I recently moved to a new city for a job. I basically hate this city apart from the job, but the job is good enough that I will likely be stuck here for 10 years or more. I just found an apartment I really like, and am about to take possession. However, I have wondered if I should buy a condo. I am not up to the task of buying a conventional house (I'm single). When you factor in the condo fees, interest, and property taxes, I feel I am better off financially by renting. The main advantage of a new condo IMO is that it comes with sexy granite counter tops, nicer interior, etc. and more space. I am not even considering buying anything at this point, but maybe down the road. Thoughts?
Renting an apartment vs owning a condo
- Thread starter desert monk
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I'm big on buying real estate as it's like having an unknown bank account where renting is money thrown away. RE generally increases as you're paying it down. After 10 years of owning you should have well into six figures of equity as opposed to zilch, zero, nadda when renting. I don't know how condos hold their value, I assume they do.
If you know you're going to reside somewhere, I would buy. Depends if you can rent a one bed for 1000 all inclusive as opposed to 1500 to 2000 grand a month for a condo, then you may have a point. (these numbers are based on a smaller city rates)
If you know you're going to reside somewhere, I would buy. Depends if you can rent a one bed for 1000 all inclusive as opposed to 1500 to 2000 grand a month for a condo, then you may have a point. (these numbers are based on a smaller city rates)
Condo fees for most of the newer buildings close to downtown are bonkers. If you hunt around, there are bachelors' places right on the subway line where your monthly rent is only $150 more than the monthly condo fees for some newer buildings.
Condos have their share of issues mostly with the condo corps, I own a townhouse that is part of a condo corp and getting them to do anything takes absolute fucking ages.
Took them two years to fix my leaking roof and in order to do so they had to saddle all the owners with a special assessment(I was not the only one complaining about leaking roof) and they still haven't gotten back to me about fixing all the water damage.
So before you buy make sure you investigate you condo corp. Ask them to provide copies of the minutes from the yearly meetings. Had I known about that before I bought the place I would have seen the complaints from other owners about leaking roofs and I would have run the fuck away.
Now I have to waste a ton of money to hire someone to fix the damage and hope I can at least sell it for enough to pay off my debt and recoup the renovation money. My friend thinks I can get $300 000+ but I'm not so sure.
So yeah... do your homework, do the math and step into condo purchases carefully. If it's new it's less likely to have huge problems but the even then the developer might have cheeped out in some ways. So you need to have as much info as humanly possible.
Took them two years to fix my leaking roof and in order to do so they had to saddle all the owners with a special assessment(I was not the only one complaining about leaking roof) and they still haven't gotten back to me about fixing all the water damage.
So before you buy make sure you investigate you condo corp. Ask them to provide copies of the minutes from the yearly meetings. Had I known about that before I bought the place I would have seen the complaints from other owners about leaking roofs and I would have run the fuck away.
Now I have to waste a ton of money to hire someone to fix the damage and hope I can at least sell it for enough to pay off my debt and recoup the renovation money. My friend thinks I can get $300 000+ but I'm not so sure.
So yeah... do your homework, do the math and step into condo purchases carefully. If it's new it's less likely to have huge problems but the even then the developer might have cheeped out in some ways. So you need to have as much info as humanly possible.
IMO condos are a big waste since you're buying a concrete box that is identical to the other concrete boxes around; they are commodities. Further, there is nothing you can do to the unit to increase it's value like a home e.g. landscaping, renovations, etc. Regardless if you're paying rent or a mortgage, I think you also need to invest as well.
That's not always true. The first thing you learn in most businesses classes is renting vs buying and when one would be better than the other. Renting is generally cheaper than owning on a per month basis (if it's not, then they probably aren't comparable assets, or you're not including all the relevant costs of owning). Renting may only be 200-300 cheaper per month, if that, but that still adds up over time. If you invest those savings, or if you can get a lot of utility out of an extra 200-300 a month, then renting could be better. At current real estate growth rates though, obviously buying would be better if you intend to sell, but the main reason I wouldn't get a condo is because I just don't trust the market at all in 15-20 years. Unless you're getting a well made condo in a great location, it's not a good deal. Are people going to overpay for a 20 year old shoddily made condo in 20 years, when there's a ton of them on the market?
I used to own a townhouse style condo, that I bought new. I basically dealt with every downside that's been mentioned ITT. I sold it at a small loss after being on the market for 1 whole year, the market is slow and very saturated where I was. I invest money, I have a lot of money in savings and investments, I don't need to buy a place hoping it is worth more in 10-20 years to have savings. I have priced out what it would cost for me to have a condo I like vs renting, and in most cases I am spending 80%-100% (or more) of what I would spend in rent per month on taxes, condo fees, and interest. The higher end the condo, the more this increases.
Much also depends on where you are in your life. If you're in your 50's and you've got 10-15 years till retirement, I'd rent.
But it sounds like you're still relatively young. Renting can pay off if you time the market. Buy a condo after the supposed bubble. But even if you buy high now, you may have time on your side for prices rebound after any crash.
But it sounds like you're still relatively young. Renting can pay off if you time the market. Buy a condo after the supposed bubble. But even if you buy high now, you may have time on your side for prices rebound after any crash.
I'm going on 9 years renting - love my price for renting , hating the building and the neighborhood.
when I moved in I didn't think home ownership was for me but not a little more life experience I am thinking I should at least give a try at least once and be a home owner.
All my family own houses - dad even does real estate - when I ask him advice its never about getting a mortgage or down payment its always about concerning being able to handle to the ownership cost.
If you can work the numbers and handle the cost of home ownership and adding a huge cushion for things that could go wrong then go for it.
when I moved in I didn't think home ownership was for me but not a little more life experience I am thinking I should at least give a try at least once and be a home owner.
All my family own houses - dad even does real estate - when I ask him advice its never about getting a mortgage or down payment its always about concerning being able to handle to the ownership cost.
If you can work the numbers and handle the cost of home ownership and adding a huge cushion for things that could go wrong then go for it.
Why would you want to cash in everything like that? I assume your mortgage is done so you're living rent free. Unless you need the money desperately stay put.
I am sure people have done well, but I don't understand condos as an investment. The maintenance fees squeeze you over time, and older buildings really look their age. Plus, there are so many buildings going up I worry about a excess supply and how traffic will accommodate so much density. One bedroom condos are too small for most people, let alone families so they can only be sold to single people with a good income who want to live in such a small place, which seems rare.
I would go further and include all houses built in the last 15 years (or whenever it started booming and houses began getting slapped together in a month). Actually, I recently looked at a couple show homes. One was a house for $900,000.00, the other was an apartment condo for $310,000.00, both new. The condo was built with higher qualities materials, and seemed like a much better built place than the house, which to me and my house-savvy female friend seemed like a piece of junk.
These are legitimate concerns. I think the whole condo boom was a way for realtors and developers to get rich quick. Since many condo owners use them as an entry point into real estate, and hope to move to a stand alone house at some point, why wouldn't they just make more decent rental apartments? Oh wait, less money for realtors and developers. They are basically downloading the duties of the landlord and management onto the owners and condo board, and walking away with the profits. That being said, if money was no object I would buy a condo over a house tomorrow. The only reason why I am renting instead of buying a nice condo is because it is cheaper and I don't want to go through the struggle of selling it in a difficult market again when I inevitably move to another city.
This is the counter to Wazup. If renting is cheaper, you can invest in other things besides your home, provided you're disciplined and a savvy investor.
For many (older?) people the investment income from the sale combined with the maintenance work on a house is a driving factor.
The interesting factor for the OP is that he expects to leave the city in a decade. If he planned on staying in the city, taking a loss because of market factors is a wash since those same factors would effect his next place too.
Which is why people should spend time investigating how well the condo board and management company work. They play a huge role in maintenance and maintenance fees.
The new stricter federal mortgage rules will eliminate a bunch of potential house buyers. Basically, you need more income to qualify for the same size mortgage.
