to buy or not to buy...

[sbin]

Hello,

This is my first post on REIN, and I`m glad to read some of the great posts!! I`m a 2nd year university student, who is looking to buy a condo or a duplex for under 300k in edmonton. (not for investing, my own place). But given the fact that edmonton condos dropped by 3% since Jan of this year, I`m not sure whether it is good time to buy yet. Been looking for condos along the LRT line. and in the southwest area of Edmonton. But heard a lot of things such as the increase in listing rates, and mortgage term change in April, etc etc.. Hard to decide what`s true and false.

I`ve looking at a unit in Aspen Gardens, 122st, just off of whitemud drive.
Good: It`s top floor(4th), south facing unit, high 12 ft slanted ceilings, 1200sqft, 2 bedroom, 1.5 bathroom, condo fee: 420(include everything), tax:1500/annual, its a well managed condo with large reserve funds.
Bad: need a lot of work, need new applicances (lot has the original applicances), need paint, light fixtures, flooring. Estimates around 10k (I`m doing this myself)

the asking price is 230k, plus 10k in reno, so 240k total, it is well within my price range, but I`m wondering if this is a good buy or not? I`m a first time buyer, so I have no experience, and I`ve done a lot research and looking around, so far this is the best deal I could find, otherwise I`ll have to wait and see.

Please, any advices are highly appreciated!!

Regards,

 

[housingrental]

How can you afford this / cover payments on an ongoing basis being in school?
What sort of rent will you be bringing in from roomates?
Do you have friends already lined up for this?

 

[Lucas]

Hi sbin,

The answer depends on how long you plan on living in the property. As a rental property, taking into consideration the numbers you presented, it will NOT work as a rental property. However, you may plan on living in the unit for 5 + years...If so, then in this time, your mortgage paydown, equity appreciation and increased rents should make the unit a decent investment.

Call me directg at 780.965.7029 if you would like me to go over your options in greater detail.

Thanks,

Lucas
780.965.7029


QUOTE (sbin @ Mar 21 2010, 09:34 PM) Hello,

This is my first post on REIN, and I`m glad to read some of the great posts!! I`m a 2nd year university student, who is looking to buy a condo or a duplex for under 300k in edmonton. (not for investing, my own place). But given the fact that edmonton condos dropped by 3% since Jan of this year, I`m not sure whether it is good time to buy yet. Been looking for condos along the LRT line. and in the southwest area of Edmonton. But heard a lot of things such as the increase in listing rates, and mortgage term change in April, etc etc.. Hard to decide what`s true and false.

I`ve looking at a unit in Aspen Gardens, 122st, just off of whitemud drive.
Good: It`s top floor(4th), south facing unit, high 12 ft slanted ceilings, 1200sqft, 2 bedroom, 1.5 bathroom, condo fee: 420(include everything), tax:1500/annual, its a well managed condo with large reserve funds.
Bad: need a lot of work, need new applicances (lot has the original applicances), need paint, light fixtures, flooring. Estimates around 10k (I`m doing this myself)

the asking price is 230k, plus 10k in reno, so 240k total, it is well within my price range, but I`m wondering if this is a good buy or not? I`m a first time buyer, so I have no experience, and I`ve done a lot research and looking around, so far this is the best deal I could find, otherwise I`ll have to wait and see.

Please, any advices are highly appreciated!!

Regards,

 

[Thomas Beyer]

QUOTE (sbin @ Mar 21 2010, 09:34 PM) the asking price is 230k, plus 10k in reno, so 240k total, it is well within my price range, but I`m wondering if this is a good buy or not? I`m a first time buyer, so I have no experience, and I`ve done a lot research and looking around, so far this is the best deal I could find, otherwise I`ll have to wait and see.
..
is this within walking distance to LRT ?

why not buy in Strathcona and walk to Uof A ?

seems like a decent price @ $200/sq ft .. but hard to say as many details are lacking such as: age, reserve fund, upgrades, location, comparables

buying makes sense only if you live there more than 3 or 4 years !

 

[sbin]

QUOTE (housingrental @ Mar 22 2010, 12:08 PM) How can you afford this / cover payments on an ongoing basis being in school?
What sort of rent will you be bringing in from roomates?
Do you have friends already lined up for this?

yes, i made some money on other investments, so 20% down payment is not a problem. then i`ll work part time job to make the mortgage payments
No there wont be any roommates, as i live with my gf.

 

[sbin]

QUOTE (Lucas @ Mar 22 2010, 02:04 PM) Hi sbin,

The answer depends on how long you plan on living in the property. As a rental property, taking into consideration the numbers you presented, it will NOT work as a rental property. However, you may plan on living in the unit for 5 + years...If so, then in this time, your mortgage paydown, equity appreciation and increased rents should make the unit a decent investment.

Call me directg at 780.965.7029 if you would like me to go over your options in greater detail.

Thanks,

Lucas
780.965.7029

Thanks Lucas, as I`ve said, this is for myself, not a rental. But I`ll contact you sometimes this week, to discuss possibilities.

 

[sbin]

QUOTE (ThomasBeyer @ Mar 22 2010, 06:51 PM) is this within walking distance to LRT ?

why not buy in Strathcona and walk to Uof A ?

seems like a decent price @ $200/sq ft .. but hard to say as many details are lacking such as: age, reserve fund, upgrades, location, comparables

buying makes sense only if you live there more than 3 or 4 years !


No, it`s not walking distance to anywhere, have to take bus to LRT.

prices in Strathcona or Garneu is not out of my price range, but PRETTY ridicules in my opinion.

and yes, I`ll be holding it at least 5 years. In this case, is it a good idea to buy fixuppers? does anyone buy fix uppers to live in themselves, not investing? I just want to save some money.

and I love your awesome posts!!! I pretty much read all of your posts, very informative!

Thanks Thomas!

 

[ChrisDavies]

QUOTE (sbin @ Mar 23 2010, 09:57 PM) No, it`s not walking distance to anywhere, have to take bus to LRT.
prices in Strathcona or Garneu is not out of my price range, but PRETTY ridicules in my opinion.
and yes, I`ll be holding it at least 5 years. In this case, is it a good idea to buy fixuppers? does anyone buy fix uppers to live in themselves, not investing? I just want to save some money.

If you like fixing, go for it. I do. Spending $5k on appliances is worth it if there`s a $10k discount on price. I find there`s a $20-30k discount to be had on places that just need the $10k fix (flooring, paint and little stuff).

And I think it`s a great time to be buying. I`m writing more offers this week.

Chris

 

[JimWhitelaw]

I`ll second Chris` advice. If you like doing the work and have the time, putting in some labour can be a good way to get some "free" equity in a property. As others have mentioned, this one doesn`t work as a rental right now, but if you live there yourself for a few years, then rent it out when you`re done school, it looks like a decent investment.

 

[Thomas Beyer]

QUOTE (sbin @ Mar 23 2010, 11:57 PM) No, it`s not walking distance to anywhere, have to take bus to LRT.

prices in Strathcona or Garneu is not out of my price range, but PRETTY ridicules in my opinion.

and yes, I`ll be holding it at least 5 years. In this case, is it a good idea to buy fixuppers? does anyone buy fix uppers to live in themselves, not investing? I just want to save some money.

and I love your awesome posts!!! I pretty much read all of your posts, very informative!

Thanks Thomas!
Garneau and Strathcona are primo areas .. so more expensive of course !

A condo is usually NOT as good an investment as a house for a person to live in.

Why ?

a) You have little control over condo fees and
b) you have less land per $ invested.

So why not buy a house close to UofA, say south of 82nd to 70th Ave .. around 300 to 400K depending on condition. Buy it ugly, cheap .. and then fix it up .. re-finance a year later .. pull out all your money .. or sub-lease a room or 2 .. or rent the garage (or build one). Many more options that a suburban condo !

Always always buy the most expensive house you can afford .. and if you are a handy person: buy ugly/cheap and fix it .. that is the fastest, tax-free (!!!!) path to wealth for you !

 

[sbin]

QUOTE (ThomasBeyer @ Mar 24 2010, 08:35 PM) Garneau and Strathcona are primo areas .. so more expensive of course !

A condo is usually NOT as good an investment as a house for a person to live in.

Why ?

a) You have little control over condo fees and
b) you have less land per $ invested.

So why not buy a house close to UofA, say south of 82nd to 70th Ave .. around 300 to 400K depending on condition. Buy it ugly, cheap .. and then fix it up .. re-finance a year later .. pull out all your money .. or sub-lease a room or 2 .. or rent the garage (or build one). Many more options that a suburban condo !

Always always buy the most expensive house you can afford .. and if you are a handy person: buy ugly/cheap and fix it .. that is the fastest, tax-free (!!!!) path to wealth for you !


How is it that you`ll have less land per $ invested?? so for e.g, you would opt to buy a house that`s very old and small for twice the amount than a newer condo somewhere further south at the SAME sq footage?

Yeah, I agree that houses are more flexible. But shelling out 300~400k for a ugly little house near UofA seem unreasonable to me... Because I`m already buying it at a higher cost, even if I fix it up how much growth will it have?? I`m just slightly puzzled...

 

[bizaro86]

QUOTE (sbin @ Mar 24 2010, 09:13 PM) How is it that you`ll have less land per $ invested??

Say a 400,000 house is on a 50 foot by 125 foot lot, and a 200,000 condo is in 24 unit building on a 100 foot by 125 foot lot. So the condo lot is twice as big, but you only own 1/24th of it. So the house, for twice as much money, comes with 12 times more land. This becomes potentially lucrative if someone wants land in the area for redevelopment.

Michael

 

[Thomas Beyer]

QUOTE (bizaro86 @ Mar 25 2010, 08:34 AM) Say a 400,000 house is on a 50 foot by 125 foot lot, and a 200,000 condo is in 24 unit building on a 100 foot by 125 foot lot. So the condo lot is twice as big, but you only own 1/24th of it. So the house, for twice as much money, comes with 12 times more land. This becomes potentially lucrative if someone wants land in the area for redevelopment.

Michael
bingo !

land appreciates .. a structure on building depreciates/deteriorates ..

 

[Lucas]

Condo`s can be good for those that have a tough time setting aside dough for maintenance and preventative maintenance...assuming that the condo board is responsible and the fees are in line with the size and maintenance schedule of the building, condo fees are a convenient way of taking care of the common areas of a complex (ie exterior, parkade, landscaping etc...).

A fixer-upper can be great if you have the time, money and knowledge to perform the renovations. I have been to many properties where the sellers had the best intentions with their DIY project but lost steam half-way through the project and end up living in the a partially finished reno-zone.

I personally like the Aspen Gardens area...Ironically, that is where my wife and I did our first "flip"...This was before the price explosion and there was still alot of demand when we listed. With its proximity to the Valley and Whitemud, there will ALWAYS be buyers for your condo. I was interested in fixing places and I liked that I didn`t have to worry about major structural repairs...just cosmetic stuff. I was able to earn "sweat equity" but I didn`t get in over my head.

The reason why I mentioned it as a rental is b/c it may be an option to rent it out after you and your girlfriend live in it...

Ultimately you should purchase something that`s in-line with your income and your skill set...If your handy and you want to maximize your dollars, a house in the locations Thomas mentioned is great. Historically it has high resale demand and if you decide to create a rentable suite, there is a large pool of good tenants in the area.


Good luck,

Lucas


QUOTE (ThomasBeyer @ Mar 24 2010, 08:35 PM) Garneau and Strathcona are primo areas .. so more expensive of course !

A condo is usually NOT as good an investment as a house for a person to live in.

Why ?

a) You have little control over condo fees and
b) you have less land per $ invested.

So why not buy a house close to UofA, say south of 82nd to 70th Ave .. around 300 to 400K depending on condition. Buy it ugly, cheap .. and then fix it up .. re-finance a year later .. pull out all your money .. or sub-lease a room or 2 .. or rent the garage (or build one). Many more options that a suburban condo !

Always always buy the most expensive house you can afford .. and if you are a handy person: buy ugly/cheap and fix it .. that is the fastest, tax-free (!!!!) path to wealth for you !

 

[DaveRhydderch]

I`ll leave the discussion on whether to buy a condo or house to others, but my first place was a house and I rented out 3 rooms and lived rent free. There`s the obvious pros and cons to this, but it is something to consider.

As for the market, I`m not sure how the specific Edmonton condo market is, but ultimately prices aren`t going to shot through the roof anytime soon. I`d take your time and figure out what you want and then find the right place.

And lastly, good for you buying when you`re in University. Thats a great accomplishment.

 

[Smitty]

Wasn`t there an old adage: "Do not wait to buy real estate: instead, buy real estate and wait."

Now of course that doesn`t take into account everyone`s personal circumstances, but a purchase in a fundamentally strong market coupled with a good purchase price that ends up you owning a positive cash flow property, well, then, isn`t that a good thing? A good question to ask yourself.

Smitty

 

[LeighF]

If you are eventually wanting to sell, is this type of condo what you want? Have you considered a 3 bedroom townhome somewhere that is well managed by a reputable condo association? It might be more desirable on the open market??