# stay in my condo with high fee or get high priced stacked town with low fee



## Mulak (Feb 7, 2017)

Hi

I have a condo right now that I'm currently renting out.

I'm planning to move in this summer but I'm curious if I should sell the condo and get a stacked townhouse condo instead.

I bought the condo 2.5 years ago for 285k, put 20% down, $432 biweekly mortgage payment at 2.65% fixed plan (1.5 years left). My maintenance fee is $421/month and it now worth 380k in a 10 years old building.

The stacked townhouse I'm looking at are priced around 460-499k with fee at $200-240/month. They have different phases, so they are ranged from 1-4 years old I believe. I have 75k cash to help to reduce the principal amount.

My end game is to get a freehold but it not feasible right now because freehold are easily starting at low 600's and that's another 4-5 years of saving unless in the near future i'm able to improve my financial situation to build it faster.


what do you guys think?

I wasn't sure because of the closing costs from selling the condo and stacked townhouse negate or take most of the profit before getting the freehold


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## AltaRed (Jun 8, 2009)

I agree that any decision to sell the condo and purchase a stacked townhouse is costly and will likely take at least 5 years to pay out, perhaps more (rule of thumb is upwards of 10 years to make it worthwhile). Whatever you decide to do should be based on the premise of staying put for at least 5 years.

That aside, high rise condos are simply costly places to live compared with strata/freehold townhouse or even a strata stacked townhouse. High rise condos have considerably more sophisticated infrastructure that is more costly to maintain, from HVAC systems to elevators to facades. They are often overseen by amateur condo boards that don't know what they are doing relative to the more simplicity with low rise wooden (or even concrete) structures. However, be aware of 'low' condo fees that often occur in newer complexes. Usually not enough is being put aside in the reserve fund in the early years.

My reaction would be... why not stick with the condo for another 2-5 years until you can potentially make the leap to a standard side-by-side townhouse arrangement?


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## Just a Guy (Mar 27, 2012)

My first question is, can you generate enough revenue to cover the costs of either of these places? I suppose if you pay down the principle enough you could artificially claim you're making a profit, but that's not really true.


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## AltaRed (Jun 8, 2009)

It obviously depends on the OP's earning power to carry the mortgage et al like any other homeowner.


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## Mulak (Feb 7, 2017)

AltaRed said:


> I agree that any decision to sell the condo and purchase a stacked townhouse is costly and will likely take at least 5 years to pay out, perhaps more (rule of thumb is upwards of 10 years to make it worthwhile). Whatever you decide to do should be based on the premise of staying put for at least 5 years.
> 
> That aside, high rise condos are simply costly places to live compared with strata/freehold townhouse or even a strata stacked townhouse. High rise condos have considerably more sophisticated infrastructure that is more costly to maintain, from HVAC systems to elevators to facades. They are often overseen by amateur condo boards that don't know what they are doing relative to the more simplicity with low rise wooden (or even concrete) structures. However, be aware of 'low' condo fees that often occur in newer complexes. Usually not enough is being put aside in the reserve fund in the early years.
> 
> My reaction would be... why not stick with the condo for another 2-5 years until you can potentially make the leap to a standard side-by-side townhouse arrangement?


my concern was the rising fee of the condo because i had the same fee for 2 years at $409 and this year it went up to $421 because they blaming it on the new minimum wage rate and contracts with the maintenance company goes up and make me wonder if that going to be happen again when the $15 wage come next year as well.

the stacked town i'm looking at... the oldest phase which is probably 4-5 years old got the highest fee I have seen on the market is $235 and the newest phase (a year old) got $200 fee. it probably will stabilize at 235-250 once it matured, i'm assumed



Just a Guy said:


> My first question is, can you generate enough revenue to cover the costs of either of these places? I suppose if you pay down the principle enough you could artificially claim you're making a profit, but that's not really true.


I'm not planning to rent out the stacked townhouse if that what you saying.

I'm renting out the condo to build up some equity and save money while i'm staying at home with my mother in order to get a town. I'm going to be 31 years old on march 28, and just want to live on my own soon.

I thought the stacked town condo will appreciate value faster than the condo because someone bought a stacked town in the same area for 365k last year and selling it under 500k. So I thought I would get a stacked town and build more equity faster to get my end goal of a side by side town or freehold


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## AltaRed (Jun 8, 2009)

The problem is you don't know how fast the maintenance fee will increase on the stacked townhouse complex, nor do you know if the stacked townhouse will appreciate faster on an absolute percentage basis than the condo. [But likely will when measured against your equity only]. Alternatively, there could be a substantial downdraft in RE prices overall, particularly if you are located in a 'heated' area such as GTA or GVR.


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## Mulak (Feb 7, 2017)

AltaRed said:


> The problem is you don't know how fast the maintenance fee will increase on the stacked townhouse complex, nor do you know if the stacked townhouse will appreciate faster on an absolute percentage basis than the condo. [But likely will when measured against your equity only]. Alternatively, there could be a substantial downdraft in RE prices overall, particularly if you are located in a 'heated' area such as GTA or GVR.


yes that is true on both points

it would be nice for freehold to take a price dive lol ... I live in Oakville, ON


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## Just a Guy (Mar 27, 2012)

I'd still question your cash flow on the condo...you may think you're building equity while, at the same time, are losing money on a monthly basis because the cash flow doesn't cover expenses.

Not to mention the losses caused by realtor fees, mortgage penalties, lawyer fees, etc. It takes a long time to break even on most real estate transactions.


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## Mulak (Feb 7, 2017)

Just a Guy said:


> I'd still question your cash flow on the condo...you may think you're building equity while, at the same time, are losing money on a monthly basis because the cash flow doesn't cover expenses.
> 
> Not to mention the losses caused by realtor fees, mortgage penalties, lawyer fees, etc. It takes a long time to break even on most real estate transactions.


I'm getting $1600/month so after paying everything except the down payment I'm getting $150/month


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## AltaRed (Jun 8, 2009)

$150/month is a negligible amount, i.e. slimmest of margins. However, it is not relevant if the OP is going to live in the condo imminently, or sell it anyway.


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## Mulak (Feb 7, 2017)

AltaRed said:


> $150/month is a negligible amount, i.e. slimmest of margins. However, it is not relevant if the OP is going to live in the condo imminently, or sell it anyway.


correct...

that why I'm trying to decide if it worth moving in the condo soon or sell it and get one of the stacked town condo because side by side town cost another 100k and possibly more if the real estate market still going up over the next 4-5 years which it will probably take me to save up the money to get the side by side town


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## sags (May 15, 2010)

If I lived in Toronto or Vancouver, I would only purchase a unit in a low rise revamped warehouse or similar building located in good area.

High rise condos don't look very good when they get old and their value will start to decline as the buildings continue to age.


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## Mulak (Feb 7, 2017)

sags said:


> If I lived in Toronto or Vancouver, I would only purchase a unit in a low rise revamped warehouse or similar building located in good area.
> 
> High rise condos don't look very good when they get old and their value will start to decline as the buildings continue to age.


Make sense

My real estate agent said the closing cost for my condo and a 490k stacked town estimated at 25k.


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## Spudd (Oct 11, 2011)

It makes more sense to live in the condo you already have. The difference in monthly fees is $221, assuming your current place stays at 421 and the new place stays at 200. It will take you 9.4 years to start making a profit from living in the stacked town instead of the existing condo. And then if you sell that stacked town, you have even more closing fees to pay. 

The best thing to do is keep the condo, live in it, and save up cash towards your eventual goal of a freehold unit.


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## AltaRed (Jun 8, 2009)

Spudd said:


> It makes more sense to live in the condo you already have. The difference in monthly fees is $221, assuming your current place stays at 421 and the new place stays at 200. It will take you 9.4 years to start making a profit from living in the stacked town instead of the existing condo. And then if you sell that stacked town, you have even more closing fees to pay.
> 
> The best thing to do is keep the condo, live in it, and save up cash towards your eventual goal of a freehold unit.


That is the conclusion I would have come too. A certain thing based on real math versus 'a hope and a prayer'.


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## Mulak (Feb 7, 2017)

Spudd said:


> It makes more sense to live in the condo you already have. The difference in monthly fees is $221, assuming your current place stays at 421 and the new place stays at 200. It will take you 9.4 years to start making a profit from living in the stacked town instead of the existing condo. And then if you sell that stacked town, you have even more closing fees to pay.
> 
> The best thing to do is keep the condo, live in it, and save up cash towards your eventual goal of a freehold unit.





AltaRed said:


> That is the conclusion I would have come too. A certain thing based on real math versus 'a hope and a prayer'.


ahh man I don't know what to do haha


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