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Need help in deciding to buy a condo

Posted by tar517 (My Page) on
Fri, Dec 20, 13 at 0:16

I'm about to start medical school in about 6 months. Since I will be in one place for an extended period of time (a little over 4 years) I thought buying would be a better option for me than renting. I'd like to be able to sell the place after I graduate.

Anyway, I've done a bit of looking around on Trulia and Zillow, and I've found this awesome 2 bed/1 bath condo that is part of a gated community with off-road parking that is walking distance from my medical school. It's very competitively priced at $65k and the monthly condo fees are a reasonable $175. All of the walls have recently been repainted and all of the floors have been recently re-carpeted.

However, there are a few downsides as well.

1. The condo is built in 1968. That's pretty old.

2. All of the appliances (except for the fridge) are pretty old. They might need replacing soon.

3. None of the bedrooms have locks on the doorknobs. This is a big problem since I want to rent out one of the bedrooms.

4. When I toured the house, I found that the only bathroom in the place is quite far away from one of the bedrooms. The entire condo is only 875 sq. ft.; however, the distance is still great enough that they would have to walk across the living room area to get to their room after taking a shower.

5. When I opened some of the faucets, I found the water pressure to not be very high. Also, brown water came out of the pipes. I'm not sure if that has anything to do with the bad quality of piping or the fact that no one has lived in the house for quite some time (>1.5 years).

I forgot to mention that the condo is ideal for me in that it is inhabited mostly by older people, some of whom have lived there for 10+ years. It's very quiet and as far as I know the condo association is not over the top with rules. Also, I had a friend who lived there last year who had a positive experience with the place. Her only complaints was that the place had a lot of roaches (as does anywhere in the city I live in), and there was an issue with Asbestos in the past (which has been cleared up, I believe.)

I'm not quite sure how to move forward from here. Would it be reasonable for me to demand the homeowner to replace all of the appliances, all of the doorknobs, and get the house checked out for asbestos/etc. and still give it to me at the same price of $65? Or would I be better off bargaining the value of the house down until the cost is one that I could incur myself at no major loss? Is the asbestos or the brown water in the pipes a deal breaker? Please help!

Follow-Up Postings:

RE: Need help in deciding to buy a condo

The asbestos issue--if there's a condo association, they should be able to give you information on the asbestos remediation that was done, or at least the scope of the issue. You can also have your home inspector check for asbestos when doing the inspection of the entire condo.

Same thing for the brown water. Ask the condo board for water quality reports. And have the inspector check this carefully.

If the current appliances and doorknobs work, then they don't *need* to be replaced. The sellers should have taken the age of the appliances into consideration when pricing the condo. Because you say the unit is priced competitively, I suspect that the sellers know the appliances are old and have lowered their asking price to reflect that.

The doorknobs--that is entirely your preference and is not something you should even mention to the sellers. (It's not that expensive to change doorknobs and not very difficult, unless you are thinking of adding deadbolts to the doors.) It would not be reasonable to ask the sellers to change them without a cost to you--this is similar to wanting a different paint color in a room. It's entirely your personal preference.

As for the roaches, check with the condo association to see if they spray regularly for them. The only way to keep them under control is for the entire building to be treated at the same time. If the condo association does nothing, or only unit by unit as someone complains, you will have a bigger problem than if the building is treated 3 or 4 times a year all at once.

And check the condo rules. You should be able to get a copy of them before making an offer, so you can read them and figure out if you can live with them. You say the monthly condo fee is reasonable. Get a copy of the association's finances and check them. Are they putting money away for the inevitable roof leak or other major system repair? Or are the monthly fees pretty much going to on-going repair and maintanence? If that's the case, you could be hit with a high emergency bill if something major goes wrong.

Figure out what the changes you want will cost you. Then make an offer on the condo based on that expense. If the place has been sitting on the market for a year and a half, then either the sellers will be willing to look at any offer, or they are holding out for close to full price. You won't know until you make your offer.

RE: Need help in deciding to buy a condo

Would you have the money, time and 'know how' to maintain a condo and deal with your tenant while you are in medical school?

We thought about getting a 2-bedroom condo when DD went to college, and rented out the extra room. But we did not know for sure if she would complete the program (it is a tough school, anything could happen in 4 years), we did not want her to be distracted by the condo, and we were too far away from the location, we changed mind.

Later she completed the school, that condo price had sky rocketed. But giving the fact how tough the program was, we believed we made the right decision.

This post was edited by azmom on Sun, Dec 22, 13 at 7:43

RE: Need help in deciding to buy a condo

I have owned 2 condos and would not invest in one again.

First one was inhabited by a lot of old ladies. It was like being chaperoned by 16 nosey grandmas. Plus their governing decisions were horrible. Would not shell out to fix the roof until it leaked into the top unit and paid a fortune to re-decorate a tiny lobby. They ran the board and had no judgment skills at all.

The HOA fees keep going up and you have little to say about it. And you can get hit with an assessment any time.

HOA bickering - very time-consuming and really annoying.

Roaches - unless your neighbors cooperate, you are just giving the bugs a little temporary ride away from your condo. In fact, be prepared for complaints that you sent those roaches over to your neighbors.

Look at the CC&R;s before you buy. Are there rules against your renting to a roommate?

Try to see the minutes of the last board meeting. Is there an pending legal action that you, as an owner, may be involved in paying for?

Finally, don't expect to sell the condo at much of a profit. They sometimes do not increase much in equity.

RE: Need help in deciding to buy a condo

I didn't answer after first reading your post partly because I know what I would write is going to sound harsh. It isn't meant to be; but you should set aside the emotions and think about the reality of ownership.

For perspective: Number 3 is not a "big problem"--it should be such a minor thing it does not even belong on the list. It is a relatively low expense, short amount of time, fix. Things will break--big, expensive things. When you own, it isn't a case of calling the landlord to arrange to have it fixed at no cost to you. What is your plan for when something that will cost you several thousand dollars to fix happens? The repair person gives you a four hour window of when they will show up for the inspection and one or two futures visits are necessary, each having four-hour window appointments, to put in parts. Can you arrange for someone to be at your home for those if you cannot be? Will you have sufficient funds set aside to afford the repairs?

It is nice to own your own place. Unfortunately, you get the headaches, too. Medical school will probably be a difficult, stressful time. Buying the condo may be the correct choice for you, but you should thoroughly consider everything before jumping.

RE: Need help in deciding to buy a condo

I would pass on buying this unit. I agree with the above posters.

RE: Need help in deciding to buy a condo

It may make sense to buy. Calculate:
How much you would pay for rent?
How much you would actually pay for your condo, including mortgage, insurance, tax, HOA fee, maintenance/repairs?
How much could you charge a room mate?
What if you don't find a roommate or want to live by yourself?

Is the one bathroom going to be an issue when finding and living with a roommate?

What's the potential resale market like? You would think that a medical school nearby should be good for resale; however:
Why has nobody lived in the condo for 1 1/2 years?
Why has nobody made an offer? In short, research the history of this condo.

RE: Need help in deciding to buy a condo

"3. None of the bedrooms have locks on the doorknobs. This is a big problem since I want to rent out one of the bedrooms. "

The fact that you think this a BIG problem tells me that you will not be able to handle ownership of property.

RE: Need help in deciding to buy a condo

Yes, I was also wondering why it was vacant that long?

RE: Need help in deciding to buy a condo

"3. None of the bedrooms have locks on the doorknobs. This is a big problem since I want to rent out one of the bedrooms. "

LuAnn_in_PA said "The fact that you think this a BIG problem tells me that you will not be able to handle ownership of property."

That is exactly what I thought when I read that. I live in a condo and we have had to repair and replace many expensive things like a furnace and sump pump and it sounds to me like a condo is too much for you to take on right now while you go to med school.

RE: Need help in deciding to buy a condo

If OP goes to medical school, s/he is obviously smart and, I hope, analytical enough to figure out home ownership. It ain't brain surgery, and I'm assuming his/her learning curve would be very steep.

RE: Need help in deciding to buy a condo

I did not mean to insult the intelligence of the OP. Owning a condo is not always as easy as a first time home owner might expect. With a lot on his/her plate and plans to only be there for 4 years, renting might make more sense.

And really, interior door knobs are such a minor thing and someone who thinks they are a major thing sounds like someone who would prefer renting.

RE: Need help in deciding to buy a condo

Sorry, I didn't mean to imply that and certainly understand your point. What I was trying to say is that this purchase should be approached like a business decision, and that one can learn the necessary know how very quickly.
However, I agree that part of that decision needs to be recognizing that there will be things one has to handle as a home owner and as a landlord, which will cost time and/or money.

RE: Need help in deciding to buy a condo

I wonder about this condo's viability as a rental unit. I would think most renters would not want to share a bathroom.

RE: Need help in deciding to buy a condo

875 isn't that small. Nor is it that big if you plan on having a tenant. Have you ever lived with someone before? I'm assuming that you did during college. Well, think back to the most annoying room mate that you ever had, and think ahead to trying to collect rent from that person and sharing a bath with them. It may not be so easy to manage that on top of the responsibilities that come with property ownership and medical school. Especially if they turn out to be irresponsible and the condo association has an issue with their parking, partying, or public smoking or drug use. Not that anyone ever expects to get a roommate like that, but you really have to be sure that you have the skills to do a people assessment, credit assessment, and most importantly, past behavior assessment. Even then, you may end up with someone who can't handle adult freedoms without going nuts.

Always think of the worst case scenario, and then plan for that. It may not happen, but if you go into the situation without anticipating some issues, that's naïve.

RE: Need help in deciding to buy a condo

My guess is that you have enough current income to quality for a mortgage at this point. If your parents are paying for all this, this is their decision, not yours.

Unless you have wealthy parents to pick up your tuition, you will have sizable student loans to pay back. Finances are much more stressful during your residency than in medical school. When you are in medical school, you are in a make-believe-world with huge sums of student loans coming to you without any real obligations. You actually have checks deposited in your bank account to live on...

I have a different perspective from what others have mentioned. This is very specific to med school and residency and not related to real estate.

I would not buy a condo at the start of medical school only because the probability of moving to another town to do one's residency is very high. You want to look for the best residency that you can get into without unnecessary strings, ie a condo you can't sell. Where you do your residency and what specialty you pick is your future and it has to be the right fit for you. This will determine what you do for the rest of your life. You should put all your effort into picking the right residency and the location so you make good career choices. You really do not want an unsold condo albatross around your neck while making that decision!

It is not easy to try to sell your place while moving to another location to start your residency. Both processes are quite stressful. I have to assume that you are in a very small town given the price of the condo. It may take a while to sell in a small town. The fact that no one lived there for 1.5 years should be a clue that you will have a similar issue when you time comes for you to sell.

Unfortunately, when you start your residency, your students loan payments are due and having a mortgage on your unsellable-condo will financially stress you on your resident salary. If you are planning to do your residency in a big city, finances will be very very tight.

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