Question for Condo owners

[mcblogerson]

that's what we're doing with ours starting in a couple months. How do the tax write-offs work?

You can depreciate the property by 3% every year based on the purchase price. Once rented, any expenses or repairs excluding association fees/assessments are also write offs.
I rent mine for only $100 more than the expense, take a few liberties in write offs regarding expenses and it's turned an average $3k profit/year. You can get generic rental forms at Office max that can be written to your specs.
The biggest thing is finding a good renter. I got lucky and found a couple that pays pretty much on time, keeps it clean and wants to buy it in a few years.

 

[Cychl82]

Yeah, and those ritzy features are what is drawing me to those Condo's. I think I'll stay far away though if they are that hard to re-sell

Also i would stay away from them for the simple fact that if you have irresponsible lenders in your unit/building etc....any foreclosures can make the HOA jack up your association fees and ive seen that cause your fees to go up significantly with nothing you can do about it.

 

[ISUAlum05]

As has already been said, condos are a ***** to resell. I don't recommend them.

 

[alarson]

dont forget to include the hoa fees in your comparisons

the mortgage is cheaper but if u pay like $1000/yr in hoa fees thats quite a bit of money you wont get back in equity

Yeah, but those are often a trade-off for what you might be paying in insurance, water, trash, maintenance, etc that wouldnt be going towards your equity either.

 

[cycloneworld]

The wife and I are looking to purchase a home in the near future. I would prefer to buy a home, but I have seen some very nice condo's for much cheaper than single family homes. The only reasons why I don't want a condo are the chance of having loud neighbors and not having my own yard to myself. If you own a condo, would you recommend it or would you spend the extra money on a house?

There is a reason they are much nicer yet much cheaper (ie. supply and demand). Unless you can get a helluva deal, resale is always going to be difficult with a condo. So unless you are going to stay 10+ years and can get a great deal, I'd stay away.

 

[Cychl82]

Basically were all saying take the good with the bad but with condos you might see the negative outweigh the positive in most cases.

 

[00clone]

Another stop on the rainbow that is between an apartment and a single family house is a zero lot line house. Essentially it's half of a side by side duplex. It differs from a townhouse in the fact that the property is not common, often there's no association, etc. You own the entire structure and property, it's just that one of your 'exterior' walls is drywall-stud-drywall....then your neighbor's 'exterior' wall is 3 inches away done the same way. We had one for about 7 years, was brand new when we bought it (at the height of the boom), finished the basement, sold it last year for about even money (we got our basement costs back too). Costs will be higher than a condo, less than a single family. Selling is easier than condo, harder than single family, but over here that's just because of the amount of them for sale at any one time. However, we got a realtor who specializes in preparing properties for sale...we stained the deck, cleaned up, rearranged some furniture, got rid of some clutter, did some spucing up of our interior design using realtor's stuff...priced it well, and it was on the market for 6 days.

 

[HGPuck]

Just my two cents. The reason to buy a condo/townhouse is for location. If it gets you significantly closer to work, makes a lot of things walkable, or gets you on a lake it makes sense. To buy one because of the countertops and fixtures doesn't make a lot of sense.

I tend to look at condos as a type of hybrid between renting an apartment and buying. You probably won't make money on the condo but can do better than renting if you buy well and sell aggressively. I don't see residences as an 'investment', at best you are usually doing slightly better than holding value vs. inflation after taxes and expenses with a SFD. So for me its what you are willing to pay to live in a certain location, by renting or having your money tied up in something you purchase.

 

[capitalcityguy]

My "first home" was a single family home. My next three (and current home) have been townhomes so I can share my experience with both.

The first mistake most are making here is not putting your lifestyle as the #1 factor in your decision. IMO, that should be first and foremost on your mind when considering. I continually see people who's lifestyle suggests they live in a SFH, but for some reason ended up in a townhome/condo. Additionally, I see people who's lifestyle suggests a townhome/condo to be the choice, but they find themselves in a SFH. I would say this happens when people don't consider their lifestyle when selecting which type of home to buy (or for that matter whether renting vs buying may make more sense).

I love doing yardwork, but at this point in our lives we are extremely busy with work, our child's activiies, extended family commitments, and on top of that enjoy recreation/travel. I'll have plenty of time to burn Saturday afternoons, weekday evenings, etc tending to a lawn when I'm older and don't have a much going on. The better quality of life that townhome living provides us to meet our lifetyle wants/needs, easily makes up for the tradeoffs for us in accepting lower appreciation, loss of privacy, potential for lower time periods to sell our home, etc.

 

[capitalcityguy]

IF you decidee condo/townhome meets your lifestyle, THEN you need to carefully research where/what you buy.

You need to be sure the HOA is well funded to meet future obligations it is responsible for (i.e..replace roofs, sidewalks, etc.). I believe a lot of lenders are now doing this too before they'll underwrite a mortgage to a condo/townhome complex. Ask to see their books. This is public information for the all members of the HOA, so the seller will be able to provide.

Despite what some have said here, you do NOT get as much for your money with a condo/townhome as you do with a SFH. I own a 3,300 sq foot townhome with a walkout basement. Believe me, I could buy a very nice home with a nice sized yard for what I paid for this. With a condo/townhome, you're paying for the lifestyle (and in many instances location) your unit provides you, not square footage.

Don't buy more than you can afford. As mentioned, generally speaking townhomes/condo's don't sell as quickly as SFH and they don't appreciate as quickly. In a hot market, you'll be fine. It a poor or slow market, you could be sitting on it for awhile. As some have mentioned, renting it out eventually can be an attractive option. I have held onto one of the townhomes that used to be my primary residence and have been renting it out for over 10 years now. Originally it was jsut a nice tax right-off. Now it provides me some cashflow.

 

[KnappShack]

A lot of the resale issues are determined by the local market. The days on market for condos in my area is about a week. In the Des Moines metro I remember condos not being nearly as attractive

I rented my place for a few years and that worked out well. Not a lot of things to go wrong where I couldn't get the HOA to repair. But some renters are just nightmares

Enjoy the search! Home buying is about as stressful as child birth, family death, and unemployment

 

[Judoka]

If you are looking to spend single family home money, buy a single family home. There were townhomes in North liberty that were around $200k. If I'm going to spend 200k on a home... i sure as **** wont be sharing a wall with someone.

I seriously don't understand that either. Row upon row of identical townhouses in the middle of cornfields. Who the heck would want that? I could see buying a full building and living in one unit while renting out the rest. But that's the only way I could see that being remotely attractive.

 

[dmclone]

You can't blanket all SFH, Townhomes, Condo's.

I bought a townhouse in Johnston back in 2002, kept it 5 years, sold it in a week, and made a nice profit. The key was that I sold during the top of the market and there were not a lot of empty townhomes in my area. The people who bought our townhome lived in it for 3 years and sold it for a $5k loss.

I then purchased our current SFH brand new(at the top of the market). I've probably stuck $30k into it and it may have went up in value at the most $10k.

There are good and bad things about both. We never had noise issues but we did have an issue where nearly everyone's roof leaked because of a design issue that caused ice damns to form. Those were built by Jerry's homes, which I wouldn't recommend. On the other hand, our house was built by Regency and we haven't had one issue since we moved 6 years ago. It is nice to not have to worry about mowing, shoveling, etc but you pay for it through the HOA. Also, with new townhomes it seems like the HOA fees are just a teaser and they go up a lot in a few years. I think ours went from $60 to $125 in the 5 years we were there.

One thing I'd never do is live in cheap condo's. I was walking by some the other day downtown and it was like government housing. People yelling, kids everywhere, toys everywhere, etc.

 

[CarlHungus]

You can't blanket all SFH, Townhomes, Condo's.

I bought a townhouse in Johnston back in 2002, kept it 5 years, sold it in a week, and made a nice profit. The key was that I sold during the top of the market and there were not a lot of empty townhomes in my area. The people who bought our townhome lived in it for 3 years and sold it for a $5k loss.

I then purchased our current SFH brand new(at the top of the market). I've probably stuck $30k into it and it may have went up in value at the most $10k.

There are good and bad things about both. We never had noise issues but we did have an issue where nearly everyone's roof leaked because of a design issue that caused ice damns to form. Those were built by Jerry's homes, which I wouldn't recommend. On the other hand, our house was built by Regency and we haven't had one issue since we moved 6 years ago. It is nice to not have to worry about mowing, shoveling, etc but you pay for it through the HOA. Also, with new townhomes it seems like the HOA fees are just a teaser and they go up a lot in a few years. I think ours went from $60 to $125 in the 5 years we were there.

One thing I'd never do is live in cheap condo's. I was walking by some the other day downtown and it was like government housing. People yelling, kids everywhere, toys everywhere, etc.

Yeah, it's kind of the get way you pay for type of thing. I was leaning towards a SFH, but there isn't much question in my mind anymore after this thread. I like to save money where I can, but housing is probably something worth spending a little more on to meet your needs as long as you're living within your needs

 

[kilgore_trout]

how do you check out an HOA?

 

[00clone]

how do you check out an HOA?

Ask your realtor for the agreement.

 

[capitalcityguy]

I seriously don't understand that either. Row upon row of identical townhouses in the middle of cornfields. Who the heck would want that? I could see buying a full building and living in one unit while renting out the rest. But that's the only way I could see that being remotely attractive.

Agreed that wouldn't be my choice but that is hardly a description that fits every townhome development.

 

[Mtowncyclone13]

New lending practices have destroyed condo prices.

So sick of hearing how the banks destroyed these prices. They have nothing to do with it. Either you can afford it or you can't - the banks have no bearing on that.


The only townhome/condo I would ever buy would be in the city. Not West Des Moines, not Ankeny, etc. The point of a condo is to live close to everything, within walking distance, and living by 35 in Ankeny doesn't fit that bill.

 

[Judoka]

Agreed that wouldn't be my choice but that is hardly a description that fits every townhome development.

In North Liberty it does.

 

[dmclone]

I don't regret buying a townhouse. I was young and it was our first house. For $130k I got a brand new 1,500 sqft place, 2 car garage, good location, etc. If I wanted to buy a $130k sfh I would have been in a crap house in a crap neighborhood.

My payment was less than $1,000/month on a 15 yr mortgage. If I had been smart I would have just paid an extra $700/month the amount instead of buying a house and I would have had it paid off in under 7 years. Right now I would have a $140k townhouse with no mortgage.