Secrets of the City

$500/month is high. This new construction, for example, is $150/month (and right by the Midtown Greenway).

It’s not always the association fee either.

I have a friend who owns a condo in SLP and they are assessing each unit $16,000 for new siding, windows and garage repairs. So an older place isn’t immune to high fees.

Yeah are you really looking to buy at the Nicollet? If you can afford 3-4 hundred $ a square foot I wouldn’t think 500 a month association fee would hurt (especially when you figure in what it covers..gym membership etc). I have a nice place (Franklin Lofts, 1st and Franklin). Over 1k sq ft, around 240k, and my association fee is only 220. This covers 45$ towards my cable and also pays for garbage and sewer and covers a lot for insurance (so my own insurance is cheaper). Figure in I don’t have to shovel or mow and I think it is a bargain.

Interesting thought, Tuble, but unfortunately, a lot of people looking to buy a place downtown aren’t necessarily loaded. Many just have a ton of equity in their current home and are using it to buy up. That association fee is a killer for people like that.

“Figure in I don’t have to shovel or mow and I think it is a bargain.”

$400 to $500 a month? For that, I’d remove snow and mow your yard,

richg – I agree, but there are options out there for them as well, they just need to find a development without a pool, valet, gym etc. Harder to find but they are out there. I was just responding to the OP. He/she was listing association fee’s at places it didn’t sound like were realistic options for them to buy at anyway.

Rat: did you read my post? Mine is $220. For the extra 280-380 that you reference would you build me a pool and gym, maintain them, and either be a person valet/doorman for me or hire one? After you figure in cable, water/sewage, and insurance, building maintenence, the shovel/snow portion is more like 50-75$ a month…which you could easily get from houses that hire it out.

You’re right about some places — the pool, valet, gym, etc. all cost money. But others are patently ridiculous. I’ve seen $400 and $500 association fees that include heat, outdoor maintenance, and that’s about it. I’m very curious to see what happens with those fees, not to mention the condo market as a whole, now that our housing market is slowing way the hell down.

When I was condo-shopping, I was told that association fees should run about .1% of the purchase price per month, on average. You can use that as a baseline to determine if the fees seem high. For example, on a $269k condo, I’m paying $242 in fees, so a little less than the average. Tublecane’s fees also fit that pattern. Do look at what the fees include — mine also covers cable, water, sewer, snow removal, landscaping, insurance, etc., so it doesn’t seem so high when I’m paying less in my other monthly bills.

Forgo a little luxury and buy in an old-skool co-op. My monthly fees just $200.

The condo market is getting softer every month. Just keep renting until the market collapses/stabilizes.

P.S.: My association fee is $235. We do our own yardwork and snow removal. What are we paying for? Electricity and heat. It’s very expensive in the winter.

richg – I agree very interesting to see where things will go…I obviously am heavily invested in the outcome, seeing that I don’t plan on condo living for more than 3 or 4 years before I want a house and the benefits/headaches that come with it. Also agree some places are patently ridic and also some places go up a lot the first few years, that is why it is important to get a lot of info on the association (budget, funds on hand, building condition..is it going to need a new roof soon if not new? etc). Just pointing out like cdesmith that there are plenty of options out there. Just across the streat from me eat street flats is a nice option for something with a lot of new amenities and not much association fees. There are lots of options like this I could list many more in both more expensive options and also more expensive.

All I know is it’s much cheaper to rent a loft in northloop than it is to mortgage a condo + the association fees.

The traditional “renting is throwing away $” argument doesn’t always work. I’m paying pretty what I would pay for a condo every month, plus I have the option of leaving whenever I want.

I know I’m not gaining any equity, but “urban condos” these days are a really really bad deal.

If you’re looking for value, the only place you’re going to find it is in the suburbs or a dumpy place.

If you are disciplined enough to save that difference in what rent versus buying would be and invested it you would probably be much better off especially with the current state of the housing bubble.

Oh I’m not disciplined, I’m living at the “top of my means” right now in northloop. But it seems like there must be plenty of others doing the same – everyone else here is so young! Maybe mommy and daddy are helping a lot of them…..

But I agree, renting and investing the difference would be a good plan

While I can swing the apartment there’s absolutely no way I’d be able to afford a condo here. I love the neigborhood, except for the twats that think yelling drunkenly at the top of your lungs at 2:30 AM in a mostly-masonry building (or outside those buildings) is a good idea.

Don’t be fooled by low association fees with new construction, those fees will go up substantially after a year or so. The builders keep them low at first as a selling point.

Also, association fees cover a lot more than just snow removal and lawn mowing. They cover the cost of building maintenence, cleaning, security, etc and some of it is put into a reserve account to cover large building costs like a new water heater or a new roof.

But it seemed like such a good idea at the time…

Part of the deal with condos is that there is an association, and if you want to regulate the fees, special assessments, etc, you can be on the association.

$400-$500 is very high. If you look at places for sale under $200,000 most are not even close to being that high, they are in the $200-$300 range.

My association is in the $200s and the condo is for sale, if you are looking. Nicest condo in Seward!

Cary, I’m sort of in the same position, except I rent downtown. My boyfriend and I probably could afford to buy, except we don’t have anything saved for a down payment (I really don’t want to deal with an interest-only loan) and we’re both paying off some debt (cars + student loans). I also like to be able to call maintenance when there’s a plumbing leak rather than try to fix it myself or hire a plumber.

About a year and a half ago I had some coworkers telling me I was “throwing money away” and trying to pressure/guilt me into buying, but I held firm.

I wish the people who repeat that “renting is just throwing your money away” mantra would try applying that logic to food. Being ultimately left with nothing does not mean you have nothing to show for your purchase.

Oh I’m not disciplined, I’m living at the “top of my means” right now in northloop. But it seems like there must be plenty of others doing the same – everyone else here is so young! See previous thread.

My place, new and actually on the Midtown Greenway, has ass fees of about $150/month. Also keep in mind that a big fancy building like the Grant tower or the Nicollet cost a shitton to maintain, light, etc. Hence the fees will be much higher.

If you’re renting and thinking about buying, do the right thing: Buy what you can afford to buy when you can afford to buy it. You can’t time the market because you aren’t that smart and if you try to wait for the “bubble” to “burst” what you save in price you’ll probably lose with higher interest rates and that’s assuming that prices are going to fall anyway. They may just rise slower, which means you’ll have a higher price and higher interest.

I think it’s pretty obvious though that while some buildings are a lot to maintain, a lot of that fee is just going into someone’s pocket.

I guess if I were ever going to BUY, I’d want a place that I didn’t also have to pay “half rent” for on top of the mortgage payments.

$150/month is reasonable to me, if it were actually going to some useful services. However, I don’t think there’s any way to justify $400+ a month in association fees.

There are plenty condos around with low association fees. Two examples would be 3rd Avenue Place (only 3 units left) and the new Eat Street Flats. Both places the association fee is based on square footage and it’s cheep. Both of these condo buildings the association is about 150/month.

The only pocket that association fees should be going into would be the pocket of an association. Which is you.

When I lived in a condo loft in downtown Milwaukee, my wife was on the board. The biggest expense was insurance. Note that you don’t pay homeowners insurance in a condo, you simply insure the contents (a la renters insurance). That’s big. And heat is big too.

We get renter’s insurance for like $150/year?

How could that be such a big part?

Yes, renters insurance is cheap. Insuring the building and the common areas and the outdoor areas is not. The association fee covers that.

The problem is that in a lot of these new condo developments, the boards are being formed from a pool of first-time buyers who have no freaking clue or business sense elected based on some popularity contest. These condo associations will degrade into trashy rental properties in ten years.

Also, management companies are making money hand over fist from these idiots.

If you don’t get the condo docs which include the books and the annual budget, it’s against the law. You should look at them and if you don’t think they are fiscally responsible then you should take a pass on the property no matter how good a deal you think you’re getting.

We get renter’s insurance for like $150/year?

How could that be such a big part?

As DeRusha said, renter’s insurance is just to replace your possessions and maybe put you up in a hotel for a bit of your apartment goes up in smoke. The condo board has to insure the physical structure of the building to repair/replace.

Interesting discussion. We just bought a condo in downtown St. Paul after owning a house for 5 years. We got sick of the shoveling and mowing and worrying about basement flooding. We shopped around A LOT before deciding on my place, and researched and compared association fees many of the new developments are charging. It’s way more complicated than people think. Some charge by square foot, some by other formulas, but for a potential buyer or current owner, what it boils down to is the amenities you get back. Return on investment, if you will.

The place we bought was the most square footage for the lowest price – a big place for cheap. That’s the upside. The downside is, the association fees are higher here than other developments. We have almost no amenities; no heated underground parking, no swimming pool, no party room, no rooftop deck. And that’s fine. I can understand needing to chip in for common-area climate control, cleaning, electricity, elevator maintenence, and building up a solid ‘oh shit’ fund, but other than that it’s a crapshoot. Sure, I got a huge place for a cheap price, but I’m getting socked by the association fees. That’s the trade-off. I looked at a lot of places that were more expensive and smaller, and they had lower association fees.

We love our place but grumble about the association fees. It was either that or grumble about the higher mortgage payment. See? I figured the association fee would be a hell of a lot easier to change than my mortgage payment.

I totally agree with Not2Sure in saying that most of the new condo owners and association members are first-time owners who have almost NO financial savvy or guts about what the value of their fees are. We sit in a unique position because we owned before this and did extensive comparative research. I’ve attended a few of the association meetings at my condo and it’s a damn joke. It’s a mix of young hip types, divorcees and artists, none of who have any clue about what that 32 cents a square foot should be buying us. They piddle around with some ideas about building a deck, then go and have wine at the bar downstairs. I’ve tried to contribute some ideas, based on what I’d seen at other condo developments during my search, and they seemed to think I was being impolite. I’ve kind of given up. Meanwhile, we also just got smacked with our property tax bill, which we were expecting to be high but not THAT fucking high. I’m hoping everyone else in the building, especially the members of the association, got their tax bills too and are thinking twice about the association fee.

All of this goes on while the developer/co-owner of the building rakes in money from the two GIANT advertising billboards that adorn our roof. Whatever.

That being said, it will be interesting to see what happens over time with all these developments. Square footage values will fluctuate. Amenities will either be invaluable or totally never get used. Demographics will play a huge role in how the condo-owning world will be.

Look at it this way: How much would the amenities provided in your condo cost you per month outside the condo? Gym, etc. Granted, not everyone would have those anyway, but that’s one way of looking at it. I, for one, would factor in that I am not spending $47/month on a YW membership if my place had a gym.

When you sign a purchase agreement you are entitled to recieve the full documents of your association. READ THESE DOCUMENTS UNTIL YOU UNDERSTAND THEM. Mine numberd 400+ pages, and I read every word, including the statutory home warranty, which I’d already read before but read again anyway in light of everything else. If there is anything you object to you are allowed 10 days to back out. Taking the time is a lot better than finding out later when there’s nothing you can do about it. At your most machinationist, it’s always good to know the rules so you can know how to use them to your advantage.

For example, I found out that much of my dues do in fact go to insurance. Imagine the cost of insuring The Nicollet or the new Skyscape. I also stumbled across an illegal bylaw, saving a potential issue later on.

Buy a unit in an established building. The association will have a track record you can check. Best is an association made up of retired coots who used to be accountants and such. I bought a then-two-year-old suburban condo two years ago and don’t ever want to own a house again.

Buy a unit in a concrete building. Hard to find but worth it – even good wood frame construction isn’t a quiet as I’d like.

Don’t ever buy an apartment conversion.

With interest rates rising it’s tempting to sell the condo and rent, paying the rent from the interest earned from putting the condo sale money into CDs. But if inflation takes off and you rent you could be up the creek. Owning has the advantage of relatively fixed costs (unless you’re dumb enought to get a variable rate loan, that is).