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We own a condo (small 12 units only) and it is also well underfunded. I am on the board. The unit owners want it this way. They prefer special assessments.
Not to be rude, but that is extremely stupid. I'd rather have expenses I can plan for than be hit with random special assessments on things that I was told were covered when I purchased this place.
Quote:
Originally Posted by craigiri
Houses are expensive. They are not investments.
Tell that to my brother and sister in law. They sold their house last year and profited almost $150,000. Sounds like a good investment to me. If I were paying rent for a place similar to this, my total monthly payments would be $500 more per month. So even with the assessment, it is better than renting.
Easy for me to say, but if I were you I'd comply but put the condo on the market, buy a small single family home or townhouse with no HOA, and when all the dust settles (it may take a while) open a savings or checking account to use as a home maintenance/home improvement fund. Build it up and keep a minimum balance in there. You'll be paying yourself instead of an HOA and can fix up and maintain your home as you're able to, or when emergencies arise.
Our dream for retirement was a condo on the lake. Well, one thing led to another and we wound up buying a small, plain, one-story ranch house on a half acre for next to nothing because it was a long-vacant HUD foreclosure. Best decision we ever made. We put on a new roof, replumbed and rewired all for less than what you're paying for your condo roof. Condos are officially off our dream list. More and more, they sound like a nightmare. It's like a box of chocolates; you never know what you're going to get.
Easy for me to say, but if I were you I'd comply but put the condo on the market, buy a small single family home or townhouse with no HOA, and when all the dust settles (it may take a while) open a savings or checking account to use as a home maintenance/home improvement fund. Build it up and keep a minimum balance in there. You'll be paying yourself instead of an HOA and can fix up and maintain your home as you're able to, or when emergencies arise.
Our dream for retirement was a condo on the lake. Well, one thing led to another and we wound up buying a small, plain, one-story ranch house on a half acre for next to nothing because it was a long-vacant HUD foreclosure. Best decision we ever made. We put on a new roof, replumbed and rewired all for less than what you're paying for your condo roof. Condos are officially off our dream list. More and more, they sound like a nightmare. It's like a box of chocolates; you never know what you're going to get.
That's what we're thinking of doing. I'm hoping to kill this project for a few years so I don't have to move for a little while. Hopefully I can at least enjoy some of the improvements I made for a couple years before selling and have time to get my finances and life in order.
We have already starting talking to neighbors who are against this. One neighbor searched the bylaws and found out they cannot do a special assessment of more than $300 without a 2/3 majority vote.
We are going to fight this as best we can, just looking for the most effective way.
That's what we're thinking of doing. I'm hoping to kill this project for a few years so I don't have to move for a little while. Hopefully I can at least enjoy some of the improvements I made for a couple years before selling and have time to get my finances and life in order.
We have already starting talking to neighbors who are against this. One neighbor searched the bylaws and found out they cannot do a special assessment of more than $300 without a 2/3 majority vote.
We are going to fight this as best we can, just looking for the most effective way.
Sounds like a good plan. Strength in numbers. Best of luck!
So here’s the thing, if the condos need new siding and the owners don’t approve it then your values will go down for not maintaining the property. So you want to maintain! In the case of a “special assessment’” that high, since you are in Illinois you can put in a Loss Assessment” claim with your condo insurance. This however is optional coverage but unless you have an idiot for an insurance agent they SHOULD have recommended this coverage to you! You can call to ask! Loss Assessment coverage will cover this exact circumstance when an HOA requires a huge special assessment to maintain a common area.
Not to be rude, but that is extremely stupid. I'd rather have expenses I can plan for than be hit with random special assessments on things that I was told were covered when I purchased this place.
Tell that to my brother and sister in law. They sold their house last year and profited almost $150,000. Sounds like a good investment to me. If I were paying rent for a place similar to this, my total monthly payments would be $500 more per month. So even with the assessment, it is better than renting.
1. People are selfish. They'd rather fool themselves and have someone in the future pay their bills. Their reasoning is that if condo fees are lower, units will sell faster and easier. I don't agree and I support raising the condo fees big time. But I am outvoted.
But this is a truism in all thing. The couple with two kids living in a house....going to a local school - ask them to pay $24,000 in property taxes just for the schools (plus plus plus) and they will think you are crazy. They want others to pay for them....and then, when the kids are out of school, they will move so they don't have to pay those "high" taxes (that don't pay their way).
Such is the way of the world.
2. Anecdote is not fact. Schiller studied the housing market since 1850 and the return has been lower than any other investment....about 1% or so.
I know someone who won the lottery for 1/2 million. Twice. Seriously.
Owning vs. renting is more a matter of your "freedom" (in non-HOA) to futz around with your house and not deal with a landlord. It can be a forced low-return investment.....that is, you have your money tied up so you likely won't spend it (although the great recession and home equity loans proved otherwise)....
In any case, making money on real estate is much harder these days....what with tax rates, etc.
Some of our luxury condos are rented out for about 2K or 2200 per month.
The cost of the condos are about 450 now....so roughly:
22,500 interest or money cost per year
5,000 property taxes
7,000 condo fees and access.
2,000 per year for misc repairs, repaint, HVAC etc. that owner has to figure on.
--------------
36,500/12 = over 3K per month.
Renting, as you see, is quite a bit cheaper. Sure, that's one example but as Shiller (the #1 housing expert in the USA) has worked out, by and large owning housing is not a winning proposition.
Note - I own 3 houses....because I want to live in them. None of them will "make me money". In fact, I will lose a lot of money when all is said and done. Sure, like you "I know people" who made money on real estate.
Easy for me to say, but if I were you I'd comply but put the condo on the market, buy a small single family home or townhouse with no HOA, and when all the dust settles (it may take a while) open a savings or checking account to use as a home maintenance/home improvement fund. Build it up and keep a minimum balance in there. You'll be paying yourself instead of an HOA and can fix up and maintain your home as you're able to, or when emergencies arise.
Our dream for retirement was a condo on the lake. Well, one thing led to another and we wound up buying a small, plain, one-story ranch house on a half acre for next to nothing because it was a long-vacant HUD foreclosure. Best decision we ever made. We put on a new roof, replumbed and rewired all for less than what you're paying for your condo roof. Condos are officially off our dream list. More and more, they sound like a nightmare. It's like a box of chocolates; you never know what you're going to get.
Yepper, that is what I would do.
When we were house hunting, we walked away from a couple of places because of the HOA or too many CCRs.
The place we bought and currently live in has very few CCRs, and no HOA to enforce them. It works for us.
Location: Was Midvalley Oregon; Now Eastside Seattle area
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OP: it would seem to me that delaying necessary repair and maintenance would just make future repairs and maintenance more costly, certainly a real risk in a known problem area. Accusing the HB of incompetence now and forcing a delay would make the HB further incompetent. I suggest you sell and move. Do your due diligence prior to closing.
My brother question the wisdom of repairing my mother's home when I was caring for her. She was a little over 90 at the time. I told him that the corner was leaking, dry rotted and that the corner was endanger of collapsing. The corner and that portion of the house was cantilevered out by 5feet. He was not in favor of this. But odd that his wife is the HO president for the past 30 years and is always proactive and makes this NYC co-op building a desired residence.
We bought a condo 10 months ago. We have 14 monthly HOA assessments. The extra months has been imposed for the last 2 years prior to our purchase. Why because maintenance on the elevator is needed. Recently the elevator has made grinding noises (broken grease seals) and does not properly line up with the floor. This is normal according to the elevator people and will be OK until the service date in 2019. We would not have bought this condo if this HB is not proactive in maintenance.
I'm with Craigiri. We also have 2 rentals; Another condo and a new townhouse. Our ROI is but 3-4% and with risk. We could have made more money in a balanced stock portfolio. Our rents are on the lower side for the area because we are not as leveraged as are some rental owners. In the Seattle area, renting is becoming cheaper than owning.
Last edited by leastprime; 08-12-2018 at 01:26 AM..
OP: it would seem to me that delaying necessary repair and maintenance would just make future repairs and maintenance more costly, certainly a real risk in a known problem area. Accusing the HB of incompetence now and forcing a delay would make the HB further incompetent. I suggest you sell and move. Do your due diligence prior to closing.
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That's the problem. I'm not sure it is necessary right now. If there were actual report damages/problems of course I'd want/have to fix it. I need to see the report and they are withholding that from us. The board president could only name 3 units in the past couple years that had any problems, all of which they spent the money and fixed already.
The board president is an interior decorator (with, rumor has it, a nice alimony settlement from her ex husband) and talks excitedly about the new colors and styles we will get for the buildings. The other board members keep talking about how our community "looks like crap" and they are also excited about visual elements.
Also, apparently a few years ago they decided to go ahead and redo the front garages which are all wood. So that part of the building is basically brand new. They want to tear it out now and reside it. The money management is just terrible.
Our community is a mix of mostly young families starting out and retirees without much money. It is definitely more of a nice blue collar community. Condos range from $135-$175K. The amount of money being spent on this doesn't seem to fit the price range of the community.
The board members seem to be the financial elite of the community. Our board president drives a Lexus and the other members either have no kids and dual income households or are retirees with good pensions. They can all afford it and want the cosmetic upgrades. Many of the other people like me simply cannot.
Some neighbors think they are getting some sort of kick back, but I won't go that far to accuse anyone of that without solid evidence.
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