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Old 09-29-2009, 06:21 PM
 
Location: Dallas
6 posts, read 26,289 times
Reputation: 12

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Here is the situation. I am currently renting and have a roomate and have extra pocket change in the bank. I pay around 720 a month in rent in the uptown area.

I am looking to stay in the area (mid 20s, single, like the night life) so I am looking to invest in a condo. My price range is in the lower 200s, my current roomate will be living with me at my new place (and even if he moves I plan on having a roomate) so it will be 2br 2 bath at least. I have easily enough to put at least 20% down.

I have looked at some places but the HOA fees worry me a little and so does the property tax around here. In fact on a recent estimate they but they estimated taxes were around 700 a month total (county, special, school, yeouch.....).

So my question is should I even bother with buying a condo? With the taxes so high it does not seem worth it. I have looked at quite a few places. Thanks for any information.
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Old 09-29-2009, 08:01 PM
 
4,604 posts, read 7,902,984 times
Reputation: 1266
Yeah, ownership is gonna cost you, aside from principal and interest there's those pesky HOA fees, taxes, holes in the walls, doing what you want to do with the place.

You'll get some break on taxes in April but those HOA fees aren't gonna do much for you other than keep the property lights on and the grass mowed. And those occasional assessments for improvements. If you do purchase then commit yourself to attend board meetings at election time and get on that board if possible.

The reason to buy that condo? Personal satisfaction. Knowing your name is on the owner's line. Knowing you can change the place short of making structural modifications. Knowing you don't have to give that rent check to some condescending bimbo who treats you like it's her money. You can change the locks on the door without having to ask. Be sure to use KwikSet SmartKey.

Of course, you're going to have to live there a while to get your money back if you find a need to move but if you like where you live and stay a long ole time, the rent isn't going to go up. Be sure to get a good view, one you're going to want for a good while, not just to satisfy a quick visual.

Good luck, enjoy.
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Old 09-29-2009, 11:21 PM
 
13,111 posts, read 26,470,698 times
Reputation: 12978
As someone who owns a condo in that area, some things to think about:

- The condo market is less flexible & more volatile than the single family home market. Sales in the Oak Lawn area (including all of Uptown & Turtle Creek) are down 30-60% to LY in the past few quarters- not sales prices, but number of transactions. It is currently difficult to close a condo loan (not impossible, just takes a lot of patience) because of the low number of comp recent solds.

-How many years can you commit to owning this property? If it's under 5 years, I would pass. Condos do not see the rapid appreciation that other close-in neighborhoods have seen in the sfh market because very little of your condo's value is in the raw land. Land value is what appreciates, not the home structure. If you can't commit to 5 years in a $200k property, you may break even when you sell- or clear less than you put down after paying closing costs and realtor fees.

- Do your homework! The uptown building boom from 2004-2008/9 resulted in a lot of shoddy construction going up quickly (see the high rise at Travis & Knox as one example). The original townhomes built by City Homes in the late 1990s / early 2000's are far & away the best quality construction (outside the high end, architect designed homes).

- Taxes. Tax rate is roughly .23, or $2,300 per $100,000 of value. Taxes on a condo valued at $200k would be about $4.5-4.8, not anywhere close to $7k

- HOA. Do your research on the HOA's financial reserves (cash on hand for repairs). Have an attorney who is well versed in HOAs comb through their documents to make sure it is a stable association. Many of the highrises (from the new high end Vendome to the older mid-century 21 and Turtle Creek North buildings) have seen assessments of $20-$50k per unit in the past year for upgrades & renovations. Do you have enough liquid cash to pay for an assessment? They are less brutal in small complexes, but always a possibility!

- lastly, you are ready to buy ONLY if you meet all of the following criteria:
1. Do you max out your 401k and IRA contributions?
2. Do you have minimum 20% down payment saved?
3. Do you have zero credit card debt?
4. Do you have 6-12 months of living expenses saved in a liquid account? What if you lose your job or have a medical emergency? Can you continue to pay your mortgage for an extended amount of time?
5. Do you have additional cash savings to paint, furnish, and remodel your new condo to your taste?

Honestly, condos are great if you need a low-maintenance place to live or if you travel a lot & need conceirge to receive packages, etc while you are gone.

If I were you, I would take a hard look at buying a duplex (north Oak Lawn streets like Hawthorne, Prescott or in East Dallas on LaVista or Oram) becUse you can generate rental income from the other unit, plus realize much more land value appreciation over a shorter time.
Or wait a few more years and look at houses in M Streets, Lakewood, Cochran Heights, Devonshire, Briarwood, or Lake Highland.

Take this advice from someone whose family has 100+ years of combined experience in the Dallas residential real estate market.
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Old 09-30-2009, 06:23 PM
 
Location: Dallas
6 posts, read 26,289 times
Reputation: 12
Well to answer a few questions

Plan on owning at least 3 years (for tax credit reasons), dont know if its gonna be 5 years though

Most condos I have looked were built in the 80s

Took a look at some of the HOA financial reserves, I dont know exactly what I good amount is but its not empty

And
1. Maxed out Roth IRA for year, and Max company 401k contribution ( they match half up to 8%)
2. Yes I do
3. No debt
4. Yep
5. Yes but that is obviously something that is done over time. My roomate pretty much owns everything atm.

Quote:
Originally Posted by TurtleCreek80 View Post
As someone who owns a condo in that area, some things to think about:

- The condo market is less flexible & more volatile than the single family home market. Sales in the Oak Lawn area (including all of Uptown & Turtle Creek) are down 30-60% to LY in the past few quarters- not sales prices, but number of transactions. It is currently difficult to close a condo loan (not impossible, just takes a lot of patience) because of the low number of comp recent solds.

-How many years can you commit to owning this property? If it's under 5 years, I would pass. Condos do not see the rapid appreciation that other close-in neighborhoods have seen in the sfh market because very little of your condo's value is in the raw land. Land value is what appreciates, not the home structure. If you can't commit to 5 years in a $200k property, you may break even when you sell- or clear less than you put down after paying closing costs and realtor fees.

- Do your homework! The uptown building boom from 2004-2008/9 resulted in a lot of shoddy construction going up quickly (see the high rise at Travis & Knox as one example). The original townhomes built by City Homes in the late 1990s / early 2000's are far & away the best quality construction (outside the high end, architect designed homes).

- Taxes. Tax rate is roughly .23, or $2,300 per $100,000 of value. Taxes on a condo valued at $200k would be about $4.5-4.8, not anywhere close to $7k

- HOA. Do your research on the HOA's financial reserves (cash on hand for repairs). Have an attorney who is well versed in HOAs comb through their documents to make sure it is a stable association. Many of the highrises (from the new high end Vendome to the older mid-century 21 and Turtle Creek North buildings) have seen assessments of $20-$50k per unit in the past year for upgrades & renovations. Do you have enough liquid cash to pay for an assessment? They are less brutal in small complexes, but always a possibility!

- lastly, you are ready to buy ONLY if you meet all of the following criteria:
1. Do you max out your 401k and IRA contributions?
2. Do you have minimum 20% down payment saved?
3. Do you have zero credit card debt?
4. Do you have 6-12 months of living expenses saved in a liquid account? What if you lose your job or have a medical emergency? Can you continue to pay your mortgage for an extended amount of time?
5. Do you have additional cash savings to paint, furnish, and remodel your new condo to your taste?

Honestly, condos are great if you need a low-maintenance place to live or if you travel a lot & need conceirge to receive packages, etc while you are gone.

If I were you, I would take a hard look at buying a duplex (north Oak Lawn streets like Hawthorne, Prescott or in East Dallas on LaVista or Oram) becUse you can generate rental income from the other unit, plus realize much more land value appreciation over a shorter time.
Or wait a few more years and look at houses in M Streets, Lakewood, Cochran Heights, Devonshire, Briarwood, or Lake Highland.

Take this advice from someone whose family has 100+ years of combined experience in the Dallas residential real estate market.
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Old 09-30-2009, 07:28 PM
 
16,087 posts, read 39,597,705 times
Reputation: 6354
Quote:
Originally Posted by TurtleCreek80 View Post
As someone who owns a condo in that area, some things to think about:

- The condo market is less flexible & more volatile than the single family home market. Sales in the Oak Lawn area (including all of Uptown & Turtle Creek) are down 30-60% to LY in the past few quarters- not sales prices, but number of transactions. It is currently difficult to close a condo loan (not impossible, just takes a lot of patience) because of the low number of comp recent solds.

-How many years can you commit to owning this property? If it's under 5 years, I would pass. Condos do not see the rapid appreciation that other close-in neighborhoods have seen in the sfh market because very little of your condo's value is in the raw land. Land value is what appreciates, not the home structure. If you can't commit to 5 years in a $200k property, you may break even when you sell- or clear less than you put down after paying closing costs and realtor fees.

- Do your homework! The uptown building boom from 2004-2008/9 resulted in a lot of shoddy construction going up quickly (see the high rise at Travis & Knox as one example). The original townhomes built by City Homes in the late 1990s / early 2000's are far & away the best quality construction (outside the high end, architect designed homes).

- Taxes. Tax rate is roughly .23, or $2,300 per $100,000 of value. Taxes on a condo valued at $200k would be about $4.5-4.8, not anywhere close to $7k

- HOA. Do your research on the HOA's financial reserves (cash on hand for repairs). Have an attorney who is well versed in HOAs comb through their documents to make sure it is a stable association. Many of the highrises (from the new high end Vendome to the older mid-century 21 and Turtle Creek North buildings) have seen assessments of $20-$50k per unit in the past year for upgrades & renovations. Do you have enough liquid cash to pay for an assessment? They are less brutal in small complexes, but always a possibility!

- lastly, you are ready to buy ONLY if you meet all of the following criteria:
1. Do you max out your 401k and IRA contributions?
2. Do you have minimum 20% down payment saved?
3. Do you have zero credit card debt?
4. Do you have 6-12 months of living expenses saved in a liquid account? What if you lose your job or have a medical emergency? Can you continue to pay your mortgage for an extended amount of time?
5. Do you have additional cash savings to paint, furnish, and remodel your new condo to your taste?

Honestly, condos are great if you need a low-maintenance place to live or if you travel a lot & need conceirge to receive packages, etc while you are gone.

If I were you, I would take a hard look at buying a duplex (north Oak Lawn streets like Hawthorne, Prescott or in East Dallas on LaVista or Oram) becUse you can generate rental income from the other unit, plus realize much more land value appreciation over a shorter time.
Or wait a few more years and look at houses in M Streets, Lakewood, Cochran Heights, Devonshire, Briarwood, or Lake Highland.

Take this advice from someone whose family has 100+ years of combined experience in the Dallas residential real estate market.
Excellent extensive advice...

I've heard the siren call of the high-rise condo but I shall pass. I would first rent one to see how I would really like it...however, a hotel-linked condo with room service is enticing.

I think the only place I would buy now would be the classic 3525 Turtle Creek, Dallas High-rise Living if you can get a good deal and a view.

For a townhouse, I would wait until some of these things shake out - there are going to be buying opportunities for a long time IMO.
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Old 09-30-2009, 07:38 PM
 
Location: Dallas
6 posts, read 26,289 times
Reputation: 12
They just had a bunch of issues with the plumbing there and the HOA fees are very high atm.

Quote:
Originally Posted by Lakewooder View Post
Excellent extensive advice...

I've heard the siren call of the high-rise condo but I shall pass. I would first rent one to see how I would really like it...however, a hotel-linked condo with room service is enticing.

I think the only place I would buy now would be the classic 3525 Turtle Creek, Dallas High-rise Living if you can get a good deal and a view.

For a townhouse, I would wait until some of these things shake out - there are going to be buying opportunities for a long time IMO.
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Old 09-30-2009, 08:01 PM
 
16,087 posts, read 39,597,705 times
Reputation: 6354
Did not know that..but I have been in a few and I like them plus I am classic movie fan and Greer Garson lived there...she was down the hall from my late father at Presbyterian Hospital in their last weeks of living. So maybe I'm not so logical on that one! However, I have seen some advertised which seemed to be good deals.

Of course there have been all sorts of rumors about Vendome and it's nearly new (relatively speaking).
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