Whadya Think??
Okay, so this is the place Benn and I are thinking about.
Vital Stats: 1000 square feet. 3 Bedrooms, two stories, one full bath. Laundry ensuite. Large storage space. Individual hot water heater. Electric baseboard heating. New laminate flooring, new carpets, newly painted walls, new light fixtures, newer appliances, newly painted cabinets. Complex allows two dogs or cats and any number of birds. Child friendly. Tire-Horse swing steps from front door. Indoor pool in complex. Minutes walk to local shopping district which includes an Italian Gelato place, an Irish pub, a Kin's Farm Market, a toy store, and many other quaint shops and useful amentities.
Asking price a good 10,000 dollars below last assessment value.
The catch? The complex, which contains over 300 units spread over several streets, is a good 30 years old and the roofs and foundations are in desperate need of repair in many of the buildings. Since the owners of the townhouses wouldn't pony up the 3,000 bucks each it would take to fix all these problems, the strata council, after much hemming and hawing, had to hike the maintenance fees to over 300 dollars a month. That would be 300 dollars on top of our mortgage which doesn't include any of our bills. It includes maintenance of the grounds, use of the pool, and fixing all those roofs and foundations to keep the place habitable. The renovations are being done on an as-needed basis, with the worst being fixed first. In the mean time, you had better hope the roof doesn't collapse over your head. Our realtor (who is Jackie's Dad and we trust) says that once these problems are fixed, this place would be worth at least $240,000 instead of the $223,000 current asking price. Not to mention the housing market can only really go up from here. Plus when they put in the skytrain, this area will be only half an hour transit to downtown or anywhere else, instead of the current hour and a half transit time. So it's a good investment opportunity if we're willing to take the risk of our floor falling out beneath us. Obviously, if we bought this place we would make it conditional to an inspect of our own building, and we could back out if it turned out that our own building was on its last legs. Dick says we would also hold back 5,000 from the mortgage on the condition that if we got hit by a big assessment, the previous owner (another realtor who buys investment properties, renovates, and then sells) would cover it from that set-aside money.
So really the big question is, can we afford those maintenance fees, with electricity and water and phone and internet on top of that? And do we want to? Is it worth it?
Dick's going to get the electric bills for the last few years on this place, and he is going to get a copy of the strata council meeting minutes for the last two years so we can get all the details. He knows people. Once we know what our bills are likely to be like, and exactly how much work needs to be done, and what the chances are that we'll be asked to pony up even more dough (it seems impossible to use any term other than "dough" when following the expression "pony up the ---") and so on. We can make a decision then. Benn the banker is obviously concerned about our budgeting. Can we afford it? Yes, probably. Can we afford it comfortably, and will we still be able to afford it if I go on maternity leave? Is it worth the investment of the high maintenance fees for a property that is very likely to go up dramatically in value? Is this a better thing to do than just buying a two bedroom condo somewhere? These are the questions.
Vital Stats: 1000 square feet. 3 Bedrooms, two stories, one full bath. Laundry ensuite. Large storage space. Individual hot water heater. Electric baseboard heating. New laminate flooring, new carpets, newly painted walls, new light fixtures, newer appliances, newly painted cabinets. Complex allows two dogs or cats and any number of birds. Child friendly. Tire-Horse swing steps from front door. Indoor pool in complex. Minutes walk to local shopping district which includes an Italian Gelato place, an Irish pub, a Kin's Farm Market, a toy store, and many other quaint shops and useful amentities.
Asking price a good 10,000 dollars below last assessment value.
The catch? The complex, which contains over 300 units spread over several streets, is a good 30 years old and the roofs and foundations are in desperate need of repair in many of the buildings. Since the owners of the townhouses wouldn't pony up the 3,000 bucks each it would take to fix all these problems, the strata council, after much hemming and hawing, had to hike the maintenance fees to over 300 dollars a month. That would be 300 dollars on top of our mortgage which doesn't include any of our bills. It includes maintenance of the grounds, use of the pool, and fixing all those roofs and foundations to keep the place habitable. The renovations are being done on an as-needed basis, with the worst being fixed first. In the mean time, you had better hope the roof doesn't collapse over your head. Our realtor (who is Jackie's Dad and we trust) says that once these problems are fixed, this place would be worth at least $240,000 instead of the $223,000 current asking price. Not to mention the housing market can only really go up from here. Plus when they put in the skytrain, this area will be only half an hour transit to downtown or anywhere else, instead of the current hour and a half transit time. So it's a good investment opportunity if we're willing to take the risk of our floor falling out beneath us. Obviously, if we bought this place we would make it conditional to an inspect of our own building, and we could back out if it turned out that our own building was on its last legs. Dick says we would also hold back 5,000 from the mortgage on the condition that if we got hit by a big assessment, the previous owner (another realtor who buys investment properties, renovates, and then sells) would cover it from that set-aside money.
So really the big question is, can we afford those maintenance fees, with electricity and water and phone and internet on top of that? And do we want to? Is it worth it?
Dick's going to get the electric bills for the last few years on this place, and he is going to get a copy of the strata council meeting minutes for the last two years so we can get all the details. He knows people. Once we know what our bills are likely to be like, and exactly how much work needs to be done, and what the chances are that we'll be asked to pony up even more dough (it seems impossible to use any term other than "dough" when following the expression "pony up the ---") and so on. We can make a decision then. Benn the banker is obviously concerned about our budgeting. Can we afford it? Yes, probably. Can we afford it comfortably, and will we still be able to afford it if I go on maternity leave? Is it worth the investment of the high maintenance fees for a property that is very likely to go up dramatically in value? Is this a better thing to do than just buying a two bedroom condo somewhere? These are the questions.