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Were these the co-ops you were looking at? Because I pay $310 and it includes all utilities and the maintenance work.
It was a co-op. Tibor Island or Harbour Square. Both had HOA fees exceeding $500/month. I'm not willing to pay that. If you know of a place in SW that doesn't have co-op fees THAT high (and allows a cat) let me know! River Park is in my price range but pets are forbidden so that place is not an option.
I've had to table my plans to buy until the summer, but SW is out of the question as I'm not willing to pay $600/month in HOA dues, even if it "includes everything." That's unreasonably high which is probably why many of the units in SW have been on the market for months and months. I am thinking about RI Ave.
Just curious... if $600/month including everything is too much, are you happier to pay 3 separate bills each month for $200 a pop. It's not like at the end of the day paying separately for taxes, utilities, maintenance etc. will save you any money than paying for it all at once.
Just curious... if $600/month including everything is too much, are you happier to pay 3 separate bills each month for $200 a pop. It's not like at the end of the day paying separately for taxes, utilities, maintenance etc. will save you any money than paying for it all at once.
I'm happier paying less than $600/month for all taxes and utilities. On top of a mortgage payment, I won't be able to afford that.
sounds like you may need to reconsider buying right now. There are a lot of expenses with ownership.
Agreed. Those co-op fees might scare you, but they represent the costs of maintenance and usage on a home that go beyond the mortgage. Utilities, maintenance, common areas, and taxes all add up very quickly.
sounds like you may need to reconsider buying right now. There are a lot of expenses with ownership.
Yeah, no way are you paying $600 a month for condo expenses -- unless you find a condo association that is starving its capital reserves to cut its dues. I spent a lot of time shopping condos and taken together, fees, taxes, and utilities added up to about what the "high" co-op fees came to. A typical condo fee of $200-300* plus another $200-300 for taxes,** plus utilities like heat/AC/water/cable, and you're over your $600 budget even before the costs of repairs.
Also, units in my building, even ones in very poor condition, have been turning over very quickly lately despite the high fees.
** DC has favorable property tax treatment for co-ops vs. condos -- my unit's share of property taxes comes to $1000+ less than the condos that I looked at. It used to be even more favorable, but was cut back in recent years.
I will be debt free in about 16 months. By that time I "will" be able to pay a (higher) condo fee, but my concern is that over time that fee will SKYROCKET. These days, I've been lucky to get a cost of living increase at my job each year, and that's it. Say I buy a condo at the end of the year. Could my $500/month condo fee conceivably be say $850 ten years from now?
I know it all has to do with the upkeep of the place and such, but I have no idea about how much condo fees can go up from one year to the next. Is it like a rent increase? Or can there be several years where the fee doesn't go up at all?
In my building in particular, it's usually 1 to 2%. But the question you have to ask yourself is, will you be living in your condo 10 years from now. If so, why do you care if it went up $350 over that time span. You've either sold it for a bigger house (which I plan to do) or you're renting it out. I think you have to sit down and ask yourself, am I going to live here for 3 years, 5 years, etc.
Further, you said you'll be debt free in 16 months. Does that mean you want to buy in 16 months or do you want to buy now? Because in 16 months, with all the new development going on, condos may be higher in price.
In my building in particular, it's usually 1 to 2%. But the question you have to ask yourself is, will you be living in your condo 10 years from now. If so, why do you care if it went up $350 over that time span. You've either sold it for a bigger house (which I plan to do) or you're renting it out. I think you have to sit down and ask yourself, am I going to live here for 3 years, 5 years, etc.
Further, you said you'll be debt free in 16 months. Does that mean you want to buy in 16 months or do you want to buy now? Because in 16 months, with all the new development going on, condos may be higher in price.
Ideally I wanna buy now. ;-) And yeah I didn't think about that, re: how many years I'd actually be LIVING in the unit. Ten years, quite possibly. After that I'm not sure.
my concern is that over time that fee will SKYROCKET.
That's certainly a legitimate concern.
1. Most people are also in your boat; hence, skyrocketing fees are relatively rare. (Here in SW, most of the associations are run by elderly people who are really sensitive to dues increases.)
2. The bigger thing to worry about at most condos will be special assessments for large capital expenditures. (Yes, you can usually finance or HELOC a special assessment, but those aren't exactly the best loan terms around.) Hence:
3. Ask to look at the condo docs early on; that includes the association budget. Look for ample reserves, relative to the size & age of the building -- IMO, the association should be able to pay cash if a major system suddenly fails. Also ask to see the association's capital expenditure plan. DC law entitles you to see the condo docs after you make an offer, but most places will let you see these earlier if you ask.
4. Home inspections certainly are necessary, but also try to have an independent assessment (if possible) of common areas like roof, basement, walls, and shared systems like boilers, to get a sense of how much life is left in them and how well they're taken care of.
5. I'm a little biased towards professional building management. It adds expense, sure, but these things are too important to be left to volunteers.
6. I'm also a little biased towards co-ops, as you might have noticed, and one reason is that it's easier for a co-op to take out a loan for capex than a condo association. It's one of the flip sides of the co-op being a stronger organizational structure than a condo association: instead of issuing a special assessment payable all at once, the co-op can get a commercial loan, do the project all at once to save labor costs, and assess its members each month until the loan is paid off. In DC, the amount of any co-op commercial loan (the "underlying mortgage") is added into the listing price of units, since the new owner will assume that debt. Here's an example and better explanation, although most underlying mortgages are nowhere near that large. (CHT used the underlying mortgage to finance the building's construction.)
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