Fargo Condos

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2007-10-30T00:29:00.001-07:00

Hunting for Condos in Fargo Market?

2007-09-27T10:56:00.000-07:00

House Hunting Tip: One of the most enticing reasons to buy a condominium rather than a single-family residence is that it provides a simpler, low-maintenance life style. If this is your goal, make sure that you'll actually be getting what you bargained for. Don't assume that your homeowner dues will take care of all exterior maintenance. You may even find variability within one complex. The dues in one phase might cover exterior paint and roof replacement, but not in another.

Before buying a condo, find out exactly what is covered in your homeowner association dues. Also, find out if there are owners who are delinquent in their dues, and find out how much the dues have been increased over time. In a new development, the initial dues assessment may not be realistic in terms of handling future problems. In older buildings that require a lot of upkeep, you may find that the homeowner's dues are exorbitant.

Investigate any pending litigation against the complex. If the project is new, check out the builder's reputation. Have homeowner's associations of other complexes he built sued him? How does he deal with routine complaints and requests for repairs?

Read the minutes of recent homeowner's association meetings to find out if there are issues you should be aware of. Is the reserve fund adequate to handle unexpected expenses? Or, should you anticipate further assessments to repair a tennis court or replace a furnace?

The Closing: It's a good idea to talk with several current owners to find out what they like and don't like about the complex. If the soundproofing is minimal, or the water pressure is low, you may want to consider buying elsewhere.

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Forget About Buying a Condo in Fargo Moorhead!

2007-09-01T20:41:00.000-07:00

Thinking about buying a new home in fargo moorhead, or investing in real estate? Forget about buying a condominium, and if you already own one, you have my condolences.

Most condos are small, and their tiny size allows for very low prices, which makes them attractive to college graduates, newlyweds, and others just starting out in life.27

It's a very attractive sales pitch — builders require very small down payments, and after factoring in the tax deduction, the mortgage is often as low as a rent payment. So (as you can read in every newspaper's weekend real estate section), why rent when you can own your own home? This is a tremendous tug on your desire to live The American Dream in fargo moorhead.

But that dream can turn into a nightmare.

First, consider the condo association fee. As the owner of one of the building's units, you're required to pay this fee, which covers the building's common areas and grounds. But unlike a mortgage, you never pay it off! (So much for the dream of owning your home with no payments.)

Second, the association fee is guaranteed to rise over time — simply due to inflation. Worse, many of those "common areas" are expensive to maintain, such as elevators, swimming pools and heating systems. As any long-time condo owner can attest, condo fees can rise dramatically. Thus, your condo fee actually can be more than your mortgage payment - and guess what: It's not tax-deductible!

Third, many condo buyers are first-time buyers, and they fully expect to "move up," perhaps after marrying and having kids. If that describes you, you're in for a big surprise: When you're ready to move, you probably won't be able to sell the condo for what you paid (and you almost certainly can forget about selling for more than you paid, despite promises from the builder or real estate agent). Why will the condo fall in price?

Because condo builders in fargo moorhead are continuing to build — so why should a prospective buyer choose your (old) condo in an even older building instead of a brand new condo in a brand new building? To find a buyer, you'll have to lower your price.

Even if new condos do not pose much of a competitive threat, two other problems do. For one, only Generation Xers, divorcees and retirees, are potential buyers (because of their often limited income). Therefore, unless there's dramatic salary growth among these demographic groups, your property cannot grow in value, or it'll exceed their ability to buy. After all, those who can afford to buy a town house or single family home almost certainly will (just like you would if you could afford to).

The second threat to your condo's value is, simply, all the other condo owners. Check out any building, and look at all the condos for sale or rent. With so many from which to choose, why would a buyer select yours? Since the floor plans are all identical, the only way to attract a buyer is to lower the price. This makes it hard for condos to maintain their value.

And it gets worse. For a buyer to qualify for a mortgage, your condo must be appraised. Since all the units are the same, the appraiser will simply compare your unit to other recent sales in the building. Say another tenant needs to sell in a hurry and therefore sells his condo for $15,000 less than what he paid. Guess what? This "comparable" will serve as the basis for the appraisal — and it could serve as the new pricing standard for the building, to the consternation of the other owners in the building.

Have you ever noticed that a lot of condo units in a given building are available for rent? Ask around, and you'll discover that many (even most) of the owners used to live there themselves - until they wanted to "move up" as you'll want to do. Why are they renting? Because they couldn't find a buyer, yet they needed to move and couldn't afford to let the condo sit vacant. Thus, they've become landlords, which leads us to the next problem

If you plan to rent your condo, beware of several things. For one, you'll be competing with the builder. To beat him, you must give the renter a better deal (after taxes) than the builder is offering. This means you probably will find yourself receiving less in rental income than what you spend on the mortgage and association fee. I'm assuming that you do indeed find a tenant - I won't even talk about the costs you'll incur by renting to The Tenant From Hell. You know him. He's the guy who fails to pay the rent or who trashes the place - or both. When your tenant moves out, you'll spend several months finding a replacement - with you paying the mortgage and condo fee in the meantime.

Having many investors and former owners trying to rent their condo units leads to another problem: You might not be able to sell your condo — even if you have a buyer! This is because most mortgage lenders will reject your buyer's application unless two-thirds of the building is owner-occupied. You see, lenders realize that renter-filled buildings usually are not maintained as well as buildings whose owners live in them. When a building isn't maintained well, it falls into disrepair. Tenants begin to move out faster than new tenants move in, and property values fall — placing the lender's loan at risk. (In the worst cases, the buildings become slums, and many well-intentioned investors and owners find that they've become slumlords. If you think this can't happen to your building, think about it: Nobody ever builds a slum.)

Therefore, if you were planning to buy a condo, STOP. DON'T DO IT.

If you're looking for a real estate investment, look elsewhere. If you're looking for a place to live, rent the condo instead (because, as a renter, you can walk away anytime). And never buy a home that you aren't willing to own or live in for a long, long time. Thats just my opinion

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Should I Buy a Single Family Home or a Condo in Fargo Moorhead?

2007-09-01T20:27:00.000-07:00

For decades, the single-family residence in fargo moorhead has been the favored investment for buyers who wanted to purchase and occupy a property. Condos were looked at as a poor second choice. Some ownership rights are given up when you buy a condo. Also, you own parts of the complex with other people with whom you or may not get along. With a house, you're the sole owner and ruler of the roost.

Sometimes condo complexes end up in litigation. For example, many condo associations have had to sue the builder for shoddy workmanship. It can be difficult to sell a condo while there's pending litigation affecting the complex. However, perhaps the major reason why condos haven't been the investment of choice is that they have trailed single-family residences in terms of home price appreciation.

For decades, single-family residences appreciated at much higher rates than did condominiums. In 2003, however, the rate of condo appreciation surpassed the single-family rate for the first time. This trend has continued.

Just as condos are coming into their own as a respectable investment, there are exciting variations on the condo model to choose from. Loft complexes have been springing up in urban areas like Portland, Ore., Jack London Square in Oakland, Calif., the South of Market area in San Francisco and in New York City, to name a view.

Although these complexes may have a trendy new name, many of the loft complexes are actually condominiums. In most cases, the buyer purchases a unit to which he has ownership rights to all that lies within the unit walls. He also owns a fractional interest in the common areas of the development and he shares this interest with the other owners in the complex.

There's a homeowner's association that takes care of the governance issues. There are rules and regulations (called CC&Rs-Covenants, Conditions, and Restrictions) that apply to all co-owners in the complex. And there are homeowner's association dues, usually paid monthly, that provide for such things as insurance for the complex common areas and some maintenance.

House Hunting Tip in fargo ND: One of the most enticing reasons to buy a condominium rather than a single-family residence is that it provides a simpler, low-maintenance life style. If this is your goal, make sure that you'll actually be getting what you bargained for. Don't assume that your homeowner dues will take care of all exterior maintenance. You may even find variability within one complex. The dues in one phase might cover exterior paint and roof replacement, but not in another.

Before buying a condo in fargo ND, find out exactly what is covered in your homeowner association dues. Also, find out if there are owners who are delinquent in their dues, and find out how much the dues have been increased over time. In a new development, the initial dues assessment may not be realistic in terms of handling future problems. In older buildings that require a lot of upkeep, you may find that the homeowner's dues are exorbitant.

Investigate any pending litigation against the complex. If the project is new, check out the builder's reputation. Have homeowner's associations of other complexes he built sued him? How does he deal with routine complaints and requests for repairs?

Read the minutes of recent homeowner's association meetings to find out if there are issues you should be aware of. Is the reserve fund adequate to handle unexpected expenses? Or, should you anticipate further assessments to repair a tennis court or replace a furnace?

The Closing: It's a good idea to talk with several current owners to find out what they like and don't like about the complex. If the soundproofing is minimal, or the water pressure is low, you may want to consider buying elsewhere.

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