Condo or Single Family Home? (Chicago, Mark: apartment, foreclosures, to rent)

[kellyyouse]

My husband and I may be relocating to Chicago and I wanted to ask about condos vs. single family homes. I like the concept of condos with regards to maintenance, apartment-type living; minimal to zero outdoor upkeep. But I'm a little confused about condo fees and assessments. How exactly do these work, and what do they even mean?

Would anyone recommend a condo over a single family home or vice versa?

Thanks,
Kelly

[long101]

well in chicago you most likely going to be living in a condo type place unless you go to the out skirts. The assesment varies from association to association but usually covers garbage, snow removal, and maintenance. Some places the assesment does cover heat and electricity as well.

[oakparkdude]

Condo fees/assessments are monthly fees that you pay to the condo association to cover things like landscaping, maintenance of the common areas, salaries for doorman, etc. They are in addition to your mortgage and taxes. They are not deductible on your tax return unlike property taxes and mortgage interest. In the event of a major expense, such as replacement of the roof, your condo association may have to levy a special assessment if the association does not have enough funds in reserve.

A condo is good if you don't want to deal with a yard or doing maintenance on your own property. On the other hand you'll have people living above, below and beside you, and you may not have as much privacy. There will also be bylaws which will have varying degrees of restrictions on things you can do including playing loud music, putting things on your door, garbage disposal, etc. Its much more communal living.

[Kevin J]

Keep in mind that many in smaller condo buildings, the owners themselves do a lot of the upkeep work of the building, e.g. snow removal, landscaping, etc. This is generally done to keep expenditures to a mininum.

If you end up looking at condos, make sure you ask for the recent history of special assessments, especially for older buildings. If there haven't been any special assessments recently in an older building, that could mean, 1) that everything is in good repair and the building has been able to pay for upgrades through its savings, or 2) the building is in desperate need of repair, and you will be arriving just in time to help pay for it.

[JanuaryGirl]

I would suggest buying a book about purchasing condos specifically and reading through it before you even start looking; that way, you will know what questions to ask and how to navigate the system to find out info about the condo's finances and management you will want to know.

Also, beware of buying a condo that is a new development that hasn't sold all of the units yet. While you can often get a good deal by buying in early, until the units are sold that management of the building lies in the hands of the development company and they may or may not manage it well. I worked for a development company that didn't keep up with the maintainance/post construction punch lists (small fixes needed in units), as a result most owners stopped paying their assessments in protest, and they are going to be starting out without nearly enough reserve funds since the developer didn't keep after them for the assessments. This is bad for 2 reasons. 1) if something large needs repair, all the residents will be charged a special assessment out of the blue to fix it. 2) potential buyers are scared off because of the lack of reserve funds. Also, it is best to buy into a building where most units are owner-occupied as opposed to rented out. Owners are more likely to keep up maintenance and pay their assessments than renters, supposedly at least.

Assessments are going to be higher in a building with more amenities such as pool, work out area, etc. for both maintenance and insurance reasons.

Personally, I would MUCH rather live in a single family home. For what you save in assessments you can pay someone to mow your lawn, etc. and although you are responsible for upkeep at least it is in your control.

[via chicago]

Originally Posted by DNaomi

Personally, I would MUCH rather live in a single family home. For what you save in assessments you can pay someone to mow your lawn, etc. and although you are responsible for upkeep at least it is in your control.

Yea, but if you're young and single, a house dosent make a whole lot of sense.

[Lookout Kid]

And there is usually a pretty hefty price difference. You can find condos in Buena Park for under $300K, but the houses are all in the million dollar range. Most people in the city buy condos because it's what they can afford.

[Chicago60614]

Originally Posted by Kevin J

Keep in mind that many in smaller condo buildings, the owners themselves do a lot of the upkeep work of the building, e.g. snow removal, landscaping, etc. This is generally done to keep expenditures to a mininum.

If you end up looking at condos, make sure you ask for the recent history of special assessments, especially for older buildings. If there haven't been any special assessments recently in an older building, that could mean, 1) that everything is in good repair and the building has been able to pay for upgrades through its savings, or 2) the building is in desperate need of repair, and you will be arriving just in time to help pay for it.

This is the situation I'm in. Rehabbed the building 6 years ago, no troubles since, nothing in the works.

I pay $100 per month for assesssment, that pays building insurance, any maint. and landscaping and utilities for common area. We don't have any people we contract, the 12 units just pitch in together and take care of any small problems that come up with stuff broken. It's worked out perfect, and the association even has a few thousand extra saved up in case something happens that needs repair/replacement.

I found some condos when I was looking with assessments of up to $600 per month!!! I was very skeptical of only $100 a month, but I guess when you have a decent building and everyone agrees to pitch in, it's wonderful.

[Lookout Kid]

The assessments in my building are $330/month. This pays for the usual, but also includes heat, water, and digital cable. And my 23-unit building has $80,000 in reserves.

You can really get burned in a newer building that doesn't have reserves. Developers often set assessments artificially low to attract buyers, and then when they turn the buidling over to the association they find that they can build any reserves or fix anything. So, the assessments go up after a year or two of scraping by, and HUGE special assessments are needed to fix anything that goes wrong.

[David Hammond]

study this website!!!

Crib Chatter - Flips, Foreclosures, McMansions, New Condos: The Dish On the Chicago Housing Market

you might want to rent for a year or two.