Condo: value of old builds vs new builds

[ee2k]

This is something that I had to face when I purchased my condo: buy in a newer/new building or an older building based on the criterion I list below. Looking at some listings for new buildings where square footage is now at a premium (that other thread sees a Mark on 10th unit with about 780sq ft 2 bed 2 bath selling for $500K+,) it leaves me wondering: what is good VALUE today in the condo market? It may also be worth keeping the scope of comparison to the downtown area.

Old
+ Established building with longer term owners that sets tone to building
+ Larger square footage (older units with 1000+ sq ft space for 2 bed 2 bath)
+ Lower price than new per square foot
- Usually higher maintenance costs including higher condo fees
- Large maintenance activities on the horizon given age of building

New/Newer
+ Usually lower maintenance costs (which don't seem to last long)
- Smaller square footage which is now the norm (many new buildings with a 2 bed 2 bath with 700-900 sq of space)
- Unknown developer related warranty issues
- New building standards
- More transient nature of owners/tenants, many rental units

Large undertakings are more typical with older buildings, but neither is safe from special assessments for similar work.

If your plans include going for a condo (not about a house vs condo topic,) what would be your rationale for selecting age? What would you buy into now?

[Fly Fishin']

Check to see if the older unit had had a new exterior on it. We are doing it now on our condos and found a few rotten spots but we now know they are all fixed but it could have been much worse. If it's a high rise the check for the roof repairs aswell. If the envelope is new then I would have more trust and less likely of a special assessment.

[gwill]

With new construction I would look into past projects. How are they holding up? How are condo fees? What about assessments? If your new project is a multi phase project always buy into the second or third building as they work out any kinks in the first building and get better with the next building. You could go as far as to check with the courts to see about law suits on past projects.

As for old buildings the big thing is the reserve fund and Looking into the documents to see how they are repairing things. One of my buildings I have an investment property in has a pretty sweet reserve fund because we started setting aside money when the builder was building phase 2 and 3. There are 3-4 other buildings by other developers in the same area who didn't bother with this yet their buildings are as old as the one I bought into. They worried more about low condo fees then preparing for the future. Our reserve fund is approaching 700k while other buildings have just started there's. OUCH!

Overall I would rather pay higher condo fees in a building that's been well maintained then a building that tried to keep them low. New construction can be bad when it comes to this.

On the flip side if your condo will only be your residence for the next 5-7 years then you could get in and out before anything major happens and enjoy the low condo fees knowing your not staying long term.

[Sugarphreak]

...

[ee2k]

Originally posted by Sugarphreak
Newer condos you don't have to worry too much about immediate maintenance or surprise 10K assessment bills. The fees will go up eventually, but they tend to do so as maintenance requirements arise.

Anything older than about 10 years you really need to look into the condo board, see what kind of reserve they have, how they plan, and what kind of work is planned 10 or 15 years down the road.

Looking through the strata rule book is also a good idea so nothing catches you off guard. Condo boards always tend to draw weird controlling people.... and the longer they are in place, the more odd and eccentric they tend to get. Stupid rules and regulations can get added that will make your life there miserable if you are not careful.

For space; older condos do tend to have better square footage, but it isn't always usable and efficient. Long hallways and awkward corners can eat up huge amounts of footage. Open concept floor-plans and clever design has really reduced the amount of space needed for a condo to feel big and livable. You really need to assess each unit independently, things like lots of windows can make a difference in how big the unit feels, even moreso than actual space sometimes.

IMO one of the worst thing about condos is noise from neighbors... particularly hardwood installed without padding above yours. Every chair or table that moves sends chalk-board screeches into your unit. This isn't limited to older condos either; my unit in Arriva drove me crazy because the guy above had hardwood and every time he pulled his chair out to sit down I knew it. A good way to at least try and check for this is to do walk-throughs at around 6:00pm when occupants are home. Hell, if you can get away with it go knock on the neighbors door and ask them about noise in the condo.

Finally, always check the appliance and faucet package. Shitty appliances means somebody somewhere is going to suffer a break and flood out a bunch of units. I have been lucky not to have suffered that myself, but I know people who have and it is a huge headache.

Interesting points. The visual assessments and document reviews are building specific. I have found it appalling that I have friends in newer building that have had >$10K assessment already which doesn't preclude newer buildings from such unforeseen expenses.

Regarding the hardwood floor you mention, I wonder if your building had requirements for padding under the hardwood. My building does, and must meet specific criteria. If a resident has such noise issues, and didn't use padding, the board has the right to require that they rip it out.

[flipstah]

Originally posted by ee2k
This is something that I had to face when I purchased my condo: buy in a newer/new building or an older building based on the criterion I list below. Looking at some listings for new buildings where square footage is now at a premium (that other thread sees a Mark on 10th unit with about 780sq ft 2 bed 2 bath selling for $500K+,) it leaves me wondering: what is good VALUE today in the condo market? It may also be worth keeping the scope of comparison to the downtown area.

Old
+ Established building with longer term owners that sets tone to building
+ Larger square footage (older units with 1000+ sq ft space for 2 bed 2 bath)
+ Lower price than new per square foot
- Usually higher maintenance costs including higher condo fees
- Large maintenance activities on the horizon given age of building

New/Newer
+ Usually lower maintenance costs (which don't seem to last long)
- Smaller square footage which is now the norm (many new buildings with a 2 bed 2 bath with 700-900 sq of space)
- Unknown developer related warranty issues
- New building standards
- More transient nature of owners/tenants, many rental units

Large undertakings are more typical with older buildings, but neither is safe from special assessments for similar work.

If your plans include going for a condo (not about a house vs condo topic,) what would be your rationale for selecting age? What would you buy into now?

Good value is what you can afford in the long run.

I'm in an old building but the foundation is concrete (yay!), has a solid reserve fund, and had the foundation checked by engineers. As long as the condo board has their shit together, old builds should be an attractive bargain.

[killramos]

[suntan]

^ Should replace with picture of Jared.

[HiTempguy1]

Originally posted by killramos

Well we can agree on one thing.

New(er) is better. Technologies and materials are vastly better even from a decade ago, along with the regulations and code that developers must adhere to. That doesn't stop people from cocking up the actual construction, but that is a gamble you take with all places, and size for size should cost the same to fix new or old all things considered.

Additionally, an older building WILL EVENTUALLY need repairs no matter what, on top of fixing unknown cockups that may have gone unnoticed due to poor workmanship, whereas a new building only suffers from poor workmanship in the beginning. There have been lots of changes to Alberta New Home Warranty, especially in regards to condos for the better recently.

[Sugarphreak]

...

[gwill]

Define old vs new? I would only consider a condo new if it's 5 years old or less. Seems like others have a difference of opinion on that.

As for new construction being better... That's a total crap shoot dependant on the builder who built the condos. I know of 3-4 newer condo buildings already in the litigation phase and they are less then a few years old. Just because it's new doesn't mean you don't need to research your builder, their Past projects, or lawsuits from past projects.

There are good and bad with each. I wouldn't have an issue with new if it was built by a good builder.

[revelations]

Originally posted by Sugarphreak
Newer condos you don't have to worry too much about immediate maintenance or surprise 10K assessment bills. The fees will go up eventually, but they tend to do so as maintenance requirements arise.

My wifes (1-2 year old) condo had a $10-30k special assessment after it was discovered the builders completely and utterly F'd up the base height of the condo off by a foot. They went and cut into structural beams, etc. in order to allow doors to open for eg.

No recourse from builder/new home warranty and the board was too pussy to go after the developer.

[Sugarphreak]

...

[revelations]

I have no idea, we sold a while ago as the board was a bunch of dumbasses and the property management co. (Llarlyn) was worse than useless as they were making constant errors.

I was also in Van around that time - I rented my suite first (thought about buying) and sure enough it started to leak!

[oz388]

For condos at similar location, the newer is always better than older.

[gwill]

Originally posted by oz388
For condos at similar location, the newer is always better than older.

Lmao

[whiskas]

at all the "newer is always better" talk.

There are many boom era condos out there that are less than 10 years old with huge special assessments. Either to repair builder mistakes, or to pay legal fees to sue the builders who made the mistakes.

Example: you'd be better off in a 70's/80's era condo than any of the "new" condos that POV built in the last 10ish years.

[HiTempguy1]

Originally posted by whiskas
at all the "newer is always better" talk.

There are many boom era condos out there that are less than 10 years old with huge special assessments. Either to repair builder mistakes, or to pay legal fees to sue the builders who made the mistakes.

Example: you'd be better off in a 70's/80's era condo than any of the "new" condos that POV built in the last 10ish years.

Clearly, you didn't read the rest of anybodies posts.

Any building, new or old can have issues. New builds don't have the wear and tear associated with them.

And of course, on the specifics if POV vs 70/80's era condo, that's like, just your opinion man.

Its no different than buying a newer vs older car, except houses/condos don't follow what in any other case should be considered a depreciating asset because the land value increases faster than the property decreases.

[Xtrema]

Buy new, flip it in 5 years to another new one before problems shows up and/or the shell corporation that built it get dissolved.

Condo is more of a life style choice than a investment.

Exception would be locations... like penthouses, and the one close by the river. I just don't forsee Calgary being a condo city like NY or Vancouver downtown where value goes up fast enough to cover all the expensive maintenance items with age.

[chkolny541]

Originally posted by whiskas
at all the "newer is always better" talk.

There are many boom era condos out there that are less than 10 years old with huge special assessments. Either to repair builder mistakes, or to pay legal fees to sue the builders who made the mistakes.

Example: you'd be better off in a 70's/80's era condo than any of the "new" condos that POV built in the last 10ish years.

Because that's obviously the norm