Apartments vs. Condos | Renting vs. Owning

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MNdible
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Re: Downtown Minneapolis General Topics & Development Map

Postby MNdible » December 1st, 2015, 12:10 pm

$153K for a condo in one of the best locations in town, and people are complaining about old appliances and carpet?

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Sacrelicio
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Re: Downtown Minneapolis General Topics & Development Map

Postby Sacrelicio » December 1st, 2015, 12:18 pm

MNdible wrote:$153K for a condo in one of the best locations in town, and people are complaining about old appliances and carpet?
The exterior and common spaces are dated too and I wouldn't want to take out a mortgage on a place like that, probably won't go up in value much if at all.

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Re: Downtown Minneapolis General Topics & Development Map

Postby twincitizen » December 1st, 2015, 12:19 pm

These (and "The Towers", etc.) make a strong argument against building studio/small/lower-end condominiums. They seemingly, inevitably fall into disrepair. The percentage of absentee owners (renting their units out) only goes one direction over the years - up. That's not a knock against renters (I am one), but a simple statement that non-resident condo owners are quite unlikely to put money into renovations. If I lived in a large condo building, I would be opposed to long-term rentals. A prohibition on renting a unit out more than 5 consecutive years seems like a good rule for large condo associations.

I have no idea how you'd structure it legally (or financially), but if any large condo building becomes more than 50% rental units, there should be an established process for conversion to apartments with a single owner.

MNdible
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Re: Downtown Minneapolis General Topics & Development Map

Postby MNdible » December 1st, 2015, 12:52 pm

Sacrelicio wrote:The exterior and common spaces are dated too and I wouldn't want to take out a mortgage on a place like that, probably won't go up in value much if at all.
"Dated" is obviously a subjective term -- I think the exterior of this building actually looks pretty good, certainly better than a lot of what came out of the 80's. And it's recently undergone significant maintenance.

As for the value going up -- so what? Have you done the math on a $153K mortgage? Even if this thing is eventually worth zero dollars, you've still saved money every single month over renting, even assuming a hefty association fee. Maybe you even get an interest deduction out of the deal.

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Sacrelicio
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Re: Downtown Minneapolis General Topics & Development Map

Postby Sacrelicio » December 1st, 2015, 1:16 pm

MNdible wrote:
Sacrelicio wrote:The exterior and common spaces are dated too and I wouldn't want to take out a mortgage on a place like that, probably won't go up in value much if at all.
"Dated" is obviously a subjective term -- I think the exterior of this building actually looks pretty good, certainly better than a lot of what came out of the 80's. And it's recently undergone significant maintenance.

As for the value going up -- so what? Have you done the math on a $153K mortgage? Even if this thing is eventually worth zero dollars, you've still saved money every single month over renting, even assuming a hefty association fee. Maybe you even get an interest deduction out of the deal.
I can see an argument for it, it's cheap and centrally located, but I wouldn't live there, plus someone would probably want to move at some point and might have a hard time selling it. It's been on the market for a couple months and the price has gone down.

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Re: Renting vs. Owning | Apartments vs. Condos

Postby mattaudio » December 1st, 2015, 1:32 pm

How much would it cost to flip 771SF? Maybe $20,000 to make this place look legit. I'm with MNdible on this one. The only downside is a $420/mo HOA, but I have to imagine that's par for the course downtown.

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Re: Renting vs. Owning | Apartments vs. Condos

Postby RailBaronYarr » December 1st, 2015, 2:25 pm

$420/mo HOA includes: Heating, Snow/Lawn Care, Outside Maintenance, Hazard Insurance, Cable TV, Water/Sewer, Building Exterior, Security Staff, Security System, Professional Mgmt, Shared Amenities, Parking Space.

Now, I know many people don't have gym memberships or pay people to shovel their snow. Some have even cut the cable cord. But heat, water/sewer, insurance, exterior maintenance, and parking are things people pay for in cash or baked into their SFR mortgage. At $150k with a 3.5% down payment, your monthly bill is about $1,500/mo including nearly everything but electricity & internet (I estimated property taxes at $2k/yr). You get a balcony with a view, some decent outdoor shared space, and the unit really is not that dated (bad carpet, shelves, counters/cabinets - but I've seen WAY worse). All in the thick of downtown. As Mndible says, even if you take a huge loss and include paying selling/closing costs in a couple years, you likely still make out way better than renting, especially when taking into account the interest deduction and property tax exemption.

tl;dr: filtering works

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Re: Renting vs. Owning | Apartments vs. Condos

Postby min-chi-cbus » December 1st, 2015, 4:33 pm

^Are you including the HOA in that $1,500 figure?

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Re: Renting vs. Owning | Apartments vs. Condos

Postby mattaudio » December 1st, 2015, 4:36 pm

I have to imagine he is. I PITIcalced a $144k note on a $150k purchase at 3.5%, assuming $2000 tax and $500 insurance. $854.95 a month. Which would be all-in for $1275/mo after adding in HOA. RBY's assumptions must have been much more conservative than mine.

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Re: Renting vs. Owning | Apartments vs. Condos

Postby go4guy » December 1st, 2015, 5:42 pm

mattaudio wrote:I have to imagine he is. I PITIcalced a $144k note on a $150k purchase at 3.5%, assuming $2000 tax and $500 insurance. $854.95 a month. Which would be all-in for $1275/mo after adding in HOA. RBY's assumptions must have been much more conservative than mine.
With only 3.5% down, would have to go FHA which would add Mortgage Insurance as well. Still, that is a steal of a deal.

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Re: Renting vs. Owning | Apartments vs. Condos

Postby QuietBlue » December 2nd, 2015, 8:32 am

What do people have against shelves? Yeah, it has a lot, but they're very useful for maximizing storage in a small space.

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Re: Downtown Minneapolis General Topics & Development Map

Postby QuietBlue » December 2nd, 2015, 8:35 am

MNdible wrote:$153K for a condo in one of the best locations in town, and people are complaining about old appliances and carpet?
Wait, you mean people can update things they don't like in a home? That's just crazy talk. :D

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Re: Downtown Minneapolis General Topics & Development Map

Postby amiller92 » December 2nd, 2015, 10:26 am

Sacrelicio wrote:
MNdible wrote:$153K for a condo in one of the best locations in town, and people are complaining about old appliances and carpet?
The exterior and common spaces are dated too and I wouldn't want to take out a mortgage on a place like that, probably won't go up in value much if at all.
They re-did the lobby/entryway a few years ago and I think they did some work on the pool deck too (never actually been out there).

That unit has a ton of upside.
Last edited by amiller92 on December 2nd, 2015, 10:32 am, edited 1 time in total.

amiller92
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Re: Renting vs. Owning | Apartments vs. Condos

Postby amiller92 » December 2nd, 2015, 10:30 am

mattaudio wrote:How much would it cost to flip 771SF? Maybe $20,000 to make this place look legit. I'm with MNdible on this one. The only downside is a $420/mo HOA, but I have to imagine that's par for the course downtown.
That's pretty low, actually.

I looked at 2 bedrooms in this building several years ago. Units are all over the map in terms of how and when they've been renovated. The ones that have been updated obviously sell for a lot more than those that haven't.

Heck, that was true in the building we just moved out of too. Finding one with original kitchens and bathrooms is fascinating and the sellers are probably losing money by selling before renovating.

mattaudio
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Re: Renting vs. Owning | Apartments vs. Condos

Postby mattaudio » December 2nd, 2015, 10:37 am

So, how about us UrbanMSPers pool some cash to flip this condo?

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Re: Renting vs. Owning | Apartments vs. Condos

Postby EOst » December 2nd, 2015, 10:44 am

QuietBlue wrote:What do people have against shelves? Yeah, it has a lot, but they're very useful for maximizing storage in a small space.
They would actually be pretty nice for someone with a big library.

winterfan
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Re: Renting vs. Owning | Apartments vs. Condos

Postby winterfan » December 2nd, 2015, 12:33 pm

I could work with the 80's condo. I don't think it would even be that expensive. The big drawback for me is the first floor location. My guess is that a lot of other women would be turned off by that as well.

min-chi-cbus
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Re: Renting vs. Owning | Apartments vs. Condos

Postby min-chi-cbus » December 2nd, 2015, 2:10 pm

There can be benefits to a first floor....for example my buddy has an expansive backyard/courtyard where he can grill or chill. Kinda the best of both worlds (urban living with suburban green space).

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Nathan
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Re: Renting vs. Owning | Apartments vs. Condos

Postby Nathan » December 2nd, 2015, 3:07 pm

This isn't a 1st floor unit... it's on the 4th floor with access to the building's amenity deck.

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Re: Renting vs. Owning | Apartments vs. Condos

Postby winterfan » December 2nd, 2015, 3:32 pm

Nathan wrote:This isn't a 1st floor unit... it's on the 4th floor with access to the building's amenity deck.
Oops- I stand corrected. I assumed that was a pic first floor patio and didn't saw the 121 and must have assumed it was the condo #.


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