Just wanted peoples opinions as to what they thought would be a better choice. I'm looking at getting a place, perhaps after the summer, and am really up in the air as to what to get. I really dont have the $ for a decent house (unless it's a little 1000sq/ft starter house), and anything more than that would be a killer mortgage payment. A decent Condo would be more in my range.... but how do housing values go? I've heard that Condo's don't really increase in value, like houses..... and in Calgary's crazy real-estate market that is making me think twice. Anyhow, opinions would be appreciated.
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Real Estate... House/Condo?
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Re: Real Estate... House/Condo?
well colin you've seen what i've gotten and I love it.. I have a big enough garage to work on my car in the winter (plus its heated). I wish i coulda got a double but i coulnd't find one. I have 1500sq ft and all the stuff i could ever need as a single guy. I don't have to cut my lawn or do any of that nonsense.. maybe when i'm 25-28 i'll buy a house but I like my situation.
Oh and condos do go up like snot.. my property went up 10grand last year and this year i'm guessing it'll be close to the same. You can find nice new starter houses for like 200grand (maybe pm alex on this) but then you don't get a garage so you build that and add 30-40 grand kinda deal. I guess its all what you want and what you plan on using it for. I may end up moving to the states this summer and if I do i'll have no problems selling this place..
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Re: Real Estate... House/Condo?
I own three condos and each one of them has increased almost 30% in the past 5 years where my new house in a good neighbourhood has only gone up 10%.
The bad side of condos are, of course, the condo fees and shared walls. Most places levy condo fees of close to $200 a month. For that price you could get some kid to mow your lawn, shovel your walk, and probably wash your car.
There are also these nasty things called 'special assessments' which aren't as much of an issue in a new construction as an older one. Basically repairs to the complex can come up and they are too expensive to be entirely covered by the reserve fund. The condo board then demands the money from the tenants. If you don't pay up, they can put a lein against your house for it and quite likely the bank will demand you pay up or they foreclose! Whee! I know these details because last year I had to pull $12,000 out of my ass for an assessment on my condos.
When you are deciding factor in your monthly condo fees when you are deciding how much to spend. Currently condo fees of $200 a month, if added to a mortgage payment, would buy you another $35,000 worth of house.
It is true that property taxes on condos are somewhat less than a house, but not by that much. My taxes on one of my condos comes to $1005 per year (with a city appraised value of $115,000) where as my house is only $300 a year more, but is 2.5x the value.
Houses also allow you more freedom in terms of what you can do to the place, whether you can have a pet or not, how large the pet can be, etc etc.
p.s. variable rate/fixed payment/variable amortization is the only way to go.
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Re: Real Estate... House/Condo?
Ok Guys... thanks for your input in this. I've seen Ryans Condo, and that's very similiar to what I'd be looking at.... even in the same area. If you dont mind me asking Ryan.... what are your condo fees?
Also.... the mortgage you choose depends highly on your willingness to deal with risk. I'm not sure what you mean by variable amortization? Although I agree with a fixed payment and variable rate.Sidewalks are for normal walkin.... aint no room for fancy walkin....
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Re: Real Estate... House/Condo?
Hey Colin,
If you are lookin in the NW, have you checked out the new stuff going in around Royal Oak Centre? There is also a newer development just off of Rocky Ridge Blvd. (on the Royal Oak side). I think they priced in the $150's. My sis also just bought a town house in Blue Sky for $160 something. It's pretty nice with a view of cop and an unobstructed mountain view.
Good luck whatever you do.
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Re: Real Estate... House/Condo?
The variable amortization is a possibility in dealing with the varying interest rate. If the monthly payment is fixed and the rate increases (or decreases) then the amortization time must then increase. It is possible that after 5 years on a 25 year mortgage, when you go to renew your mortgage, that your amortization period is 21 years, instead of 20, or it could be 19, etc etc.
Nearly every study done has shown that over the life of the mortgage variable rate always comes out ahead.
If a 1/2 - 1% boost in interest rates pushes you over the edge in terms of being able to afford your home then you have grossly overbought. Yes I know all about the 80's, however the US (and therefore Canada) has a much better understanding and grip over the fiscal system than they did 'back then' and as such rates are unlikely to exceed 10% in the near to mid future. I could go on for a very long time on this, but I will stop here.
However! Much of this conversation could be entirely moot as variable rates are not available to those with under 10% to put down (I could be off on the exact number, I haven't read up on the CMHC policies in a while). Sadly with less than 25% down the CMHC cornholes you between 1% and 3.5% of mortgage amount in fees. Fsckers.
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Re: Real Estate... House/Condo?
colin my condo fees are 140/mo and my city taxes are 110/mo
what neil mentioned there are brand new condos just right off of rocky ridge road 1/2 way up the hill 1st right into royal oak that are still being built/finished that probably have great prices right now.. just make sure you peep the garages.. alot i looked at the garage was stupid small.. a polo could't even fit into one..
also there are brand new condos just by the new coop up here.. if you take the 2nd turn into rocky ridge that used to be all cornery to go to part of bearspaw (you know what i'm taking about) the coop there take a right and head up the hill and you'll see all these new condos.. rocky valley townhome or something like that
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Re: Real Estate... House/Condo?
That's actually more than I expected for taxes. Condo fees I figured around that amount, I just didn't think taxes would be that high. I would have enough for 10% down, but I wouldn't have enough to clear my way past the 2-3% charged by CMHC.
Anyhow, thanks for the input guys. Much appreciated.Sidewalks are for normal walkin.... aint no room for fancy walkin....
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Re: Real Estate... House/Condo?
My 2 bits - Don't overspend. A guy who buys a 100K condo then after 5 years buys a 200K house then after 5 years buys a 500K house will spend around half of what a guy who spends 500K on a house right off the bat.
When you have a huge morgage with minimal down, most of your monthly payment is interest (ie, rent/garbage money). You only make money as the equity in the house rises, which is nice but after realtor fees etc it's not as sweet as it looks.
If you have an shorter term morgage, half your money is rent/garbage but the other half is basically going into a savings account for you to withdraw when you sell.
Special assesments are brutal but my buddy almost got screwed by a condo fee raise. He WAS paying 200 or so for a downtown appt style, and one day they bumped the condo fees to over 400 bucks. He was very lucky that he was able to sell and break even. ALWAYS check the reserve fund - I know of a few condos downtown that are almost bankrupt due to pending lawsuits.
We bought a condo for 88K - sure it wasn't the greatest but it was 900 sq/ft - more than enough for two people. 25% down, 15 year morgage was still only 550 a month. Stayed there for 4 years, sold it, then paid 25% down on a pretty nice house and still have a relatively wimpy morgage. Interest is evil. CMHC is evil. Avoid as much as you can.
KhyronLast edited by Khyron; 01-24-2005, 12:12 AM.Geoff
Fear is the element that unites all losers.
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Re: Real Estate... House/Condo?
Another option for coming up with a min. 25% down is to borrow from rsp's. If you are a first time home buyer, you can borrow up to $20,000 from your rsp's. Providing they are 90days or older. I believe you have 15 years to repay them, 1/15 of the borrowed amount per year.2012 gti, 2012 mustang.
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Re: Real Estate... House/Condo?
Interest on the mortgage is only somewhat evil if you can manage it. Mortgage money is, by far, the cheapest money you can get.
If you are young and have ANY outstanding debt, or room for RRSP contribution etc then go for the longest term mortgage you can get and put that extra monthly money to work for you. The only drawback to that plan is that it requires some substantial discipline to ensure that money goes toward making money instead of feeding a starbucks habit. I can honestly say that I have spending habits poor enough to not make that scenario work.
To my credit my saving habits tend to work out super when I have large chunks of cash, therefore on all of my properties, as soon as the mortgage term comes due I refinance and suck all the equity out. That money then goes to investments, higher interest debt, etc.
Khyron is exactly right about overspending and for more than just the reasons he stated. More expensive properties tend to appreciate slower and are also harder to sell which could put someone who NEEDS to sell in a real pinch. Don't forget the ass-raping realtor commissions.
A friend of mine lived in a little 1000 sq ft place for just over 10 years. Now she is in a position to draw the equity out of her place to use as 25% down on a house and then rent out her old place. That's a hell of a deal.
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Re: Real Estate... House/Condo?
Im actually in the process of, well.., renting a place for a year to get in the swing of being on my own and Ive got a couple questions, and comments.
First off, Colin, watch out for condo fees, you need to make sure the place you're buying has a "nest-egg" so to speak, so most of the time the newer condos arent the way to go. What if they did a shitty job roofing it and it leaks in 6 months? Who's pocket do ya think that's going to come out of?
During that storm on the east coast, my brother's condo building got about 15-20 broken windows and tonnes of rain damage and they had to charge every tenant in the building an arm and a leg in condo fees to make up for the damage.
Regarding condo fee's, when renting a place are they generally included? Same with city tax?REAL men use harsh language as self-defense
-james
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Re: Real Estate... House/Condo?
When renting most components of the cost are paid by the owner/landlord and thus passed on to you in your rent, with the most common exception being utilities, phone & cable. I think Colin that no matter what you get into if you can buy at a young age you will be much further ahead in the long run. If you are looking at new places condos have to give you a copy of the bylaws for 10days to review and examine their policies and condo fee budgets.
I personally owned one condo and have purchased another that I will be moving into in 2006 (new downtown high rise) and I think condos are great investments in fact most real estate is. As long as you do research, dont get in over your head, and be patient you should come out in a great position in a few years.Blair
Former Cars: '12 Fiat 500, '10 VW GTI, '05 Smart Fortwo, '96 VW Jetta GLX, '02 VW GTI 337.........
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Re: Real Estate... House/Condo?
I bought my house (starter home in Tuscany) last year, and looked at their assessments on value, I bought my house at ~$15K under value, and the property had appraciated about $12K/year for them. I have houses next door selling for $20K more than I paid, and I've only been here 8 months.....There will ALWAYS be a need for starter homes (easier to sell), and although it is small (1100sq/ft), I have a large yard, I can crank up my theatre system as loud as I want, and I own my own house...We came into this with a plan to sell in 3-4 years, and move up to something larger with an attached garage, my mortgage payments are less than I paid in rent ($830/month), taxes are about $1300/year.....The nice thing with mortgage payments are that they are more like "putting money away" than they are spending....I also went with variable rate (3.55% start) with fixed payments....BTW, I looked at the blue ridge condos in rocky ridge, and was thinking about buying there, very nice places! I'm just not a condo person......2006 Colorado Xtreme | AEM CAI | Walker exhaust | smoked glass | -1" dropped rear | Avic D3 | 8000K HID's
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Re: Real Estate... House/Condo?
Lots of good advice in here... but there are a couple of things I think I could add:
1. If you're buying a used condo at all, ALWAYS make sure to get a Condo Check done. If you haven't heard of it, basically there are companies out there who you can hire that will research the condo corporation for you and provide you with a report and recommendation regarding the health of the corporation. There is nothing worse than buying into something that is horribly managed, or has known structural/mechanical problems. The company I used is called "CondoCheck" (if I remember correctly), but there are a few others. It cost about $300, but is well worth it. Think of it as a building accessment that you would get done if you bought a used house, except since you don't need to check pipes/water heaters/etc. with condos, you spend that money on making sure the condo corp is in good shape.
2. Don't be too scared by condo fees. There is a lot of variance in what they can be, and also what they cover. Is the unit hot water heated? Does the fee include some utilities like natural gas? (mine does). Also remember that condo fees are levied based on unit factor, so the larger the unit you have, the higher percentage of the total budget that you pay. This is usually (if not always) determined by sq-ft'age.
3. Property taxes are no different on condos as it is solely based on the city assessed value of the property. Regardless if it's a condo or not.
The most important thing about a condo to remember is that you OWN the condo (ie: the whole corporation) - or more accurately put, you own your unit factor of the condo corporation. Take an active interest in how it is run, learn now they work. I am on the condo board where I live because of this. If you have any questions about how stuff works I can probably help.
That's all I can think of right now.
Edit: Oh yeah, just thought of another thing: you must think of how long you think you will want to stay in the place you buy when deciding if buying new or used. Buying a new place means you need to stay a little longer to recoup the additional costs (ie: GST). You can't make someone buying your used place pay GST, so you have to absorb it. My realtor suggests that you can break even on a sale of a new property after 4-5 years, and a used property after 2-3 years. Of course these are totally just estimates and lots of factors could change that, but it's something to think about.Last edited by Billip; 01-24-2005, 12:24 PM.billip
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