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I have been a property manager for the last 10 years or so and in that time I have seen my share of crazy things.
I hate condo's as investments here are my reasons why.
First and foremost the Board of Directors who actually make the decisions about the condo and how the money is spent have no training except for the ability to sign a offer of purchase and sale for a unit in the building. They have no idea and no ability to manage the finances of a multimillion corporation. They have the time and willingness to volunteer.
Property managers who manage the building are generally paid according to a percentage of the gross operating expenses/budget. This is really bad because if your expenses go down so does their pay. Do you understand why your management fees always go up?
People generally do not understand that by buying a condo they are buying into the liability of the whole building. So when they find oil seeping through the parking garage wall.... you own a piece of that. By owning it that means you get to pay a special levy of $$$$
Developers know when they are building this thing that in a few years time they are out the door, they turn the building over to the shiny new board members. Consequently they build for 2-3 years after that it's the condo unit's owner's problem. So when they can buy the higher grade/thickness copper pipes they don't. In apartment buildings it is common to have the pipes last over 25 years before replacing. In condos I have worked in buildings 8 years old were needing all pipes replaced. And so on and so forth.
Special levies deserve their own whole rant ... they are bad. If your property manager loses your reserve fund and themselves in a Carribean country. You will pay this. If your board makes wrong decisions and doesn't spend the money properly you will pay this. Special levies are thousands of dollars on top of the regular maintenance fee. Condo's seem to be perfect for seniors but between rising maintenance fees and special levies it is too unpredictable for someone on a fixed income. And whenever a special levy gets assessed people have to sell and because there's a special levy the prices on the place go down. It's the same with maintenance fees when they go up the price of the condo goes down.
So to sum it up.
You can't rent them and get positive cash flow.
Maintenance fees go up all the time.
Management fees go up all the time.
You are liable for everything and have control of nothing.
Poor construction adding to costs
Condo boards having no experience, training, expertise, or clue about how to run a building.
Poor customer service - addiction to rules.
Special levy
What led to this diatribe? I manage three one bedroom condo's the maintenance fees just went up $100 per unit for no reason at all. Before he was breaking even now he's not. That really sucks.
I hate condo's as investments here are my reasons why.
First and foremost the Board of Directors who actually make the decisions about the condo and how the money is spent have no training except for the ability to sign a offer of purchase and sale for a unit in the building. They have no idea and no ability to manage the finances of a multimillion corporation. They have the time and willingness to volunteer.
Property managers who manage the building are generally paid according to a percentage of the gross operating expenses/budget. This is really bad because if your expenses go down so does their pay. Do you understand why your management fees always go up?
People generally do not understand that by buying a condo they are buying into the liability of the whole building. So when they find oil seeping through the parking garage wall.... you own a piece of that. By owning it that means you get to pay a special levy of $$$$
Developers know when they are building this thing that in a few years time they are out the door, they turn the building over to the shiny new board members. Consequently they build for 2-3 years after that it's the condo unit's owner's problem. So when they can buy the higher grade/thickness copper pipes they don't. In apartment buildings it is common to have the pipes last over 25 years before replacing. In condos I have worked in buildings 8 years old were needing all pipes replaced. And so on and so forth.
Special levies deserve their own whole rant ... they are bad. If your property manager loses your reserve fund and themselves in a Carribean country. You will pay this. If your board makes wrong decisions and doesn't spend the money properly you will pay this. Special levies are thousands of dollars on top of the regular maintenance fee. Condo's seem to be perfect for seniors but between rising maintenance fees and special levies it is too unpredictable for someone on a fixed income. And whenever a special levy gets assessed people have to sell and because there's a special levy the prices on the place go down. It's the same with maintenance fees when they go up the price of the condo goes down.
So to sum it up.
You can't rent them and get positive cash flow.
Maintenance fees go up all the time.
Management fees go up all the time.
You are liable for everything and have control of nothing.
Poor construction adding to costs
Condo boards having no experience, training, expertise, or clue about how to run a building.
Poor customer service - addiction to rules.
Special levy
What led to this diatribe? I manage three one bedroom condo's the maintenance fees just went up $100 per unit for no reason at all. Before he was breaking even now he's not. That really sucks.