update: some renters prefer simpler life in a condo.
I now feel condo is very popular for renters, with
However, investors are often better off with SFH or 2FH because
Key points:
— advantages of condo
— advantages of independent houses
Update — I need current income more than windfall!
Property investment can take a long time. If you can’t wait, then you may be disappointed, and it is better to focus on rental income in addition to appreciation.
[1] at any budget you have
–Like in Singapore and HK (and Beijing, BGC, the Bridge…), high-rise condo can have capital appreciation too, if the location is such that only high-rise is possible. I have a tendency to emphasize and focus on condo appreciation because
–In the cold light of day, I have to agree with Jack He that “In the same location, given the same unit size like 1500 sqf, a landed home always has higher value than an apartment“, because
–Give up appreciation! Among the many personal preferences, I may have to pick one to let go. It may have to be appreciation.
In reality, if I buy in a SD or CC1 location, appreciation is likely, but within such a location, one unit might have comparatively lower appreciation potential, perhaps due to age, structure, or ethnic make-up etc.
Walk-up is less popular but perhaps OK.
Su (Taiwan) said “pick the ranch with higher appreciation potential, if you feel indifferent about everything else”. Big “if” in most cases! For example, houses have higher potential but requires more maintenance (See maintenance effort(I hate it): house^condo)
–My tentative conclusion — In terms of investment, given my limited budget, tiny rental condo in a popular location can be justified -vs- a landed home in a remote township [1]:
[1] Bayonne landed house is a rare combination of landed investment near the city.
Lisa’s aunt (Mrs Huang) pointed out that in a down turn, a good location won’t drop much. I think when the market heats up, the good locations tend to rise faster — compare TPY vs Admiralty. I believe her when she said that you can improve the “superstructure” but you can’t improve the location. However, XR said his location didn’t appreciate much. West Windsor didn’t either.
Most of the value of a landed house is in the lot, rather than the superstructure.
In Bayonne, condo fees + tax is comparable or slightly higher as percentage of price, compared to a house in the same location. I feel same for West New York waterfront condos.
Jack He said can be lower in some places. Joe also said “much lower” in his part of white plains.
I hate pTax. It’s like rent. If your kids don’t go to a good school in the district, then this tax has no ROI.
Condo fee feels better. Hopefully it helps reduce my own maintenance $tcost.
Junli said maintenance cost of a typical house (his area have very few condos) is much higher than an apartment in Singapore.
XR pointed out the difference between exterior vs interior maintenance. Condo fee covers exterior.
For a 3BR house in a good school district, I may need 700k but a condo can be much cheaper, so I really need to find out the real trade-off.
Joe said coop is most restrictive. You aren’t allowed to make changes inside your unit. Alok said some coop board (“infamous” [1]) members could impose arbitrary rules such as what tenants you can bring in. Source [2] says There may be restrictions on your ability to rent out your condo or to sublet your co-op unit to someone else. It is not uncommon for condominiums and co-ops to prohibit such leases and sub-leases. More seriously, they could block your sale, so the “demand” on your asset could be artificially suppressed.
Condo is lower maintenance than houses. I agree with Joe. I said condo fee is high, but Joe pointed out pTax is lower. [1/2] say condo fees are lower then coop.
Financing — [2] says You can finance the purchase of a condo just as you would any other home (like a mortgage), but with a co-op, you’ll have to find a lender that’s willing to hold your co-op stock as security for repayment of the loan.
Joe felt condo purchase price is between coop and houses. Joe felt condo is the most easily available. He felt houses are harder to find.
http://www.moneycrashers.com/debate-single-family-home-or-townhouse/ points out that when you are away, the SFH would need someone to look after.
[1] http://www.huffingtonpost.com/greg-jacobs/coop-vs-condo-what-you-ne_b_3460551.html
[2] http://real-estate.lawyers.com/condominium-law/the-basics-of-condos-and-co-ops.html
[3] —– http://archive.northjersey.com/towns/co-ops-can-be-just-the-ticket-1.1251251?page=all is the last straw to break all my hopes about co-op:
“Condos sell for more than co-ops; the guesstimate is that each apartment will go up in value between 50 and 100 percent,” she said. That higher value is tied, in part, to the fact there are so many restrictions at co-ops. And that’s the freedom that residents were looking for, she said. Living in a co-op, residents could not get home equity loans, reverse mortgages and second mortgages or buy an apartment in the name of a corporation or a relative. They were strictly limited in renting out their homes, and the co-op board dictated when and how they could refinance their mortgages.
Here is the case of a buyer looking to come into a building with an all-cash offer, no debt and $200,000 in the bank. The co-op board still felt his financials were not strong enough, said Anderson, CEO of the Alexander Anderson Real Estate Group in Hackensack and Jersey City. “The potential buyer was upset, and he wound up renting an apartment, and the seller was upset because it took more than a year and a half to sell,” Anderson said.