guitarmaan

I wonder if anyone can advise me on whether it's more prudent to buy a house or a condo in the US?

We currently own a house, and our costs are the usual tax, maintenance and yard work (no HOA here). We didn't go for a condo because we didn't want to pay association fees.

But since we are only two people with little need for extra space, we're wondering whether a condo might be comparable cost-wise overall? We're also considering a move to CA, and probably all we could afford there would be a condo.

We're more interested in the town home type condos i.e. not in a gated community and no pool. I know the fees are going to vary, but can anyone give a ballpark figure?

Money-wise which would you opt for, a house or a condo?

thanks

Ray

Never buy a Condo ..period

AdobePinon

These things vary hugely. I know some people who pay $30 a month in condo fees. I've come across others who pay in the $1000s.

Your real starting point for discussion is that you have little control over the future. Points for consideration:

What are the current fees? How have they varied over the past?
What is the mechanism for changing the fees? Is the change limited?
Is the complex in good shape now, or does it need work?
Does the HOA have a cash balance? If so, how much? Is someone trying to spend that money? (Be real careful of people who are trying to flip the condos.)
Does the HOA have any current liabilities, or judgments against it? What kind of insurance does the HOA carry?
What kind of people live there? Owners of vacation homes, "investment homes", live-in owners, and renters all have different priorities.
Is use as vacation homes limited?
Do the fees cover just grounds? Grounds plus building exteriors? The whole thing?
Is the HOA still owned by the builder?
If the HOA folds for some reason, where will that leave you in terms of liability and upkeep?
Do you have any say in who gets to buy in the place later? (Probably not.)
What is the process for voting in board members and the president of the HOA?
Can an individual expect their concerns to be addressed, or will you get railroaded?
Does the HOA have a good relationship with the city, or is the city going to come looking to create trouble by selective enforcement of laws?
...

Is that enough to scare you yet?

Karrie72

Very difficult to sell apparently, although I'm no expert, there does seem to be a glut of condos on the market that sit forever.

Noorah101

If you're looking for investment, don't buy a condo. If you're looking for a smaller place to live, with little or no yard, and low physical maintenance, a condo is good.

I live in a condo in the Phoenix area. Moved in brand new in 1987 and have lived in it ever since. Two bedrooms, two bathrooms, 1,010 SF. The size is perfect, I love it. Small back patio with low maintenance, I love it. Association fee is currently $155/month and it covers water, trash, and outside maintenance. I pay my own electric and cable. No gas. The Association is very quick to respond to any problems (over the years I've had the usual clogged sink, toilet, leaky roof, etc). The condo complex has 2 community pools, 2 hot tubs, and a clubhouse. Over the years, have seen those maintained anywhere from great shape to terrible shape...currently they are in great shape. Low crime area.

My ONE and only complaint would be that I do have upstairs neighbors, which I sometimes get tired of hearing. But other than that, I'd been very happy with condo life.

Rene

guitarmaan

Well that sounds like a good deal to me, if you get water and trash included. We'd be buying to live in, not as an investment. When you mention the association responding to a clogged sink for example, how is that covered when your payments are for outside maintenance?
I didn't know condos were difficult to sell. I imagine there is a strong market for them because not everyone can afford a house. But what do I know?
It's off-putting, simply because I like simplicity, and believe the more people involved in issues the more messy things can get.
Uh huh....
----------------

It's a shame online listings for condos don't include the association fees, because it's such a big issue when considering whether to buy. I have emailed some agents and they never reply with the figures I asked for. I guess the only way forward to meet in person and ask upfront "tell me the fees".

I also wonder if there is a difference in fees between apartment type condo in a block and town home type condos lined up side by side? I saw some in San Diego, and there wasn't any gated area or community pool. So perhaps that is the cheaper option.

Derrygal

I live in a condo - 2 bedroom, 2 bathroom. I purchased it for myself after I got divorced as I thought it would be easier to take care of - no yard work, outside maintenance, no snow removal to worry about in winter. It's not for everyone, but it suits me. I pay $220 a month in maintenance fees. There is a pool, tennis court, walking trails and also a clubhouse where we have regular get-togethers with the neighbors, pot-lucks, etc every couple of months. As I said, it's not for everyone and I believe condo prices don't rise as much as house prices, so if you're looking for a financial investment, it might not be the best idea. However, if you're looking for somewhere to live without having to take care of a yard, outside work, snow removal, etc. it would be just fine.

Noorah101

The association fee also covers maintenance if it's related to pipelines. When my kitchen sink overflowed, I called the association and they sent out their designated plumber. The deal was, if the blockage is within the pipes of my own unit, I had to pay to unblock it. If the blockage was beyond that T-joint (or whatever they call it), and was considered part of the main structure of the building, I didn't pay. This happened to me about 3 times during the past 20 years, and I didn't have to pay any of them.

Just recently, I noticed some water dripping from my bathroom ceiling. Called the association and they sent out their plumber. He cut away all the ceiling sheet rock, and determined it was a leaky T-joint in between my condo and the one upstairs. Changed out the broken T-joint, cut away all the wet/moist ceiling, replaced with new dry wall, and repainted...all in just 2 afternoons (he cut away the ceiling and inspected it the first day...took about 1/2 hour. Came back the next day and did the rest of the work, took about 3 hours). I paid nothing.

I've only had 2 really "bad" incidents: Once on Christmas Eve, some idiots went around breaking into cars in our parking lot, stealing Christmas gifts. I didn't have any in my car, and they didn't steal anything (I don't keep anything valuable in my car), but I had the smashed driver's side window). The other was when I had really bad neighbors across from me, and the teenage son was mad about something (nothing to do with me), but he came around to my side of the condo and punched his fist through the drywall and made a big hole in my living room wall. Called the police and the association....Association repaired the outside wall AND my inside wall, including repainting that spot in my living room, no charge to me. So that was really nice. Those neighbors have moved, thank goodness.

That's the only downside...you never know who your neighbors are going to be, and they live RIGHT next to you (no house / yard space in between).

Rene

guitarmaan

Yes, the issue of neighbours so close is an important one for sure. Back in the UK everyone packed in like sardines was a recipe for disaster IMO.

But it sounds like you have a nice set up where you are, with an association looking out for the residents. A big plus of condos is you don't have to worry about most maintenance. And when your house needs a new roof, that's when a house can get very expensive.

Ruth16

It would be a good idea if buying a condo to check with the bank first to see how much money the association have in their account, some associations are going bankrupt and have little or no money to maintain the property but keep selling the units, my friends were discouraged by the bank because of this, the bank offered this info when they applied for a mortgage on one in Connecticut.

Pulaski

I learned from a friend who recently tried to get a mortgage on a condo, that the banks are getting very aggressive about only lending on condos with a well-funded condo association, so in some cases the question about adequacy of the condo association funding is going to be a decision that is taken for you.

Michael

There can also be a problem if the number of rentals exceed about 30%, then a bank may consider the complete complex as investments requiring higher down payments and interest rates.

Ray

Two scenarios to consider

an older Condo unit was found to have defective wall and roof trussesnthe Condo were worth around 75k at that time ..the repairs came to $83k per unit ..the whole building was abandoned and eventually pulled down

A friend bought a Condo near Fort Myers just as the boom ended
it ended up being only 20% occupied and after a year those 20%
has to pay the monthly fees to cover all the empty unit fees
Last I heard it was all empty and closed down

Pulaski

The absolute cut-off is 50% of units in a development being rented (per regulation related to Fannie Mae/ Freddie Mac conventional mortgages), but it might be progressively more difficult above 30%. For the past few years a lower cutoff at only 10% was in force.

Xebedee

The big difference between a terrace or semi and a condo being that when you lean against the wall in a terraced house, you don't go through it.