All Forum Posts by: Dorjee Wangchen

We have represented many investors with investment condos. Very often they are able to have reduced insurance rates often a 200-300/year for liability only. We often recommend all renters carry renters insurance to further give the renters someone to collect from before going after the landlord. Many people don't like condos because of the HOA fees, but they pay for the insurance, lawn/snow, and sometimes water bills. So much of the HOA fees reduce normal costs. Condos do not appreciate at the same rate as homes but the average difference is about 1% and it really depends on the area for both homes and condos.

We have a calculator on our website that allows you to input HOA fees and costs to give you a good idea of your CoC for either homes or condos (if you enter HOA fees it automatically adjusts for condos).

thanks amber 

Once you find a condo that you like, you may want to ask for the last three years' budget reports and study their expenses and reserve funding.  I don't know if it's possible but talking to the management company may be useful also.  

I’d highly recommend Brandon Hershey for any insurance needs. He is also an investor himself, be a great person for you to speak with!

I'm not sure if you plan on renting or occupying as a homeowner but the others have provided you with some good advice.

1. Make sure you understand the rules of the HOA (some do not allow renting and some might have a fee of $300 each time you move someone out or in=$600 per tenant change)

2. Look at the condition of the HOA and their reserves

3. Get a feel for the type of people that live their

One of the reason condos/townhomes look so attractive is their low price, but you really should look at what the $300-$400/mo is going to do for you. I have not owned a place with a HOA, but I have run numbers on some to determine what the price difference is for a single family home in the area if you factor in the cost of the dues as being able to afford a more expensive place. In some areas, for the HOA cost, you still would not be able to buy a SFR, where as others, the cost difference of the HOA would make it affordable to buy a SFR instead of a townhome/condo.

@Dorjee Wangchen It's not actually strictly a condo issue it's an association issue. If the condo or townhome association prohibits or limits rentals then you cannot rent the property. I would speculate that 85% of all HOA's either prohibit or limit rentals. I'm not sure the percent that prohibits them but I would guess it to be over 50%.

I think $450 is very high but it depends on the amenities.  If the building has underground heated parking, a pool, a kick-a__s workout room, and other luxury amenities it might make sense, otherwise, I doubt it would be worth getting into that building.  Remember HOA dues never go down.

Another thing to look for is that the association has the proper repair reserves.  If they do not then you could end up with either a very large increase in dues to make up for a lack of savings or even worse you can end up with a large assessment to fix a major mechanical issue.  I have heard of more than $15,000 assessments, that will kill your cash flow :(

@Dorjee Wangchen @Tim Swierczek My grandmother lives in a Luxury Condo in Edina, association dues are high and she ,along with every other owner,  just got slammed with a $52,000 assessment each to redo the stucco siding since the contractors that built the place did not use proper water barrier.  Be Very Wary of associations.  

@Dorjee Wangchen not all condos allow rentals so you need to figure that policy in each association. It’s also a good idea to get a feel for the association of self some of them really are run by a few people that wait you Memes the dues to fit their needs which can be problematic for other owners.

I would get your financing lined up first.  The good agents will only take you seriously when you are financeable.  It's a crazy market and the busy season and there are just limited hours in the day! Then, I would line up coffee appts with a few agents, stress availability, communication, experience and make sure they aren't going to dump you off on some brand new agent once you get signed on! Go with the one that answers your questions straight and that you feel most comfortable with, worry less about gimmicky sounding perks!