[quote=sdrealtor]The old any and all HOA or MR is evil theory you consistently put forth.[/quote]
I never stated anywhere on this forum that MR and HOA were “evil.” I even stated that these *newer* neighborhoods (located within CFD’s) seemed to be “big draws” for a huge subset of buyers.
The “theory” I have “consistently put forth” here, regarding paying MR (and to a lesser extent, HOA dues in excess of $50 mo) is that these costs have to be factored in as eating into profit at the time of resale, instead of adding to resale value (if the $$ was instead spent for materials and labor for repairs/upgrades).
For instance:
3/2/2 in Chula Vista (built ’89, 1700 sf on 4500 sf lot), purchased in 2000 for $310K with $3K annual MR and $2K annual HOA dues
The total extra cash outlay for ten years of owning is $50K (in MR and HOA dues). Only basic repairs/painting done to ready it for market in 2010.
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3/2/2 in Chula Vista (built ’58, 1640 sf on 9000 sf lot), purchased in 2000 for $310K with no MR or HOA dues
$50K was used over ten years to upgrade kitchen, baths and landscaping, all finished at time of marketing it in 2010.
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Today, the owners of the first example threw $50K away into “thin air.” The owners of the second example put $50K into their property in the form of repairs and upgrades.
It’s fodder for another thread, but when I get more time, I’m going to find two examples that have sold today with these (or very similar) parameters and show what each has recently sold for.
I would venture that the “recent sold” price of the first example would be lower than that of the second example (just by virtue of having more “distressed property” activity around it). And no, I won’t have to go “cherry picking” to come to this conclusion :=]
The newer the tract is, the more exacerbated this situation becomes towards the CFD-lying property, due to higher MR and often-times higher HOA fees.
My “aversion” to MR is not about it being “evil.” It’s about it not making good investment sense (in the long run) to invest in a principal residence (or rental property) that lies within a CFD. In addition to being highly taxed, these properties have an intrinsic monthly “cash-flow” issue that will never go away (HOA dues still remain after the 20-40 yr bonds are paid off). It’s even more important now for a current buyer to carefully consider these “extra costs,” since RE appreciation is no longer “assured.” :=[
