Post # 1
We currently live in a one bedroom apartment that we rent. And are planning to move out next year into a 2 bedroom so the baby can have her own room before she reaches her 1st birthday. Looking at the prices of 2 bedroom apartments in our area ($1300- $1500) Darling Husband was thinking that maybe its better to just buy a condo and pay a little extra living in a place that we own. I always though that from an apartment we would just buy a house. I dont know much about condos and dont know if its worth it or not. Does anyone live in a condo or have xperience with owning a condo?
Post # 3
I think there are some obvious pros and cons. A major pro is that a lot of your utlity bills will be covered by the condo association fees. This isn’t true for all condos, but there are many that pay your water or sewage bills with this fee. It will also cover any lawn care, building upkeep, and some maintence fees. But you do have to consider condo association fees when you factor in your mortgage costs. Our building’s fees are $300/month. But it also comes with use of their gym and sunroof and a valet parking spot.
As for the pros, I feel like if you are not in the city or used to a house and a yard, you will eventually want that. Condos are so easy to out-grow if that isn’t your lifestyle.
Post # 4
To me, it is always better to buy than rent if you can afford it. You’re building equity and will most likely make a profit when you sell and trade up. Rent goes right out the window. Oh, and the tax write-offs for mortgage interest guarantee you a big tax return.
Post # 5
I’ve never lived in a condo myself, but my husband and I just bought one as an investment property. After looking at many options, we finally found one that we believe will be a good return on investment, a great location, and affordable. The condo fees ($210/month) include all utilities except electricity and the taxes are about $100 a month.
My mom is actually going to be living in it for now, and we bought her a top floor unit. She feels safest up there!
I’m also in the boat where if you can afford to buy, it’s always better than renting!
Post # 6
- Wedding: October 2011 - Bed & Breakfast
When looking at it from the money angle, make sure you factor in your mortgage, condo association fees, property taxes, home owners insurance (much more expensive than renters insurance), and the need for a slush fund to replace the stove, fix a plumbing leak, etc. This doesn’t include the upfront money that you would need to sink into the place for a downpayment and closing costs. When you look at all of these costs, you may find that you would be paying more that just “a little more” in order to purchase a condo. And make sure that a condo will fit your needs for at least 10 years. Otherwise it may not be a smart money choice because you’ve spent such a large amount in upfront costs and the first 10 years of a mortgage are primarily spent on interest, meaning that you’ll barely put a dent in your principal to pay down the actual loan amount.
Post # 7
Thanks for the responses so far and please keep them coming.. this is all really helpful information for me.
Post # 8
I rent in a condo and I love it. I have heard horror stories about buying, though. This month a coworker of Darling Husband was contacted by his condo board to let him know that they were out of money. Every owner was required to give them $10,000 by the end of April! Rather than doing that he is selling and moving.
Post # 9
It depends on where you live and the market. A condo in a major urban area will be in demand when you sell much more than a condo in a more residential/suburban area.If you’re planning to move on to a house in 5 or less years, it’s also not a great deal, as the closing fees and realtor fees are a huge expense, and your property won’t have appreciated enough to make those expenses a wash.
Post # 10
Another thing you want to look into is how well funded the association is. You want to make sure there is a fund for repairs (to fix the roof, etc.). Also, if you do end up growing out of the condo you may want to rent it- so you should check to see if you will be able to.
Post # 11
I think a lot depends on the condo market in your area and how long you anticipate staying there.
Are condos in high demand or are there too many condos available? This will play in the both how good of a deal you might be able to get and how easily you may or may not be able to sell.
As PPs have said, don’t forget about down-payment, closing costs, association fees, etc when calculating your costs to purchase and get a mortgage.
Post # 12
It absolutely depends on where you live.
We live in a 1 plus den condo right now and it’s perfect for the 2 of us, if Fiance could have afforded it at the time he would have bought a 2 bedroom and we would be set for a few more years. We have tons of amenities and our building is only 5 years old.
I would be careful about assuming what condo fees cover. Here they vary greatly from condo corporation, some include all fees while others include nothing. Here in Ontario it is required that a lawyer look over what we call the Status Certificate, it is basically a package of documents that contains the corporation bylaws and all of the financial information, not sure if you have something similar.
If you’re planning to move on to a house in 5 or less years, it’s also not a great deal, as the closing fees and realtor fees are a huge expense, and your property won’t have appreciated enough to make those expenses a wash. <– Definitely something else to consider, but whether or not it will be worth it is going to depend on your local market. We’re only 3 years into living in our condo and if we were to sell today we would make a 50k profit (after fees).
@GreenDream: That’s so messed up. That’s why we have laws requiring reserve funds. Lawyers MUST look over status certificates to determine if the condo corporation is in good standing.
Post # 13
We own a condo in Indiana and are in teh process of buying a condo here. Usually you can get a condo for pretty cheap compared to the monthly cost of an apartment and have a lot more space. Have you started looking around at prices?
In Indiana, we were renting an apartment (1bedroom/2bath) for $800 a month. We bought a condo (same area) with a 15 year fixed mortgage (3bed/3bath) and our mortgage payment was $600 plus $120 assessment fees. We paid LESS for our WAY larger condo then our tiny apartment. For us, it was so worth it.
Here in Chicago, we pay $1050/month for our 2bed/2bath apartment (less than 1000 square feet) and our condo we will purchase our mortgage willl probably be about $800/month for our 3bed/2bath (1800 square foot) condo plus $150 in assessment fees.
So, for us, condos make much for sense. What you need to factor are the assesment/association fees, specialty assessments, the association’s bilaws and $$. Also, just like when you havea home, you must have funds avaialble for break/fixes. If your fridge breaks you have to fix it, etc. Also, you have to have $$ for a downpayment and good credit to get a mortgage (they just passed a bunch of new laws so it si harder to get mortgages now)
Good luck! Feel free to ask me any questions…
Post # 14
@Ms. Martian: Toronto is definitely a different animal that basically anywhere in the US right now! You guys’ market barely slowed down with the economic crash – there is bansically nowhere in the US that didn’t see dramatic depreciation and slowed growth. We’re there in Toronto now, our best friends bought a house a couple years ago and the appreciation is crazy!
Also, we rented a “one bedroom plus den” for a 3 month sublet….and it’s the equivalent of a normal one bedroom in the US. The “den” is really what we would consider a dining room….which is not a negotiable space in the US! It’s so funny to live in a major urban area in the states, and then to move to one in another country for a bit – the real estate is so different!
Post # 15
I would look at where you live first. Darling Husband owned the condo before we meet and now we are stuck. The house market certaintly isn’t helping but one of the biggest issues is there are so many condos in the area of Atlanta that we live. Right now is we could sell it for half of what we owe, so we are stuck for awhile. Scares me to think about how long we are going to have to own it. We are currently starting to look for a house and will rent out the condo.
I will say that the plus with the condo is HOA plays all utlities, even basic cable. That is about the only plus I see with our condo. Otherwise I feel like I am living in an apartment. Lucky for us our neighbors are older people so we don’t have to worry about loud noises.
Post # 16
There is no one answer. Every situation is different. You have to consider the market, the applicable legislation in your area, the tax implications, the financial health of the condo association, the age of the condo, the depreciation plan in place ( or not) etc.