Downtown/Urban Condo - Advise for 1st timers

[BigNumbers]

Looking for some thoughts on the below...

I have a family member who's young (22 - man and woman) and looking for their first condo. They want 'walking distance' to downtown / urban (so mission, etc work as well as DT) and given they have zero maintenance skills and all their money will go to the down payment... No funds for a sudden cash call from the strata...

So based on this, I thought this was a good guide:

1. Newish building
2. A tower is better - more units to spread the risk over
3. tower is likely more rentable (this one is dubious, I know) - but they are thinking of renting it out if they move to TO in a few months
4. They want 2Bed/2Bath
5. Price range is sub $450K

Based on the above, I haven't really found much while perusing MLS... Any suggestions out there for buildings/listings they should consider?

[BigNumbers]

Also, looking for any comments on the perceived rentability of a 1Bed/1bath - as the nice buildings they like (Stella, etc) can't get a 2B/2Bath for $450K, so they are debating a 1B/Bath... Which I said they'll likely kill each other in, after they spend that much time like sardines.

[Hockeyguy15]

The only input I have is that just because a building is newer doesn't always mean there won't be a special assessment. In theory there shouldn't be any unexpect/expensive repairs to a newer building but there can be. Someone can correct me if I am wrong but newer builings don't usually have a healthy reserve fund, as that can take some time to accumulate.

They should review the condo docs and reserve fund and study carefully, or better yet pay to have someone experienced to review them. Those documents should tell them what they need to know about the building and how well it is managed.

[calgarygeologist]

I would push the search out a little further to include Marda Loop/South Calgary and even Bankview. I use to walk downtown from Marda Loop (just off 14th street) and it was about 35 minutes (to 4th Ave on the west side.) There are a couple of nice buildings south of the Elbow River in Parkhill/Stanley Park.

[Regorium]

I think Sasso and Vetro would be the two towers in that price range. Xenex might have some too in that lower price range, but I really didn't like their units at all.

The rentability is obscene at the moment. A 325k 1bed highrise unit rents out for $2000. It's very clearly a landlord's market at the moment. If you're in the highrises, I would not be worried about rentability at all, regardless of what unit they end up choosing.

[BigNumbers]

Thank you for all the input - appreciate what's been posted so far.

[DownhillGoat]

Originally Posted by Hockeyguy15

The only input I have is that just because a building is newer doesn't always mean there won't be a special assessment.

First place I lived in in Calgary we got hammered in special assessments in the first few years. To the point I will never buy a condo. And if for some reason I ever did, I'd want to make sure I have an extra 20k in the bank prior to purchase just in case.

[Table 5]

Personally I think there are really great deals to be had in the "ugly" 70s buildings in the Beltline. Instead of paying 450-500k for a 2 bedroom, you can get one for under 300k that's going to be considerably bigger than in a new one. When we bought ours, the whole unit was renovated and looked better than a lot of new ones I had been in. I think the finishing on a lot of newer condos are quite poor to be honest.

One thing that can alleviate the assessment fear is to have someone look over the books before you close. We had someone look over the condo books to see if there were any issues down the line, and were able to negotiate another 10k off the price after the guy said that it looks like the roof would soon need repairs. Sure enough, we were notified of a 5k assessment soon after for that reason.

Newer buildings always have that laughably low condo fee as well...you just know that will be jacked up in a year or two to build up that reserve.

[bizaro86]

Why not something like this: http://beta.realtor.ca/propertyDetai...rtyId=14165895

Granted its a 2 bed/1 bath, but its >100k less than budget, which makes a pretty big difference.

[topfiverecords]

Originally Posted by bizaro86

Why not something like this: http://beta.realtor.ca/propertyDetai...rtyId=14165895

Granted its a 2 bed/1 bath, but its >100k less than budget, which makes a pretty big difference.

$624 condo fees for 768 sq ft...ouch.

[Hack&Lube]

Originally Posted by topfiverecords

$624 condo fees for 768 sq ft...ouch.

Must be the age of the building?

[DoubleF]

Originally Posted by Hack&Lube

Must be the age of the building?

Yes and no? I looked at a condo at Prince's Crossing about 2+ years ago. A 2 bedroom was going for something like $240k or so but condo fees were mid $700s IIRC. Oh, it was tempting, but the condo fees were so idiotic that I decided no. It was a damn nice unit too, but those fees were also mind blowing (you could rent a unit for only a few hundred more than the condo fee a few blocks away, let alone a mortgage and additional costs). Those fees have always been high in that building. I have no idea why (Amenities maybe?).

The 1970s units aren't bad buys to be honest. Yeah sure, you get some mid level condo fees ($300-400) but you know exactly what is up for repairs and can consider whether a special assessment is looming. Grab the financial statements, read the board minutes and if a special assessment seems to be looming, haggle hard. Generally, many have been renovated in recent years to compete, so they're not going to be run down pieces of junk.

Do research, wander around the building a bit to see what the area is like. I almost landed a steamy pile of #### with a unit at Rocky Mountain Court. Looked at 2 units there, decided I didn't like the location, and the upkeep looked kinda shoddy. Being 20 floors up with a crappy elevator seemed kinda risky. So I decided against it and moved on. Then, this happened: http://calgary.ctvnews.ca/five-compa...laws-1.1017218

A year or two back, I recall a new development somewhere on the West side of DT (less than 1-2 years old) had burst piping or something and a special assessment. Just because it's new doesn't mean it's headache free (I think it was Luna).
Yep, looks like it was: http://lunacondo.files.wordpress.com...dec20final.pdf

[lorenavedon]

would love a condo building that banned renting. Making a home out of a place that's all renters is BS really and really difficult. If I make a condo my home I want other owners to be doing the same. Not just churning and burning the building until it fall over only looking at a balance sheet instead of quality of living. I wonder if anything like that exists anywhere. In a normal economy it's not a huge problem, but in Calgary it's really epidemic lately where you think about buying an over priced condo and calling it home but having to deal with %90 of the building being renters that don't really care about maintaining the place they live in or being a part of a community.

[I-Hate-Hulse]

Originally Posted by DoubleF

A year or two back, I recall a new development somewhere on the West side of DT (less than 1-2 years old) had burst piping or something and a special assessment. Just because it's new doesn't mean it's headache free (I think it was Luna).
Yep, looks like it was: http://lunacondo.files.wordpress.com...dec20final.pdf

I'm pretty impressed by that newsletter - seems like a simple thing but it is a great job on behalf by the Board to keep residents informed as to stuff. As well, they seem on top of the issues, namely the water leaks (that are the bane of all condos, and yes, houses). Lots of other things to consider of course when buying but this simple newsletter is a very good sign.

Originally Posted by lorenavedon

would love a condo building that banned renting. Making a home out of a place that's all renters is BS really and really difficult. If I make a condo my home I want other owners to be doing the same. Not just churning and burning the building until it fall over only looking at a balance sheet instead of quality of living. I wonder if anything like that exists anywhere. In a normal economy it's not a huge problem, but in Calgary it's really epidemic lately where you think about buying an over priced condo and calling it home but having to deal with %90 of the building being renters that don't really care about maintaining the place they live in or being a part of a community.

Nope, it's not possible to legally put restrictions on what someone can do with their property. Even the "18 and up" or "65+ residences" wouldn't stand up to a Charter of Rights complaint.

I understand where you're coming from, but renters sometimes get a bad rap unfairly. Lots of good tenants out there. Hell, there are just as many bad apples in a barrel of owners...

[ken0042]

Originally Posted by lorenavedon

would love a condo building that banned renting.

One of the new complexes in Copperfield has stipulations about how many rentals there can be, and at what price. For example their "From $130K" units cannot be used as rentals.

[Hack&Lube]

Originally Posted by DoubleF

Do research, wander around the building a bit to see what the area is like. I almost landed a steamy pile of #### with a unit at Rocky Mountain Court. Looked at 2 units there, decided I didn't like the location, and the upkeep looked kinda shoddy. Being 20 floors up with a crappy elevator seemed kinda risky. So I decided against it and moved on. Then, this happened: http://calgary.ctvnews.ca/five-compa...laws-1.1017218

I just had a peek at RMC units, this one looks nice.
$259K for a totally renovated (looks great!) 764 sq/ft unit and $401 condo fees.
http://www.calgarymike.com/real-esta...-calgary/#idle


But yeah, I had a co-worker who lived there during the parkade issue and the parkade looked like one of those disaster movies where it looked like a collapsed concrete cave-in in many areas. I wonder if the tenants had to pay for it out of assessments. I'm guessing there were probably lawsuits filed, etc. as well.

[bizaro86]

Originally Posted by topfiverecords

$624 condo fees for 768 sq ft...ouch.

On the other hand, those condo fees are probably $250 higher than something newer, but the mortgage will be ~500 less because of the price difference. Different strokes obviously, but low fees in new buildings will eventually go up, but high fees in old buildings should be sustainable.

[DoubleF]

Originally Posted by Hack&Lube

I just had a peek at RMC units, this one looks nice.
$259K for a totally renovated (looks great!) 764 sq/ft unit and $401 condo fees.
http://www.calgarymike.com/real-esta...-calgary/#idle


But yeah, I had a co-worker who lived there during the parkade issue and the parkade looked like one of those disaster movies where it looked like a collapsed concrete cave-in in many areas. I wonder if the tenants had to pay for it out of assessments. I'm guessing there were probably lawsuits filed, etc. as well.

I don't recall what the outcome was. Either way, sucked for the Tenants. The units there have always been pretty nice. Loved the view, many were newly renovated, etc. My issues were no in-suite laundry, clanky elevator and the common areas were dark and parkade seemed like it wasn't really cleaned on a regular basis (pretty dusty) and I wasn't a huge fan of the area at night. Other than that, it was pretty good overall.

Originally Posted by I-Hate-Hulse

I'm pretty impressed by that newsletter - seems like a simple thing but it is a great job on behalf by the Board to keep residents informed as to stuff. As well, they seem on top of the issues, namely the water leaks (that are the bane of all condos, and yes, houses). Lots of other things to consider of course when buying but this simple newsletter is a very good sign.

I agree. It's well managed for sure. I don't deny that, but no issue is better than any issue. With that management, I presume there would be little risk for future big issues.

[Regular_John]

Originally Posted by Table 5

Personally I think there are really great deals to be had in the "ugly" 70s buildings in the Beltline. Instead of paying 450-500k for a 2 bedroom, you can get one for under 300k that's going to be considerably bigger than in a new one. When we bought ours, the whole unit was renovated and looked better than a lot of new ones I had been in. I think the finishing on a lot of newer condos are quite poor to be honest.

One thing that can alleviate the assessment fear is to have someone look over the books before you close. We had someone look over the condo books to see if there were any issues down the line, and were able to negotiate another 10k off the price after the guy said that it looks like the roof would soon need repairs. Sure enough, we were notified of a 5k assessment soon after for that reason.

Newer buildings always have that laughably low condo fee as well...you just know that will be jacked up in a year or two to build up that reserve.

Definitely, generally $250-$300k spent on a 70's built complex with a decent reserve fund is gonna be money better spent than shelling out the same for a 600 sq ft new build with low condo fees. Sure you might be able to squeeze granite countertops or something out of a new build, but those "ugly 70's" built complexes are built like a rock.

When we we were shopping we probably spent $50-60k less then a new unit would have been, but ended up almost twice the space as a result.

[MrCallahan]

Originally Posted by DoubleF

I don't recall what the outcome was. Either way, sucked for the Tenants. The units there have always been pretty nice. Loved the view, many were newly renovated, etc. My issues were no in-suite laundry, clanky elevator and the common areas were dark and parkade seemed like it wasn't really cleaned on a regular basis (pretty dusty) and I wasn't a huge fan of the area at night. Other than that, it was pretty good overall.



I agree. It's well managed for sure. I don't deny that, but no issue is better than any issue. With that management, I presume there would be little risk for future big issues.

I've always been curious about this building. I used to rent in there when I was in college (pre boom, and construction issues), and thought it would have been a great place to buy for an investment. It's Downtown, huge square footage compared to modern condos. It's a little dark and dingy in there, but updating your suite could make it more attractive and appealing to downtown dwellers.

Has anyone had a look at their financials lately? have they got their crap together since the whole parkade incident?