If you talk with a condo owner who has had the unfortunate experience where their building has required major remedial work, like in the case of a leaky condo where the entire exterior of a building needs to be replaced or repaired, they will tell you how expensive this can be and the steep special levies and assessments they have been hit with to get the building fixed. Even more unfortunate is the fact that when the owners decide to sell their unit they rarely ever get the money spent fixing the problem back from their selling price. I have seen 20 year old units where the owners have just spent $50,000 fixing a leaker - sell the unit for the same price as the 20 year old unit in the building next door. Now, with all the depreciation reports coming out over the next 15 months what would you rather buy? A building that has just spent $50,000 per unit in repairs and is essentially brand new (new roof, new siding, new windows repaired balconies etc etc) or a unit that in 18 months is going to have a depreciation report spelling out what's going to need to be done to it over the next 10 to 20 years and at what cost. Remember even if the building next door is not a leaker it's still going to need a new roof, windows and balcony repairs sometime in the next decade due to age. I see a buying opportunity on these extensively updated buildings before the playing field levels out and all the depreciation reports are in.
This entry was posted on September 11th, 2012 by Owen Bigland | Posted in Video Blog