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Old 02-08-2011, 09:19 PM   #1
victorapecinovskya
 
Join Date: Jan 2011
Default Condo buying advice

Well, I am looking at buying a condo next year around May. Right now, I play roughly $835 a month including utilities and I would rather have that go into a investment such as a condo then not being used. Currently make $50k a year so looking around the $110,000 mark in buying.

So what I am looking for is experience in the condo region as a place to live then later on when I buy a house, a place to rent. Do people have any tips here on purchasing, what to look for what not too?

Any do's or don'ts when looking and or buying?

Thoughts on how the condo market looks for the future. This is in Minnesota, around the Twin Cities area.
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Old 02-08-2011, 09:19 PM   #2
smithinchworm
 
Join Date: Jan 2011
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Find out what the condo association's fees will be before you buy. Mine are $125 a month but it gets my (tiny) lawn mowed, pays for waste water, trash, and snow removal.
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Old 02-08-2011, 09:19 PM   #3
24Billy59boomer980
 
Join Date: Jan 2011
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I'd suggest speaking to a Director of the condo association you are seriously looking at purchasing. Members of these boards typically know what's going on with a place -- such as plans for renovations, plans for fee increases, how neighbours are, etc.

These things can have a significant impact on your decision.

On a somewhat unrelated note, there is a proposal at our upcoming AGM to increase our condo fees over 100% (from $150.00/mo to $305.00/mo) for a duration of 2 years to fund 2 significant renovations: re-insulation and siding of all units and to re-do our parking lot. Not sure whether we'll support it or not, because the insulation issue is more of a concern for the bottom suites and we're not sure we'd see the return of $3500.00 in extra-fees when we sell. New siding is nice, but I'm not sure if it's that nice.

Oh the joys of condo ownership. However it is great not having to worry about snow removal, exterior repairs, lawn cutting, etc.
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Old 02-08-2011, 09:19 PM   #4
Becker Koo
 
Join Date: Dec 2007
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Condos are a mixed bag. On the one hand, you're relieved of many of the chores of home ownership - exterior repairs, landscaping, et cetera. On the other hand, there can be a lot of restrictions in place when you move in. Getting some things done can be a chore (because of the inherently political nature of spending money as a group). Or, if your condo community is particularly active and decide they don't like you, they can make your life a living hell.

"Common" doesn't really exist as far as condo agreements go. If you're considering buying a condo, read the condo agreement carefully before you do so.

Generally speaking the newer the better. If you like reading technical stuff, ask about the building's HVAC units, furnaces, age and model of the elevators, et cetera, and then research the expected life of these devices. These are things that can cause condo fees to rise dramatically, so buying a place in a building due for an elevator failure in 4 years might be a suboptimal plan if you're looking to sell in 10.
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Old 02-08-2011, 09:20 PM   #5
mashRinia
 
Join Date: Jan 2011
Location: Canada
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The monthly condo fee will be treated as "debt" with respect to meeting the mortgage qualifying guidelines. So if you have to meet the traditional 28%/36% guidelines, a high condo fee can knock you out of qualifying.

Look for a low percentage of renters. The condo association should be able to tell you that percentage. When the percentage rises too high, certain types of mortgages are no longer available to some buyers (VA and FHA, I think).

Look around at the general level of maintenance and upkeep. Do the common areas look well cared for?

Finally, find out how much the condo association has in reserves in the bank. A well-run condo association will have adequate reserves for things like new roofs, re-paving, etc. If the reserves are too low, when something big is needed the owners will be hit with a special assessment which could be devastating!
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Old 02-08-2011, 09:20 PM   #6
Zorsmeseele
 
Join Date: Jan 2011
Location: Slovenia
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Here's the textbook definition of condominium:

"The absolute ownership of a unit in a multiunit building based on a legal description of the airspace the unit actually occupies, plus an undivided interest in the ownership of the common elements, which are owned jointly with the other condominium unit owners."

We can ignore the first clause, because it's stupid and basically tells you "you own 100% of whatever's in the air between points A B C and D, defined as 'XYZ Building Unit 101'". The rest of it is what we're concerned with:

You have an interest in the common elements, owned jointly with the other owners. So decisions on what to do with the exteriors of the building, the landscaping, the pool, satellite TV (essentially anything that would affect anything outside of the physical space of your condo unit) are legally made by the condo association through voting.

If you want to get a satellite dish but old Mr. Huffenstuff in Unit 301 thinks the dish would look ugly, you might well have a fight on your hands. If you like red flowers but Ms. Priss in unit 402 likes blue ones, you might have a fight on your hands. If Mr. McPoppedcollar in unit 505 thinks using Company X for landscaping is cheaper but you know they're lazy slackers run by Mr. McPoppedcollar's brother, you might have a fight on your hands. If you want to have pets but Mr. Brown doesn't, you might have a fight.

These may sound like kind of absurd situations, but they're real things that can happen. That's not to say condos are bad, horrible places full of petty politics, but be aware this kind of stuff can/does/will happen.
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