Apartments vs. Condos | Renting vs. Owning

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min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:03 am

mnmike wrote:
min-chi-cbus wrote:IMO condos don't make a ton of sense in moderately-priced (or especially cheap) markets, including Minneapolis. The purpose of a condo, to me, is to be able to have an equity stake in your apartment because you can't afford to purchase a home (or don't want to live THAT far away from your office). This makes sense in places like New York or San Francisco where SFH ownership is impossible within the city limits and not everybody wants to rent indefinitely. It provides an alternative investment option to folks who have few/no options. In Minneapolis, you CAN own a home for a VERY modest price....and IN the city, close to downtown if preferred. So I don't always see the point beyond a few people who don't care to take care of their own lawns, maintenance, etc. I get that part.
What are you talking about? Condos run pretty much the same price point as houses...plus association fees.
Exactly....why have less space for the same price (plus association fees)? It makes sense in some markets more than others. I feel like you didn't understand the post...

mnmike
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby mnmike » August 24th, 2012, 9:07 am

Well condos already exist here and are more expensive than their apartments in many cases, so it is pretty much a moot point as to whether or not they "make sense". haha. I think it is better to gain equity when possible, so I would certainly buy if I could afford to, but I couldn't afford a condo similar to my apartment. It makes a lot of sense to buy if you are smart about it, and the market works in your favor. You could potentially walk away with tens of thousands of dollars more than you had to start with 20 years down the road from a condo...with an apartment, you have nothing. Certainly better to buy if you ask me. Of course, it can work against you as it did after the crash we are recovering from, so it can be risky!
Last edited by mnmike on August 24th, 2012, 9:11 am, edited 2 times in total.

Tyler
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby Tyler » August 24th, 2012, 9:08 am

mplsjaromir wrote: Mortgage Interest Deduction is a regressive tax deduction. The more expensive the home you buy the larger the tax break. I think most people take into account tax implications when making major financial decisions.
Yes, I get it. You really think this is the only reason people choose a condo over an apartment?
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min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:10 am

mnmike wrote: Anyway, to say there is no place for condos is just silly, and the comment about condos being only for those who can't afford homes(really it should say houses, because condos are homes) is also very silly. Even in Minneapolis I can afford an apartment I like, but I can't afford a condo of the same caliber, if I could, I would buy so I would have a stake. Sure, I could but a house in North Minneapolis, but do I want to live there? Do any of the potential downtown condo buyers want to? They are just another option. Not everyone wants a yard with maintenance.

Min-chi-bus-I had your point confused for a minute there...I get what you are saying about bigger more expensive cities, but I still don't see that being a good argument for condos not making sense. My friends in Chicago could have rented or gone condo within the same neighborhood, for the same (very high)price, and they decided to buy, so they could (hopefully) gain equity.
You really don't seem to understand what the point I was trying to make was. Condos were DESIGNED precisely because people wanted equity in their "homes" but couldn't necessarily afford a SFH (or didn't want one in a city that didn't have any to offer in the CBD, like SF or NYC). So when condos sprout up in cities like Minneapolis, where SFH's surround the CBD on all sides and SFH living is cheap or especially comparable to renting, condos seem much less necessary BECAUSE you are paying roughly the same price you would for a SFH but get much less space, share walls, no yard often times, etc. I DO realize that there are benefits to multi-family living that outweigh those costs, but I feel like those benefits are maximized in cities where the median home value is MUCH higher (like said SF or NYC) where I may want to have equity in my home but it may not ever make sense to own a SFH.

Is this making more sense? Am I just not being clear enough?

mnmike
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby mnmike » August 24th, 2012, 9:14 am

Doesn't really matter if it makes sense here or not, the realities of the market are what they are, and the prices are what they are...so I am pretty much saying...with things as they are, why would it be better not to buy? Also, someone who wants a condo isn't going to buy a single family home if they can help it, and vice versa. But I digress...we aren't going to understand eachother:) And perhaps this should be spilt to it's own thread...sorry for getting off topic!
Last edited by mnmike on August 24th, 2012, 9:21 am, edited 2 times in total.

min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:25 am

mnmike wrote:why would it be better not to buy?
There is a train of reasons, most of which I can't get into right now and most of which I am not educated enough on to be able to explain very well. For one, you could reinvest the extra premium you pay to have equity in your home (the deduction you usually would see in renting vs. buying, if you could see every expense itemized) in any other asset and the chances are you could beat the long-run yield on ownership, which is between 2% and 4%. Another reason is that maintainance for housing is extremely expensive and often isn't considered into the total cost of home ownership. Over the 30 year life of a loan, the house may cost $300K for example; interest would be another $300K with even a low APR of about 5%; yearly maintenance could easily be $1K-$2K on average, or $30K-$60K over the life of the loan; depreciation for supplies and appliances should also be considered vs. renting because when you rent you don't have to replace those things on your own. In the end, you pay MUCH more than the sticker price for your home than you ever would a rental, and chances are you may not even own your home outright anyways, especially if you move, refinance, etc. Many retirees do NOT own their homes or are even close to owning their homes in many cases. Even if you DID keep your mortgage for the 30 years and pay off the home, the interest deduction you get through taxes would be a tiny fraction of what it was when you first started the mortgage because of how amortization tables work (interest-heavy up front, principal-heavy towards the end). Other intangibles (can't put a price tag on or aren't physical assets) include not being able to move freely, not being as liquid, job security becomes much more important with home ownership, and there is always the chance that the value of your home could be LESS than it was when you purchased it, especially lately.

None of this is to say that I don't like home ownership or would never buy a home -- I probably will someday -- but to say that it's "silly" to rent vs. buy or that buying has some amazing investment advantage over renting is equally silly. Condos seem to be a compromise between owning and renting, but it seems like an even lesser advantage to the home owner than either, personally. Again, this is not to say that condo ownership isn't right for some people in some situations in some cities (or even me).....it really all depends on a number of factors that are just too large to list.

min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:27 am

Tyler wrote:min-chi-bus, I don't get why you keep equating a downtown condo in Minneapolis to a single family home nearby as if they are equivalent. IF we were truly talking about the exact same neighborhood you might have a point, but that is clearly not the situation here.
We're talking about the options a buyer faces in the marketplace, not a vaccuum that you make up for simplicity sake. In a marketplace, you have choices. In some markets in NYC, Tokyo, Hong Kong, Paris, London, etc. you really have few choices if location is important, so it's really condo vs. rental in those cities, but not Minneapolis (nowhere in the city are you too far away to commute easily to work, for example, like you may be in SF, NYC, HK, etc. In those cities a SFH might literally be affordable 30 miles away from work).

mplsjaromir
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby mplsjaromir » August 24th, 2012, 9:30 am

Tyler wrote:
mplsjaromir wrote: Mortgage Interest Deduction is a regressive tax deduction. The more expensive the home you buy the larger the tax break. I think most people take into account tax implications when making major financial decisions.
Yes, I get it. You really think this is the only reason people choose a condo over an apartment?
Logically it is. But like you said some people have an attachment to the idea of home ownership. Which I think stems from REALTORS® and their marketing. There are times when owning a condo can be a better economic decision than renting an apartment and vice versa. There are many investments classes that outperform real estate. And some people love customizing their homes, which can be hard to do in a rental. But is actually common in places like Germany where renting is more prevalent.

Your anecdotes that ownership communities are vastly superior to a similar community of renters is unconvincing. I think you are mistaking what causes the conditions you are seeing. You may have lived in less expensive housing then went to a place that required more money to occupy, so you saw a more upscale resident. Just because someone does not own does not mean they do not care, just because someone owns mean they care.
Last edited by mplsjaromir on August 24th, 2012, 9:32 am, edited 1 time in total.

Tyler
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby Tyler » August 24th, 2012, 9:32 am

Distance to work is not the only factor. Some people want to be in the heart of it. Walkable to work, restaurants, shopping, etc. They like the urban environment. To think if people weren't buying a condo in the mill district they'd be buying (or even looking at) a home in Stevens Square or St. Anthony is erroneous, IMO.
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min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:35 am

Tyler wrote:Distance to work is not the only factor. Some people want to be in the heart of it. Walkable to work, restaurants, shopping, etc. They like the urban environment. To think if people weren't buying a condo in the mill district they'd be buying (or even looking at) a home in Stevens Square or St. Anthony is erroneous, IMO.
In one ear and out the other.....glad that's what you got from what I've said so far. I never said distance to work was the only factor, and I'm sorry I even used it as an example.
Last edited by min-chi-cbus on August 24th, 2012, 9:39 am, edited 1 time in total.

Tyler
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby Tyler » August 24th, 2012, 9:38 am

mplsjaromir wrote: Logically it is. But like you said some people have an attachment to the idea of home ownership. Which I think stems from REALTORS® and their marketing. There are times when owning a condo can be a better economic decision than renting an apartment and vice versa. There are many investments classes that outperform real estate.
Jesus is this condescending. So it's either a purely financial decision or it's brainwashing. I think you've nailed it. :roll:
mplsjaromir wrote: Your anecdotes that ownership communities are vastly superior to a similar community of renters is unconvincing. I think you are mistaking what causes the conditions you are seeing. You may have lived in less expensive housing then went to a place that required more money to occupy, so you saw a more upscale resident. Just because someone does not own does not mean they do not care, just because someone owns mean they care.
Not really discounting this. And I am not making sweeping generalizations about all people or all buildings. I do believe owners are more likely to "care." I "care" more now than I did as a renter.
Towns!

mnmike
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby mnmike » August 24th, 2012, 9:39 am

You are not understanding what I am saying either with regard to the discussion about location/pricing/cost...your whole argument is hypothetical. It doesn't matter if having condos "make sense" in the grand scheme or not in Minneapolis, that is a different argument. Some others are talking about the here and now conditions of the market and whether or not it is better to buy...not a world where none of the current rules apply and we could start over! Anyway, good discussion...interesting.
Last edited by mnmike on August 24th, 2012, 9:53 am, edited 8 times in total.

Tyler
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby Tyler » August 24th, 2012, 9:40 am

min-chi-cbus wrote:
Tyler wrote:Distance to work is not the only factor. Some people want to be in the heart of it. Walkable to work, restaurants, shopping, etc. They like the urban environment. To think if people weren't buying a condo in the mill district they'd be buying (or even looking at) a home in Stevens Square or St. Anthony is erroneous, IMO.
In one ear and out the other.....glad that's what you got from what I've said so far.
LOL. What? I am just saying there are other factors.
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min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:41 am

Tyler wrote:
mplsjaromir wrote: Logically it is. But like you said some people have an attachment to the idea of home ownership. Which I think stems from REALTORS® and their marketing. There are times when owning a condo can be a better economic decision than renting an apartment and vice versa. There are many investments classes that outperform real estate.
Jesus is this condescending. So it's either a purely financial decision or it's brainwashing. I think you've nailed it. :roll:
mplsjaromir wrote: Your anecdotes that ownership communities are vastly superior to a similar community of renters is unconvincing. I think you are mistaking what causes the conditions you are seeing. You may have lived in less expensive housing then went to a place that required more money to occupy, so you saw a more upscale resident. Just because someone does not own does not mean they do not care, just because someone owns mean they care.
Not really discounting this. And I am not making sweeping generalizations about all people or all buildings. I do believe owners are more likely to "care." I "care" more now than I did as a renter.

I think he's referring to the notion that the Fed has been pushing this "a 2-car garage and white picket fence in the suburbs" crap on U.S. citizens for too long now, and as a result may have indirectly caused this obsession with homeownership = better in this country.

I also am of the mindset that when you own something you take better care of it. Whether or not that makes better communities is debatable, but I think it probably does.

min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:42 am

Tyler wrote:
min-chi-cbus wrote:
Tyler wrote:Distance to work is not the only factor. Some people want to be in the heart of it. Walkable to work, restaurants, shopping, etc. They like the urban environment. To think if people weren't buying a condo in the mill district they'd be buying (or even looking at) a home in Stevens Square or St. Anthony is erroneous, IMO.
In one ear and out the other.....glad that's what you got from what I've said so far.
LOL. What? I am just saying there are other factors.
I never said that commuting was the only factor. When did I EVER state that? I think you conjured that up on your own! I simply used that as an example, probably because I was referencing cities like NYC of SF where people would be commuting for hours if they didn't live IN the city.

min-chi-cbus
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby min-chi-cbus » August 24th, 2012, 9:46 am

mnmike wrote:You are not understanding what I am saying either with regard to the discussion about location/pricing/cost...your whole arguments is hypothetical. It doesn't matter if it makes sense or not in Minneapolis, that is a different argument. Some others are talking about the here and now conditions of the market and whether or not it is better to buy...not a magical world where none of the current rules apply!
I gave you a whole mini thesis on whether or not it's better to rent or buy....did you miss it (or read it)? Do you want to argue about THAT and not something that doesn't apply whatsoever? I don't know where you and Tyler come off sometimes.....where do you come up with this crap: "magical world where none of the current rules apply"? What is that comment based off of?

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Re: Nicollet Residences - (455 Nicollet Mall)

Postby Tyler » August 24th, 2012, 9:48 am

min-chi-cbus wrote: I never said that commuting was the only factor. When did I EVER state that? I think you conjured that up on your own! I simply used that as an example, probably because I was referencing cities like NYC of SF where people would be commuting for hours if they didn't live IN the city.
No. But you have been implying that it is the only legitimate reason to buy a condo. I'm saying there are potentially other factors that the buyer feels are as or more important.
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Re: Nicollet Residences - (455 Nicollet Mall)

Postby mnmike » August 24th, 2012, 9:51 am

I rephrased the last post to better make my point. Anyway, not trying to get personal here...just having a discussion. It seemed like you kept going back to whether or not we should have condos in the first place. I did read your post about renting/buying...it still didn't really sway me. I think it is better to buy in a most cases if you have the resources, but not all for sure! Renting makes sense sometimes, I think it does for me, and what I want. Anyway, your initial post, I misunderstood at first, so I think we got off on a spur! Hopefully the mod can split this to a different thread. Anyway, I guess we both probably agree that renting makes sense sometimes, and buying makes sense sometimes. I just don't agree with the whole condos not making sense in Minneapolis.

PS, I'm sorry, I didn't mean to make this pick on Min-chi-bus day! haha. And again, sorry this got so far off topic...can you split it off Elf?

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Nick
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Re: Renting vs. Owning

Postby Nick » August 24th, 2012, 10:52 am

Now remember everyone, you are on the Internet, so remember to take things personally for no reason and TYPE IN ALL CAPS about how angry you are.

Tyler
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Re: Renting vs. Owning

Postby Tyler » August 24th, 2012, 10:59 am

Nick wrote:Now remember everyone, you are on the Internet, so remember to take things personally for no reason and TYPE IN ALL CAPS about how angry you are.
Hmm... is this preemptive? I don't see anyone taking things personally and typing in all caps. Yet.
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