations. The rentals make you money while covering the mortgage. For example, in places like Hawaii or Lake Tahoe. You still need a place to live, though.
I love my condo, bought it on '93, intend to die here. Like you, I'm not concerned about rise in value, resale, etc. I'm lucky in that the board does work on keeping our fees reasonable. Luckily, our treasurer is a tightwad.
It's great for me because I'm not one to do yard maintenance or any other kind of exterior maintenance... the board handles that. I had my patio paved, any and all plants are potted, so no getting on my knees to weed, no lawn mower to haul out.
i lived in a condo for 10 years and it was fantastic. i think if you're planning on staying long term, it's a great investment. also, my HOA fees were $260 and covered water/sewage/garbage. that probably would cost $150 in a house. considering that and the fact they cover all outdoor maintenance and pool, i thought it was a good deal.
Like all things it depends. A condo in the city here goes up in value faster than a SFH in the suburbs (well, most suburbs at least). Real estate investment is a tricky game and I suspect most people should focus on a place to live rather than thinking of their home as an investment.
A condo in once circumstanc is a particularly great investment. If you are buying a second home or vacation property in a flood zone.
Single family non-primary homeowners in a flood zone pay very high flood insurance. In the condo you are under the Associaton policy for most flood related damage. Usually not contents. But that could save you 2-5k a year.
It will depend. Some projects will not qualify for 'secondary loan sale' (very high rental occupancy, no viable HOA, etc) which can complicate both the purchase and resale.
Yes, the HOA can really affect the marketability of a unit.
Just do your research, and that means get a historical sales run of homes in the development as well as listings, and be sure to look at withdrawals as well.
One of the issues with them, that my in-laws had happen, is that certain expenses are not in your control.The condo board can vote in any number of expenses and raise the monthly rate to cover them and you just have to suck it up.
My in-laws lived in a golfing community and their fees went, in part, to the upkeep of the course. The board voted to gut 9 of the holes and restructure the course. This came with a 200% increase in their fees. They spent almost two years trying to sell the place, and when they did it was at a huge loss.
And therein lies the rub. Thus your your condo payment ends up being a roll of the dice. Since many people are on a limited income, that can be an issue, whether they plan on reselling the unit in the future or not.
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