Comments on: Should I Buy This Condo?

By: midtown condo

midtown condo — Mon, 15 Feb 2010 11:57:28 +0000

Thanks for the update!!! Wow, awesome real estate blog

By: dogbiskit

dogbiskit — Sun, 31 Jan 2010 17:57:55 +0000

Yep, it’s time to move but those maintenance fees are stooopid. Better to wait and find something else.

By: IanC

IanC — Sat, 30 Jan 2010 17:59:25 +0000

I agree with LC.

Sure, it’s time to move into a place that you will be right sized 5 years from now. But If you are looking soon at 70+ cents a square foot (with the HST coming), you should be more compensated with a lower price per square foot. There has to be a better place out there. Keep looking.

The no brainer is that it is time to replace your no name TV. Get something with decent contrast! You pay hundreds and hundreds a year in cable each year, don’t you? Watch something decent.

By: PK

PK — Fri, 29 Jan 2010 03:36:15 +0000

David, long time listener, first time caller and I love this blog.

My take: Great location, unique space, etc. If you can comfortably afford it, and it will make you happy, go for it.

The 0.65 psf maintenance does seem high at first glance, but that is just one metric. Another metric I like to look at is annual maintenance cost as a percentage of property value. I think most decent places will be at 2% or below and this property seems good from that perspective.

Which makes sense to me. BMWs aren’t cheap to maintain either, but that doesn’t affect their high market value.

The only worry I would have with re-saleability of this property is that it is one bedroom for such a big space. Most people wanting that kind of space would probably want 2 bedrooms.

By: LC

LC — Fri, 29 Jan 2010 00:05:09 +0000

If understand correctly, you would be paying about $0.65/sf in maintenance fees. That’s really high for a building that has no amenities. Infact, that is ridiculously high and will only go higher with HST. I would really study the stat certificate and anything else you can get your hands on before making an offer. The space is gorgeous, but that $719 a month needs to be justified, as it’s only going to go higher.

By: Aguduser

Aguduser — Thu, 28 Jan 2010 20:36:51 +0000

Also, if you do decide to go for it for both purposes, don’t put all your money into the down payment. It would just reduce your monthly payment a little bit; but as an investor, you don’t put all you have in one investment, do you?

By: Aguduser

Aguduser — Thu, 28 Jan 2010 20:30:25 +0000

Okay, David, here it goes:

You like this unit! The question is: should you go for it?

1. If you think of it only as a move up for your main residence, the question is simple: with your current income, can you afford $2340 a month for this?

It sounds like it’s currently a weak “Yes”.

2. If you think of it as an investment, let’s suppose a client of yours, Ken, has an eye on this unit. He told you that he likes the location, the building, and the unit itself. The price seems okay too. He has a good chunk of money for the down payment, and he also already found a person who is willing to pay $2340 a month to rent it. That would cover his monthly cost. He’s hoping that this unit will gain good appreciation in the next few years, and that’s the main reason for this investment. As his trusted agent, would you advise him to go for it?

It sounds like you haven’t thought much of it this way. Give it some more thoughts. Evaluate the unit as an investment.

3. Now back to your situation, if you think of it as both the move-up residence and an investment, a “Yes” for the second question would be a strong support for the weak “Yes” of the first question. As you can always switch the two purposes: get the place, live in it, see if you like it. If you later realize that it’s a little beyond your means, or you just don’t like it, treat it like an investment, and move back to your old place, or if you’ve already sold that, get another one that suits your need.

When I say “treat it like an investment”, I mean if you do make that decision to switch the purposes down the road, treat it like any other investments of yours. You can sell it right away, or keep it rented until you can sell it for a profit. If you’re confident that it would be a profit, no matter how small, I think you’ll be okay. Or even if it would be a small loss, it might be as well worth a try. After all, if you don’t take the risk, how would you know what would be in store for you?

Note: when you think of it as an investment, the high condo fees might be a bit of an obstacle for resale, though.

Hope it helps.

By: DEW

DEW — Thu, 28 Jan 2010 17:22:40 +0000

GO FOR IT!! It sounds like your living beneath your means right now. it this condo is as rare as you say then you might not get another chance!

By: BobbyV

BobbyV — Thu, 28 Jan 2010 16:29:36 +0000

ummm, yes ….. personally i would not consider anything less than 600 sq ft as it would be way too cramped but going to a 1100 sq ft is pretty extreme. Unless you’re getting married and planning kids in the next few years then i”d pass. Also, that maintenance is killer. Imagine all the other options you have if you put that $800 elsewhere every month ….. you can do a lot more.

By: JG

JG — Thu, 28 Jan 2010 13:48:10 +0000

I think the unit is great and looks amazing! Easy to find on MLS! Maybe I am cheap, or have pre-conceived ideas of maintenance fees should be, but that $720 is a hard bit to come to terms with. Especially if there are no amenities. Not that the bulk of people use them, but a nice pool table would come in handy once in a while.
On the re-sale issue, how many buyers would want to stomach that maintenance fee. Again, maybe I am just cheap but it could be an issue down the way. And what about future potential appreciation - it didnt increase that much since the existing buyer purchased it. can you get a similar cost property elsewhere with greater appreciation to help facilitate your next residence purchase when time comes to move on? (think that might be a run on sentence)
Anyhow, those are my quick thoughts on the matter. Best of luck with this one.