Saving on condo repairs & maintenance
Everybody likes to save money right? When it comes to building maintenance one way to save money is to simply not have any work done. Just ignore the condition of your building and hope for the best. The only problem with this approach is that unless you can unload the unit to an unsuspecting buyer before disaster strikes you’ll be looking at a much larger repair bill.
And leaky condo problems aren’t exactly rare in Vancouver - just look at the recent news of repairs on two concord pacific towers downtown, or any other the other leaky condo repairs throughout the lower mainland.
Househunting.ca has a letter from someone whose strata opted for the ‘ignore it and hope for the best’ strategy:
Now our deferral has come back to haunt us. Each owner is faced with an average $19,000 assessment just to maintain and upgrade the exterior, not including the roof. Our windows have failed, our decks and balconies are in serious failure and the masonry detailing is in need of serious attention.
We have figured out that if each strata lot had paid an extra $30 per month over the past 34 years, our buildings would have been routinely repaired, the interest would have covered inflation costs, and we wouldn’t be doing this at a time when construction costs are at a record high.
Another problem with not getting basic maintenance done is that it will affect warranty coverage. Even if your building is under a New Home Warranty or covered by a rain screen repair warranty, your coverage is affected by your buildings maintenance record. Saving money in the short term can work out to be very expensive in the long term. A year ago you may have been able to unload a leaky condo without much of a loss, but as our market softens and the number of listings for sale grows this is less of an option.
Putting the problem unit on the market and praying for a sucker with good credit isn’t as effective as it once was.
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August 25th, 2008 at 1:12 pm
August 25th, 2008 at 1:19 pm
If I own a tiny SFH and I cannot afford the repairs, I might, as a last resort, open a tent inside the house and hold on.
If I own a condo and I cannot afford the repairs, I have to contribute my share or leave…
Another –1 for condo ownership.
Regards,
arit
August 25th, 2008 at 1:52 pm
August 25th, 2008 at 2:18 pm
I was amusing myself with the idea of bringing a complete construction crew + equipment from back home to build me a good, bullet proof, “ITUNG” or similar high quality brick house.
Might still happen. I don’t like cardboard as my protection from the bogeymen.
Regards,
arit
August 25th, 2008 at 2:37 pm
The building I was in had mtce fees of ~$220/mo for an 800 sq.ft unit in a 12-yr old building. About 40% of the fees went to pay for natural gas and hot water. The remainder covered all the expenses, plus a little extra to help build up the contingency fund every month. About $12/mo went to the management co.
August 25th, 2008 at 2:40 pm
Make sure you get a good building inspector before purchasing. Be careful of houses built during boom years. And educate yourself about basic SFH construction materials, techniques, etc.
August 25th, 2008 at 2:48 pm
1. Amenities. Ask anybody who owns a pool or hot tub how much they cost.
2. Work. As a condo owner, you aren’t doing any of it. As a SFH owner, you have to purchase, maintain, store and use your lawnmower, as an example. This expense is not in the thousands of dollars, but how much is your time worth to you?
Just some thoughts. I’m an owner of a building now where the other owners don’t want to buck up and get some long term maintenance done, even with these other buildings in the news. Too short-sighted I guess.
August 25th, 2008 at 2:52 pm
Some examples of expenses:
The sidewalk has to be swept from time to time, which means you have to hire someone for that– you pay the property manager for that. If the strata isn’t keeping an eye on the fees, the property manager can hire the most convenient contractor (probably not the cheapest) to provide the services. Have a garden? Somebody has to maintain it. Same thing for the lawn. Those lights in the parkade need to be kept alive as well. Elevator maintenance is ridiculously expensive. Pools? I’m glad my building didn’t have one of them. 24-hour concierge? That’s a salary for at least three people, plus profits to a management company that provides the bodies. Security? It costs money to have bodies around. Plumbing repairs get pretty expensive pretty quickly– even for simple repairs that a homeowner could do himself. Graffiti? Ouch.
If you have an older building with single-pane windows which provides “free” heat, then you’ll be in for a whopper of a monthly maintenance fees. If a building is trying to avoid the big leaky condo bill by doing little repairs here and there (futile!), you’ll be paying a higher monthly fee to cover those bits of work.
August 25th, 2008 at 3:16 pm
Make no mistake, these are glorified condos - even the garage is underground, shared with the others.
All you get is a separate entrance form your “front yard”…
I think you have to be mentally incapacitated to pay this kind of money for what you get there.
And trust you me, I see them building this stuff… utility 2×4 lumber covered with chipboard 4 story high - how do these structures stay erect???
Can someone explain what is the advantage of getting yourself this kind of dea, in Burnaby of all places?
I wonder how expensive this lifestyle will get few years down the road once this crap starts rotting away. It’s like cocaine, I tell you…
Unbelievable.
August 25th, 2008 at 3:59 pm
August 25th, 2008 at 4:06 pm
Yes. Some complexes work on a pseudo co-op type basis with the owners doing yardwork, cleanup, basic repairs, etc. Lower fees of course but at a cost of time but it is never recorded in the minutes. Complexes with a high ratio of retirees often do this to save some extra $$.
Also remember a house has no common area other than lawn, which does not take much money to maintain.
August 25th, 2008 at 4:51 pm
August 25th, 2008 at 4:57 pm
… more so than a short term investor or young couple who will likely move in less than 5 years?
August 25th, 2008 at 5:32 pm
In comparison, if you live in a rental building owned by either a property management company or a life insurance company, they each have long-term interest in keeping the place in top condition. Personally, if I bought a condo, I would only live in a building which either bans or severely limits renting of units.
August 25th, 2008 at 5:58 pm
The Melville residents have been complaining about renters smoking in the parkade.
but my guess is they are actually the owners kids and the parents’ still live in Asia or in Richmond and have the kids guarding their investment. These are worse than renters because they can’t be evicted and they don’t have to be screened prior to move in.
Of course the renters can be problematic too but since the Melville is $1600-$1800 for 710 sq ft it’s not just anyone who can afford to rent there. Personally I think Strata’s are bad news because if they are too small they get personal and if they’re too big then only a few peoples opinions are represented on strata.
Furthermore a building that bans rentals doesn’t preclude the Grandma down the hall from letting her junkie grandson move in who then breaks into cars in the parkade every night or an ADHD rich kid who likes to get drunk and have ten friends over every night.
Jesse you are right flippers and young couples can vote down maintenance too but old people can create the most Lord of the Flies style strata councils out there, they make the absentee owner buildings (i.e the Melville or any of the Concord Pacific buildings) look good!
That was a true story about the retirees voting to retrofit instead of replace the plumbing.
August 25th, 2008 at 7:47 pm
August 25th, 2008 at 8:36 pm
Now, the SC is dinged for the repair. Now they have to replace the old with new, tie in that new with the remediated material (can of worms to say the least). The real kicker is that the SC could have spent “x” amount of dollars years ago and now will pay “x+y” to get it repaired today. Another assessment goes out. I see this scenario on many remediated building envelopes.
The moral of the story: If you’re going to do a renovation, don’t cheap it, better spend today and not deal with problems and inflated costs of tomorrow.
From what I’ve seen in my years of experience, I will never buy into a Strata, never ever.
August 25th, 2008 at 8:45 pm
the moral of story it doesn.t matter if you are tenent or owner it doesn.t matter if you are human or building you must keep it clean and runing because there is no other alternate.
August 25th, 2008 at 9:35 pm
Elevator companies make most of their money on maintenance contracts. They will often bid on a construction contract at a bit of a loss just to get the maintenance contract. Profit margins on maintenance is ~40%.
Vancouver has lots of problem elevators starting in ‘85.
There is going to be some new buildings with ongoing elevator problems. There is a design flaw in some of the new equipment being installed.
August 25th, 2008 at 10:00 pm
August 25th, 2008 at 10:06 pm
“I have heard elevators are expensive to maintain. A friend mentioned in his 20-unit lowrise complex the elevator was the largest line item on their annual budget”
Some of that may not be maintenance, often on newer buildings instead of buying essential infrastructure the developer leases them to the tenants, it saves a lot on construction costs but is a killer on strata fees. In some cases communal areas are leased from the developer for some added $$$ in their pockets. Often on a new building strata fees will double or more in the first few years because of this practice.
August 26th, 2008 at 12:07 am
August 26th, 2008 at 8:20 am
Does it occur to anyone else that you are better off paying $19,000 than paying $30 a month for 34 years?
August 26th, 2008 at 8:21 am
Home prices plummet to a new record
“The worst performing city in the index was Las Vegas, where prices plunged 28.6% year-over-year, followed by Miami, down 28.3%, and Phoenix, down 27.9%.
In June, Phoenix prices dropped 2.6% from May, the largest decline of any city in the index. ”
All together now…
“It’s different here!”
August 26th, 2008 at 9:08 am
Vansanity, thanks for the personal experience. More confirmation that I will avoid strata buildings at all costs.
Open question for everone: do you think New York-style co-op buiildings could avoid alot of these problems? Seems to me they would, even if they were more normal priced buildings and not penthouses over the Park. Maybe someone should start some nice co-ops in Vancouver…
August 26th, 2008 at 9:54 am
“Does it occur to anyone else that you are better off paying $19,000 than paying $30 a month for 34 years?”
You think paying $19,000 is better than paying $12,240? If that’s true I’ll give you $12,240 if you give me $19,000. According to your logic you’re getting the better deal right?
August 26th, 2008 at 10:02 am
In theory a group of people could get together, put together financing, and hire someone to build a co-op, but that’s very unlikely to happen except for groups with close bonds such as religious communities, etc.
Note I’m talking about equity (you can sell your share for a profit) co-ops like they have in NYC, not the non-equity co-ops that CMHC used to fund and which can be found around Vancouver.
In a non-equity co-op you have to sell your share back to the co-op when you leave and you get your money back with a nominal amount of interest.
August 26th, 2008 at 10:02 am
August 26th, 2008 at 10:06 am
No. The $30 per month is for proper regular maintenance, the $19k assesment is just to do basic patching to the exterior but doesn’t include the roof or other issues that regular maintenance would have prevented.
Which used car would you want to buy, the one with proper regular maintenance or the one with no maintenance, but they changed the oil and ran it through the carwash before selling it?
August 26th, 2008 at 10:13 am
August 26th, 2008 at 10:18 am
August 26th, 2008 at 9:54 am
VanGuy
“Does it occur to anyone else that you are better off paying $19,000 than paying $30 a month for 34 years?”
You think paying $19,000 is better than paying $12,240? If that’s true I’ll give you $12,240 if you give me $19,000. According to your logic you’re getting the better deal right?
You sir have a deal. You deposit $30 dollars a month in an ING direct account and in 34 years I will happily give you $19,000 for the ~$25,000 that will be in the account. Did you not finish grade 8 math? Or are you one of those types that doesn’t ‘believe’ in the time value of money.
August 26th, 2008 at 11:08 am
You forgot to calculate interest.
August 26th, 2008 at 11:19 am
I thought you could buy a brand new car in the seventies for around $2500?
August 26th, 2008 at 11:36 am
August 26th, 2008 at 11:46 am
Wood frame construction, I believe is standard around much of N.America and I think it is much better at controlling temperatures than brick. If something is brick here, it’s just a facade, anyway.
I think most refer to bad quality relating to the workmanship and/or sometimes bad design.
August 26th, 2008 at 11:54 am
Thanks for the response. Unfortunately I have to agree with you that it is not realistic to build me a brick house here.
That being said, I was in my apartment in 1996 (2nd floor out of 7, all brick: interior, exterior, inner walls, everything) during a 6th deg earthquake, and the building(s) shook like leafs, but nothing broke.
Regarding insulation: Old fashioned bricks conduct heat somehow, but today’s modern bricks insulate much better than wood+insulation.
So if bricks are out of the question, how do I make my house sturdy?
Lumber??? Like a cabin?
Regards
arit
August 26th, 2008 at 11:58 am
August 26th, 2008 at 12:05 pm
Wood frame can achieve far higher insulation values than masonry cavity for a given wall thickness because you can fill the entire depth of the stud (4″ to 6″) with insulation, as opposed to a typical 2″ in a masonry cavity.
And anyway, you don’t want sturdy in a seismic zone, you want light and resilient. If you want it to last you detail and build it well using appropriate materials and perform regular maintenance.
August 26th, 2008 at 12:23 pm
MLS: 726179
Listed in January at 1,099,000
Re-Listed in April at 1,100,000
Lowered in May to 1,040,000
Lowered in July to 998,000
Raised at the beginning of August to 1,102,500
Just lowered to 975,000
Raising the price before a drop to make it look like a bigger drop than it actually is… does anybody actually fall for this?
August 26th, 2008 at 12:28 pm
Evidently not since its been sitting on the market for more than six months. Looks like this tactic is just a waste of time.
August 26th, 2008 at 12:39 pm
Crazy story about the earthquake, glad to see you made it out OK.
August 26th, 2008 at 1:35 pm
Arit, now you’re being foolish. ‘Modern’ (by which I assume you mean concrete)
You see, one assumes something, and the other one becomes foolish. I meant more like this:
The ThermalBlock
“High “R” values range from 19 to 38.”
http://www.thermalblock.com/
Regards,
arit
August 26th, 2008 at 1:41 pm
“I think that over our lifetime, wood vs. brick doesn’t matter in terms of what we require”
It’s not that, machiatto. I want my home to be bulletproof.
Yes, I am crazy. Yes this is Canada, Yes it won’t happen here.
But, 2 years ago a bus blew up underneath my dad’d building, and no one got hurt inside the building (19 dead in the bus). 3 years ago a HUGE bomb was discovered under my Mom’s building (it didn’t explode). These are two different buildings.
So yes, I am paranoid, but my house will be bulletproof.
Best regards,
arit
August 26th, 2008 at 2:02 pm
The only way bankers can lure people to give them their money (to play with) is to promise interest. So instead of spending you hard-earned dough on booze and hoes today, you give it to the banker who “keeps” it for you for a long time in hopes of making it big one day thanks to “the miracle of compound interest”. After a long wait you get your money back, only to discover that even with the interest it can buy you the same amount of booze and hoes as it did 30 years ago, except that you’re too old to drink or have sex anymore anyway, so it was all for nothing.
Isn’t basically what it is?
August 26th, 2008 at 2:23 pm
The reason money pays interest is that money can be used to buy capital, and capital yields income. It has nothing to do with inflation, although the nominal interest rate will adjust for inflationary expectations. But the real interest rate is based on the real return on capital.
August 26th, 2008 at 3:03 pm
That website lists no distributors, no prodcut cut sheets or specifications, no reference to relevant CSA/ANSI standards, no independent lab test results. Compare it to a site like this one: http://www.r-control.com/ (to take a random example of an actual building product manufacturer).
Shouldn’t people around here be a little better at seeing through bullshit claims? Just because you read it on the intertubes doesn’t make it real.
As to making a place bulletproof, the doors and windows are going to let you down long before the walls do!
August 26th, 2008 at 3:18 pm
Well, I am not sure what is the exact point you want to make. But since we are not going to build with bricks let’s drop it.
Regarding bullet proof houses: If you wish to discuss it in more depth (that is something I have experience with), let me know and I’ll link you to a place we can chat (in IM). I prefer not to derail the thread on this topic.
Best regards,
arit
August 26th, 2008 at 3:22 pm
I wonder where those guys spent their money… 1.5 million joints form just one crop!
That and the fact that Real Estate Industry and Organized Crime seem to have a cozy relationship these days makes me think that the downfall of this monster will take a little longer than we hope for.
August 26th, 2008 at 3:47 pm
Nuff said.
August 26th, 2008 at 4:07 pm
Exactly. Even criminals using property to launder money will sell once the market starts dropping; at the end of the day they’re still investors/speculators.
August 26th, 2008 at 4:09 pm
The Beeb had a report on Vancouver’s enormous drug trade so it must be worse than LV or Miami. We know major Asian drug lords and thieves reside in Vancouver — I think there are a few dozen of them at least — and are supporting high prices by laundering their offshore money by buying the requisite thousands of properties needed to set prices at the margins. Therefore high prices are justified.
Odds are one of the readers here is renting one of these properties purchased with drug and blood money.
August 26th, 2008 at 4:33 pm
This is different from Vancouver in that B.C. has a 6 billion dollar industry in marijuana.
August 26th, 2008 at 4:44 pm
The marginal buyers are the ones who are least able to afford the properties, not the most able.
August 26th, 2008 at 4:46 pm
You don’t think that drugs are a big chunk of Miami’s economy?
August 26th, 2008 at 4:54 pm
The only difference is when those drug buggers get caught they go away for a long time and get all their stuff confiscated and our drug scumbags get away with a slap on the wrist…
August 26th, 2008 at 5:23 pm
With higher risk one would expect a higher return, no? Wouldn’t there be more $ amongst the US dealers and traffickers, jailed or not? By extension I would think these extra profits would flow into real estate yet prices are dropping nontheless.
August 26th, 2008 at 5:32 pm
http://www.latimes.com/busines.....2318.story
August 26th, 2008 at 6:10 pm
August 26th, 2008 at 6:47 pm
RCMP estimates total drug traffic at between 11 and 46 billion annually (for Canada). Let’s pick the middle ground and say 25 billion. BC is well under half of Canada’s total, let’s guesstimate 10 billion with 5 of that being outgoing 3 incoming and 2 for made and sold here (I think so far, if anything I’m exaggerating the numbers in a direction that is very conservative for my case). That 2 billion is a write off because there’s no money flowing in to BC from that.
So a total high ball number of 8 billion vs 190 billion BC GDP is 4%. Even less than the “rich foreigner” money that we all laugh at. In reality I’ve swayed the numbers your way so much it’s more likely well under 2%.
In other words the whole drug argument for high prices is as much a crock as the Olympics, rich foreigners or retiring boomers.
August 26th, 2008 at 8:43 pm
Why don’t you join the police force or be an olympian and bring us the gold you loser!
buy now before rent hit your ear drums.