“We bought a house with some family help and moved out, but decided to keep the condo because we couldn’t sell it while it was tarped up.”

“My wife and I bought a two bedroom condo (Vancouver suburbs) when we had our first child. Had a second child, things were fine. Had a third child, and things went off the rails. The third ended up having a laundry/pantry room as a nursery with a portable crib. At the same time the condo (our building, but not our unit) sprung a massive multi-million dollar leak.
We bought a house with some family help and moved out, but decided to keep the condo because we couldn’t sell it while it was tarped up. We rented it out (for less than the mortgage payment) to a family that burned every countertop, the carpet and the vinyl balcony deck with a hot pot. They moved out and another family moved in – with a cat, and with a kid that drew on walls. All while we were paying out an ever growing series of special assessments for the building repairs.
We finally decided to cut our losses and sold the condo for half of what we paid for it. Net net we LOST an amount equivalent to the original purchase price.
Moral of the story: Don’t buy a home that doesn’t match your stage of life and that you don’t plan to be in for a good 10-15 years. And don’t buy a leaky condo.”

Leaky Condo Hell at VREAA, 29 Feb 2012 at 7:59am

30 responses to ““We bought a house with some family help and moved out, but decided to keep the condo because we couldn’t sell it while it was tarped up.”

  1. Don’t buy a condo with any intention of renting it out. There are so many bad tenants out there. Damage deposits are seldom enough to pay for damaged left by the tenants after they move out.

    Instead, buy a house and rent out the basement suite. That way you can keep an eye on the tenant at all times.

    • Basement Suite

      “Instead, buy a house and rent out the basement suite.”

      I have a better idea: Wait until houses drop back to Earth (aka 60% or so) and you can actually buy one without a mortgage helper.

      • Basement Suite

        I should say, at LEAST 60% and tbh more in many areas.

      • Sfh will always be a more difficult buy for many Canadians. Having a mortgage helper will make the purchase much easier, even with sfh at a lower price. I’m not saying to buy now, but even at 30% off, a mortgage helper makes it possible to own a sfh in Van.

      • Basement Suite

        Maybe but 30% off doesn’t begin to interest me relative to current prices.

      • What if prices don’t drop 60%? Do you have a backup plan Mr. Smarty Pants?

      • “What if prices don’t drop 60%? Do you have a backup plan?”

        Stick a ‘renos for cheap’ van on the road and buy a $100 hotdog cart.

      • Basement Suite

        “What if prices don’t drop 60%? Do you have a backup plan Mr. Smarty Pants?”

        Thanks for the compliment, and yes I do: rent, and invest in stocks (as I am currently doing). If tulip bulbs had stayed at a million dollars a bulb back in the tulip craze, I would have had a backup plan too: go to a botanical garden and look at one, rather than buy one. But you would have been a proud owner of a tulip bulb, I can tell, your name on the tulip blog would have been Tulipbulbowner, and you would have rode that thing all the way to 0.

      • Basement Suite

        “Stick a ‘renos for cheap’ van on the road and buy a $100 hotdog cart.”

        I’ll keep it in mind, but I do have a career already.

      • I meant as an investment. Anything in a superficial bling industry. The market would be ripe.

      • Basement Suite

        Hey I like your thinking 😀 Can’t be too diversified, and like buying a trowel in the tulip craze, you wouldn’t be short on work.

    • Ralph Cramdown

      There are so many bad tenants out there.

      It’s the flip side of ~70% of Canadians now being owners. Who’s left?

    • But its also well-known that basement suites get the very worst tenants. You are scraping the bottom of the barrel, and you are putting these people under the same roof as your family.

      They know where you live. Think about it.

      This applies doubly or triply so in sh!tholes like Surrey or Maple Ridge.

    • If you buy a quality condo in a good location you can always attract GOOD tenants if you price it right & do your due diligence when selecting through applicants. I have rented to numerous tenants and all of them were quality people!

  2. This anecdote could have been posted in the ‘spot the speculator’ series, as anybody in Vancouver who is holding more than one property is very definitely a speculator, by any definition of the word. Folks get into it very innocently, like this couple.

    • Renters Revenge

      Calculated Risk had a huge discussion just as the US bubble started to burst about what he called “accidental landlords” – which is probably how I would categorize this anecdote. I think there are more accidental landlords around here than is commonly believed and those numbers will swell as the bust ensues.

      • “Accidental landlords” are all over the place; just look at aggregate sell/list over the past 4 years. The ones who will drive the market are the ones who have cut their teeth on some ne’er-do-well tenants and want OUT

    • There is nothing wrong with being a speculator. I would do the same, just not now. You can’t blame speckers for wanting to make a chunk of coin. They are taking the risk of making or losing money. Right now it looks like the risks are higher. People learn when losses occur. I’m sure most of us here know that. We are the other speckers, spectators.

      • “There is nothing wrong with being a speculator.”

        True enough. We all speculate, even by not investing.

        But, that said, nobody cried for me when I lost thousands of dollars in mutual fund during recent market turmoil. That said, I didn’t cry either because my standard of living does not depend upon how well they do.

        On the other hand, many RE speculators have risked virtually everything that they own on one asset class at historically high prices. If (when!) things go south, they will be in pain.

        Mutual funds, ETFs, bond funds, etc. are naturally diversified. Holding a basket of such investments is even more so diverse. So, yes, I sometimes take a bath on the markets. And, yes, I do things like move into much more stable funds (bonds, lately) when there’s turmoil on the horizon. But I could just as well sit tight and probably do just as well.

        And, again, the key here… my family’s standard of living is not tied up in how my investments move. We also bought a house in a place where they are affordable, making a conscious choice to live in such a place. And we are paying it off rapidly. Between that, and continual contributions to diverse investment vehicles, we are moving to a point where our house-assets are just a reasonable-sized chunk of our overall pie.

        I can say quite confidently that even a 60%+ devaluation in our house price will not be catastrophic for us. Heck, we could even currently survive through a 80% or higher reduction because we did the traditional 25%/25-year thing in the first place.

        Long and short of it… yes, we are all speculators. But some of us make better decisions than others. And those of us who do don’t want to be stuck bailing out those who have been living high off the hog for the past few years.

      • Eg

        You lost money in Mutual funds because you panic and sold? The markets did recover and you should of seen those losses cured. 😄

      • I guess I wasn’t clear. No, actually I lost money temporarily because I held on during the dive. If I *had* sold at the bottom I’d have cemented the losses. I didn’t, and I mainly recouped.

        My overall point is that there are a lot better, and a lot more liquid, investments out there than real estate. And once you plop a house or another structure on the land, your costs and risk just increase further.

        Most people should buy a house to live in (or rent in some markets). They should buy easily liquified funds to invest in. And only if they have excess money to play with should they buy further real estate.

        But, that’s coming from someone who’s pretty conservative on these things. I realize that some folks are less risk averse. Find and dandy. But they’d better not come crying to those of us who were more prudent when they find the creditors hammering an eviction notice on their door.

  3. Basement Suite

    “Folks get into it very innocently, like this couple.”

    SOME folks do, but lots of others (most?) multi-property owners are not so accidental I suspect.

    • True.
      But the ‘covert speculators’ are intriguing and important. There are a lot of them out there, most see themselves as doing something rather prudent (rather than partaking in high risk gambling), and they are likely to respond to significant price drops like complete amateurs (sell low).

  4. Hey blog dogs. Avg price for Van is up. But with fewer sales and a couple sales of high end homes, this edged the number higher. Don’t get too excited Bullys.

  5. This anecdote is me except we only had one kid and one on the way (which was 1.5 too many for the condo), no laundry room to even put one in, the losses were *only* 12% of the original purchase price (4X leverage…), and the tenants weren’t as pyrotechnical (according to neighbours their considerable efforts were in the bedroom), despite rent only being about half the actual running cost. We also rode out the leaky repairs to sell, but moved on because of the family size. Oh, and you RENT a bigger place in that situation, don’t BUY MORE.

    Yes, she was cute.

  6. hard to believe there’s still the leaky condo problem…..hard to believe strict building codes have not been adopted in a rain forest. this is the same story from 20 years ago!

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