Archive for the 'Condo Knowledge' Category
Besides Location, Condition, Size and Parking in the New Orleans Condo Market; Common Areas are becoming a more important factor in value and in demand. More people want areas where they can relax without going outside the complex. These amenities are courtyards, pools, gyms, lobbies, atriums and things that add to the pleasure of condo living in the city of New Orleans.
One of the best ways is to show you the types of things that you will not often see from the outside of the condo complex. So lets take a look at some of my favorite ones….Lets start with the pools. It is as much as the visual images as people wanting to swim. Having a pool in the courtyard is so soothing and cooling on a Summer day and we have plenty of those. Water tends to have the relaxing effect…..
What a great way to meet new people. A great way to bond with your friends. Your pets like the outside areas where allowed. If this is a second home then you want and appreciate areas to relax and enjoy family and friends. Most courtyards have grilling areas and grills. Just bring your own food and drink. No need to drive or dress up if you just have to walk out your door….
Take a look at some of the condo complexes and see what you are missing or have not seen what some of the common areas look like. The better the areas are kept up then the more valuable in the long run. Most are well kept and clean everyday. You do pay for these in your condo fees.
French Condos On Chartres
French Quarter Condos on Royal Street
French Quarter Condos on Toulouse
Pontchartrain Place Condos in Metairie
3915 St. Charles Ave., St Charles Gardens
Villa D’ Orleans, Edenborn in Metairie
Gallery Row Condos, New Orleans Warehouse District
Federal Fibre Mills Condos, Warehouse District
Federal Fibre Mills Courtyards
1750 St. Charles Ave. Condos, New Orleans
448 Julia Street, New Orleans Warehouse District
3300 St. Charles Avenue Condo Entrance
700 S. Peters Condos, Light and Atrium
817 Royal Street Condos, Courtyard and Fountains
Federal Fibre Mills Condos, The Lobby
Rooftop at Julia Place, Warehouse District
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In 2014 the prices of condos in the Warehouse District of New Orleans continue to climb. Over the past 18 months we have seen increases of 20% with no signs of sales slowing down. You have to wonder what is driving the prices and demand. One reason is that few developments have been built or new conversions have come to market. The price range that is showing the most activity is from 200 k to 500 k. I have had 3 listings in the Warehouse District and each has sold near full price within a week of listing. All the deals were cash.
The largest reason for the increase is that this has become a demand area for second homes. A lot of these buyers are cash buyers. Many are from Louisiana and want a place to come to so they can walk to shops, eats, drinks, The French Quarter and take the St. Charles Streetcar line to other points and leave the car behind. Many of the buyers are empty nesters that have grown kids. They all like to come and share. Several years ago it was the two bedrooms that were in demand. Now it is whatever is on the market.
The only area where sales tend to slow is above the 600 k level where demand drops off somewhat. This price range is still in demand but the increases have not been as great as the lower priced properties. This price range has had competition of 427 Notre Dame which is brand new development that is almost sold out before it is complete. All the units in this building are high end units. I am sure if another complex was brought to market it would do just as well.
There has been plenty of new rental complexes come on line in the last several years. Many of those people have decided to buy and stay in the area but there is not much to purchase.
There also several game changing projects that have just been completed or in the process of creating even more demand. The new River Walk Outlet Mall renovation with a cost of 80 million, The Saenger Theather and the South Market Project costing 200 million. The New Orleans Arena Renovations and the granddaddy of all is the new VA and LSU Medical Center. These projects are game changers for the area. What will happen from a real estate perspective is the area will spread to adjacent neighborhoods.
This is one of the units that sold within the first week that it was listed. Just to give you an idea of what you get for your money. In this market you can price your properties right on the money and expect to get close to the numbers. This is happening over and over again.
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Audubon Trace Condos in Old Jefferson, Maybe a Real Hidden Value…Not that from from Everything, “A Great Place to Live”…….
Audubon Trace Condos, Nice Values and Great Location
Audubon Trace Condos off Jefferson Highway in Old Jefferson was one of the first complexes built as condos in East Jefferson. The condos sit on 15 acres of land with ample green space and plenty of trees and shrubs. You walk out the rear gate and you have Jefferson playground which stretches to the Mississippi River on River Road. You are closer to everything that most people think. You are eight miles to the Super Dome and 4.1 miles to Audubon Park. You have a variety of routes to travel as well. Just hop on Earhart Expressway, Jefferson Highway, Airline Highway and River Road for you quick travel.
Old Jefferson is one of the safest and highest areas in the Metro Area. No floor waters here. You can walk or ride you bike to the levee for bike rides, walks, and runs. Pets are welcome and really enjoy the green spaces throughout the complex. The condos have two large swimming pools on site. Parking is easy and you can park several cars right outside you unit.
Most of the condos are townhouse styles. Most will have balconies and small patios with some tranquil views of the surrounding trees and green spaces. There is 4-5 basic floor plans with almost all having the bedrooms either down or up. Other features include fireplaces, large windows, ample storage, full size washer and dryers in the unit.
The prices have been steady for several years and think the prices are great when you look at surrounding areas and compare what you receive for your money. You may be looking to downsize and travel then this will fill you bill for under 200k price range. Looking for a second home that is close to all and has the amenities to enjoy while relaxing. Looking for a place to start home ownership with a busy lifestyle then Audubon Trace may be the place for you.
The condo fees are reasonable based on the sq. footage of the units and what you receive in return. Your fees include water, trash, sewerage, insurance, upkeep of the exterior of the building, upkeep of the ground and the professional management of the association. You only need to drive, walk or ride through the Audubon Trace Condos to see how nice they are kept.
The best part about the complex is that you can buy a unit for 100k to 150k to less than it will cost you several miles away in Orleans Parish. Here you get much lower taxes, car insurance and a much larger space. Often more updated. it is also nestled in some great Old Jefferson neighborhoods several miles from Elmwood Business Park and Oschner Hospital down river.
1805 Audubon Trace, For Only $179,805
The 1805 Audubon Trace is a good example of all the updates that have been done to the units since they were built. The newer kitchen, newer appliance, wood and tile floors, freshly painted, newer baths up and down make this a move in condo. No work to be done here. No carpet in this condo. The patio before you walk in the front door is fenced and makes a great place for your dog to watch the world go by.
The condo is 1288 sq. ft. of living with 2 bedrooms and a bath up. The kitchen, breakfast room and den are down with a half bath and laundry. Lots of natural light up and down without having any direct sun. You are an end unit which gives you more space when walk out the door. Plenty of storage up and down in this unit.
The condo fees are $362 per month. Taxes for a year with a homestead exemption would be between $1100 and $1200 per year. No water bill, no grass to cut, no gutters to repair, no need for a lawn mower just more time for you. Often times it is cheaper to buy here than to rent when you are looking at such low-interest rates and the fact that you will build equity quickly. They are FHA approved which means you can put down as little as 3.5%.
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Julia Place Condos in the New Orleans Warehouse District, They are in the Center of the District, A Review…New Listing of Condo #226
Julia Place Condos, 333 Julia Street, New Orleans
The 333 Julia Street address is home to one of the more popular condo complexes in the New Orleans Warehouse District. I call it the center of the Warehouse District. The 101 condo units cover the entire block fronting Julia Street between Commerce and Tchoupitoulas Streets. The two buildings that make up the condo association are very different. You are in the middle of the Arts District near the Childern’s Museum and s short walk to the Convention Center and the St. Charles Street Car line.
The Bemis Building on the right was a bag factory around the 1890’s. Not sure what the building on the right is. The Bemis building is most concrete beams and large floor to ceiling windows. The building on the left is wood beams, old wood floors and it much smaller. It faces Tchoupitoulas Street.
Most of the units come with parking in a lot and on the first floor of the Bemis Building. The condo association has moderate condo fees. Julia Places features a Gym that faces Julia Street. The roof top pool, viewing areas, grilling, clubhouse are hard to beat for some great views day and night. The units are about evenly split between the one and two bedrooms units with most of the two bedroom units has exterior street views.
Julia Place Condo #226 $349,226
The 833 square condo is updated and gives one the true “feeling ” of an upscale New Orleans Warehouse District Condo. It comes furnished and has a gated parking spot in the lot adjacent to the building. The unit has an updated kitchen with new cabinets, new counters, some new appliances, breakfast bar, and has an open feel with a breakfast bar. The unit has been recently painted that gives it a fresh light look and feel.
The condo features 2 bedrooms and a bath in the hallway. No walking through a bedroom to get there. Washer and Dryer in closet. Both bedrooms have warehouse windows and the living area has two. The unique crown molding and exposed brick make an inviting picture. The wood plank floors are probably original to the historic building. The exposed beams have been exposed by recent sanding. The 14 ft. ceilings give you a larger feel with lots of natural light.
This is one of the units where you just move right it and have almost nothing to do. Most of the furniture is recent and has been rarely used. It is currently a second home and most likely will be sold as a second home. I am betting it will not stay on the market long as it have few competitors on the market right now that has this feel of luxury in a great location.
The condo fees include water, exterior insurance, upkeep of the common areas, management fees, trash, sewerage, parking lots, pool, gym and reserves. You will still need an HO6 policy for inside the walls and contents.
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Since a condo association acts as a group when it comes to collecting condo fees in order to pay bills such as water, sewerage, upkeep, management, insurance and those collective payments. Most condo association collect more that is needed in the day-to-day operations so the association will have money when something unexpected happens. If your condo fees are $350 per month may go into a reserve account. This account builds money over time.
The reserve account is also important for conventional loans as they demand you have at least 10% of your operating budget for those unexpected bills. In a small association one member may quit paying for whatever reason. The reserves may have to be used. If something large breaks or is damaged then the reserves come to the rescue. The reserves may be used as a gap for damage even if the complex has been damaged by a storm. Condos have large insurance deductibles that often 6 figures.
When reserves are not enough to cover the expense of remodeling or repairing damage then each owner is asked to pay an assessment. The assessment is generally based on the size of the unit or its percent ownership. The assessment may be spread over a period of time or needed all at once. This will depend on how the owners vote to have it assessed.
You will want the condo you purchase to have ample reserves for when something happens or is needed to improve the condo building or common areas. Many condo association make each new owner contribute 2-3 months of condo dues into the condo reserve fund. This should be found in the condo docs or an amendment to the condo docs.
Recently I have been to two condo associations that are upgrading the building and the common area. One is Magazine Place Condo association at 760 Magazine where they assessed the owners for the upgrades. The building and all the windows had to be painted. The roof had to be repaired. You have to do such projects to hold and increase value. The complex looks so much better with a fresh coat of paint and newly painted windows.
The other association that I was in was 700 S. Peters in the New Orleans Warehouse District which recently painted the Atrium and improved the rooftop deck. Both these projects make the entire building worth more and will make new buyers want to be there. It’s basically an investment in the future and an increase in value of the project right now. People want a home or second home that looks and feels nice.
Buildings and Common areas just need to be updated over time and by having enough reserves makes it easier to upgrade. Many times you will get a combination of reserves and assessments when upgrades are made so as not to drain the reserves for a real emergency.
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The Federal Fibre Mills at 1107 S. Peters was a rope factory completed in 1903. It made all sorts of ropes for the transportation industry and manufacturers that used rope. It was renovated in the early 1980’s to become a center piece of the 1984 World Fair that was held in New Orleans. The mono-rail ran through the building and also hosted the German Beer Garden. It also housed workers for the Fair. It later became one of the first conversions for downtown living in the New Orleans for condos. Today it remains one of my favorite complexes.
The developer once again tried to give you that warehouse feel with exposed beams, exposed brick, high ceilings, lots of natural light and natural wood. The 140 units have the amenities of the Worlds Fair to enjoy. A great lobby, A great courtyard and pool, and some great views of the city. Few buildings in the 1900 time period were larger than 5 stories that were used in manufacturing.
The Condos that are now The Julia Place Condos at 333 Julia Street in the New Orleans Warehouse District was once a bag factory built in the 1880’s. They were apartments before being converted into condos in 2005. The are all a little different in floor plans. Garage and Lot parking for about 85% of the units on the first floor and adjacent lot.
The Bemis Bag company made cloth and burlap bags that were used in shipping raw materials. Coffee, Cotton, Corn, Rice, Wheat were all loaded on barges and ships in this time period. New Orleans was a large port city so the bag factory was necessary for shipping on the steamboats and rail that came to the City of New Orleans. They needed large windows for natural light and high ceilings for the large equipment that was used in making bags.
The Cotton Mill Condos at 920 Poeyfarre in the New Orleans Warehouse District are aptly named as this was a 1900 Cotton Mill. This building covers a city block. The large windows were for natural light so the worker could see better. It was near the Mississippi River so the raw materials were easy to transport down river from points North.
It now has 288 units in the condo complex. It was converted into apartments in the late 1990’s before being converted to condos in 2004. Today it is one of the larger complexes in New Orleans. People love the high ceiling’s of 18 ft, large windows, exposed beams and exposed brick. It is a true Warehouse feel.
This is an old home on Magazine Street near the Garden District that was converted into apartments and later into historic condos in 2007. It has 5 units. Most of these old homes are small complexes. The developer did what he could to make each unit feel like it could have been in the 1880’s with wood plank floors, high ceilings, large windows, brick walkways, porches and galleries that fit the period. Plenty of attention to detail. It has parking in the rear. I call these neighborhood condos as they seem to fit right in the neighborhood.
Another one of my favorites condo complexes in Uptown New Orleans is this old school-house that were turned into condos on Coliseum Street. How would you like to live in an old classroom. The wide halls let you know it was once a school-house. The units tend to be different from each other. The units have parking around the building. They have a modern feel with a touch of history as this was more than likely built in about 1920’s. Its in a neighborhood surrounded by single family homes and an easy walk to Prytania that was once a neighborhood shopping area as it is today.
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Three Big Positive Financial Factors of Owning a New Orleans Condo that Buyers Should Remember….It all Adds Up…
What will the NOLA Condo Market be like in 3 to 4 years ?
People who buy condos tend to move more often than home buyers for a variety of reasons. People out grow their condos, get better jobs, graduate from school and have to move to another location. Many will buy a condo because they know they will be here for a shorter time and buying a condo makes more sense. I am often asked what the market will be like in 3-4 years and will I make money if I buy now rather than rent. I can only tell them the present trends. I would only be guessing as to what the market will look like in the future. I can give buyers and sellers a view of the past and the present market trends for condos.
One thing I can tell them is that may not have factored into the purchase equation is the financial benefits of owning for several years. You may or may not have appreciation on the sales price but you will get two other large financial benefits. At the low rates that we currently have, the “plus” factors are even better. Lets use $200,00 as a loan amount to see how it works. Lets use a $250,000 sales price.
Paying down the Principal
Your monthly note is broken down into several large numbers once you take out taxes and the HO6 Insurance policy. Over a four-year period you will pay down the principal by $13,819.64 at a 4.5% rate. That is an average of $287.97 per month that you are decreasing the amount you owe. When you sell, you will get this back as equity that has built up over time.
You can get lower rates if you finance for 5 years or 7 years amortized over 30 years. You just have to pay off the mortgage in 5 or 7 years. The pay down of principal increases monthly. Going from 263.37 in month One to $314.03 in month 48.
The Mortgage Interest Deduction
The interest you pay over the 48 months is $34,819.12. This is the cost to borrow the money. As a home owner you get to deduct the interest you pay on your taxes. If you are in the 25% tax bracket your deduction is 25% of $34,819.12 or $8407.78. This how much you save on taxes over the 48 months. You save $8407.78. The out-of-pocket expense is thus lowered by an average of 181.35 per month over the 4 years.
The Appreciation Factor
This is what we do not know because we cannot see the future. Lets just say if the property appreciates by 5% over the 4 years. This is big money. This has done this in the past and could do it in the future. Last year alone you condo could have easily appreciated 10%. This figure is based on the sales price. Let say you paid $250,000. The 5% increase would put you at an increase of $12,500 over the 4 years. This number is not certain. Over the last 10 years we have seen 6 years of appreciation and 4 down or stable years. The down years were 2008-2009. The even years were 2010 and 2011.
Adding the Number Up
Paying down the principal and getting the Mortgage Interest deduction is a given and are known factors. If you get the 5% appreciation then it really adds up in your favor. That all adds up to……
$34,727.42 Versus ($72,000) in Rent
That adds up to almost a thousand dollars per month. You will have expenses as well but you can easily pay $1500 per month or $72,000 in rent over the 4 year period. You never see this again. This is an especially valuable set of number of you are a student, medical student or resident when you know how long your stay in New Orleans is going to be…..
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What is covered in Condo Fees ?…Most often asked Question that I hear when selling condos in New Orleans..
February 27th, 2014 categories: Condo Knowledge
The number one question that I am asked is what is covered in your condo Dues and how are they figured out….Let me answer those questions for the New Orleans Condo Market….
The condo fees differ by the condo association but there are the basic items that are the same for all condo associations. The casuality, fire, wind-hail and flood are almost always covered in the monthly fee. This is generally the largest share of the budget. The upkeep of the building and common areas are the next largest budget item as this is a shared expense by the owners. Once you get past these two main expenses you will begin to see differences. The common expenses are almost always based on the square footage of the individual unit. A 1000 sq. ft. condo will pay twice as much as a 500 sq. ft. condo in the same complex. The share % will be in the condo documents.
The HO6 Policy covers your possession and build outs with the walls…..
You are always responsible for things that break inside or get damaged within your condo. You use it and you keep it up as this is not common. You should always have a HO6 policy for you possessions and build outs within the condo. Often called “sheet rock in”. These are not expensive and lenders will require buyers to purchase these polices. Everyone should have one. The condo associations have high deductibles on their insurance policies and you may need to use these. My experience says this is a must have policy.
The most likely damages that I have seen come from water leaks from the roof, broken pipes, water intrusion of various kinds. The unit above you make have a toilet or tub overflow. All kinds of things can happen and you want to be protected. Most of the time these policies give you a fix within days and take care of you no matter what the fault is. These policies have lower deductibles that the large policies that cover the building and common elements.
The things that are common to all units share the common expenses. The sharing items in common areas can include lights, electricity,water, common area cleaning, trash, management, pools, gardens, termite contracts, gyms, elevators, security gates, parking areas and any common personnel on the payroll are covered in the fees. These fees will vary from condo association to condo association. A small condo association will generally be managed by the residents and have no personnel on staff.
The larger associations that want on site management, security, and full-time maintainance personnel will of course cost more but the share is split between many owners. Personnel on staff is one of the larger drivers in driving up the cost of managing a condo. It all depends on what the owners want and need.
What the owners want are covered in monthly condo fees is voted on by the owners and the majority wins. This can change over time as the owners may want new services or may want to delete some items that they no longer need.
The large condo associations generally have water, trash and sewerage cost in their fees. Many of the small associations that had individual water meters and gas meters before a conversion have each owner pay their own as the meters were already there. This will vary but the size of the complex will often dictate this.
Sometimes you will see the condo fee cover everyone’s electricity. This is not the norm and it really makes the fees go up quickly. This makes it expensive if you are using this for a second home and are not a full-time resident. This becomes a drawback when selling your condo as the fees get higher.
Condo Reserve Funds – Always needed
The Collection of Condo Reserves are a monthly expense. This is where the condo association collects a certain each month to hold in reserve for unexpected expenses. This is a buffer from rising cost and things that need to be replaced. This generally runs no more than 10% fo the monthly fee. Lenders want to see at least 10% of the annual budget in reserve. This can fund updates , major repairs and large deductibles in the insurance policies. Not having enough in reserve means when you come up short there will have to be an assessment on each owner to cover damages or replacements…
Many condo associations have new owners put several months of condo fees into the reserve fund. This is not pre-payment of fees but goes in the reserve fund like a rainy day fund. This will be in the condo docs or added as an amendment. The management company will know if this is the case in their association. This tends to happen in the larger complexes. Always ask how much the reserve fund has in it as this may be an indication of future liability.
Now For some Uncommon Shared Expenses
1107 S. Peters or The Federal Fibre Mills has a common chiller system that is the air conditioning for all the buildings. It is a very efficient system but does make the condo fees go up and your electric bill go way down. The expenses of a system is thus shared. In most associations the a/c is on you along with the upkeep of your equipment.
700 South Peters has 24 hour security and a valet parking person during peak hours of the day. 24 hour security does add up but that is what some association want.
3915 St. Charles Ave or St. Charles Gardens has a part-time manager who is on site at certain times during the week. The association hired the manager to manage the condo association but did not need one full-time.
920 Poeyfarre or the Cotton Mill Condos has a central boiler system for hot water that all the units feed off of. This is a shared expense and the owners do not have to keep up their individual water heaters. There are none.
It does seem like a lot to remember so do not be afraid to ask questions. I do this daily and still have to ask as policies do change. I always suggest the buyers ask for the current budget so they can review each line item to get an idea of all the expenses that they will be paying in their monthly fees.
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When most people begin their New Orleans search they have an fairly good idea of what they will like or dislike. For the second home buyer they will generally say give me the historic look first. Buyers looking for a condo as a primary residence may still want the same things but is willing at all options that are availaible.
Outside of the Warehouse District you will find the more historic condos to be smaller associations that were once grand home turned into appartments years ago. Then turned into condos in the last 10-12 years. They will have the high ceilings, wood floors and the historic feel. Most will not have amenties such as a pool and many will not have gated or covered parking. Its about 50/50 with parking. A Lot of these are what I call neighborhood condos as they are in neighborhoods.
Some few will be large units that are quite elegant like the one condo of 5 units that is on St. Charles Avenue. These are like living in a house and of course much more expensive depending upon the updates of the condo itself.
Another common conversion in Uptown is the old 1920’s apartment houses on St. Charles Ave. and nearby main streets. These will mainly be smaller one bedroom condo units over 3 floors at most. Many will have parking beneath or behind the building. They have a great feel but are not going to be large. A great size for weekend place or student who needs a place to live.
The larger 1970’s complex with amenties and services will be larger units that will have parking, gyms, pools, courtyards and such things. They will generally be managed by a local management company. Most will be very secure and in great areas right on the St. Charles Ave. Streetcar line. Most will not have that historic feel but other things to make up for the lack of that feel.
In the end its all about what you will like and enjoy. I have the knowledge of most of the condo associations so can guide you once I hae a good idea about what your criteria is. I am happy to give you the positive and negative of each….
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A New Year and a New Market in Real Estate. Since the concentration of this blog is about condos I will give you an overview of the market in Condos. The French Quarter, Warehouse District and Uptown are aall doing well. The market is Jefferson Parish is still not doing well. The rental market is very strong. The strong rental market is making people in Jefferson to take condos off the market and rent them. The Owners in Orleans can easily rent ot cover their cost and watch their values go up. This is one of the reasons I think there is little inventory on the market today.
The low interest rates have made for low notes. Tis will also make it harder to part with your condo to move to a higher note. The interest rates are trending up and the best this week was 4.5% for one of my clients. You can expect the rates to rise over the year. There are however more lenders locally competiting for your business for their own portfolios. You pay 1% for the money and make almost 5% wiith higher fees. No wonder they want your business.
The Second Home is still very strong with a lot of cash buyers and those willing to put down high percentages above the normal 20% downpayment. The one thing that is different this year is that many second home buyers expect to live here part of the year and make it a part time home. You see a lot of baby boomers in this category. New Is just a lot of fun and that is how they want to spend their time.
We are also seeing more second home buyers in the market that do not live that far away. Baton Rouge comes to my mine first. Its 70 miles up the road and makes it an easy weekend visit. They also tend to know more about New Orleans and where areas they want to be in. This is kind of a new trend but after selling 4-5 people from Baton Rouge lately I see the trend. You also have people from Kenner, Mandeville, and Slidell which are een closer places.
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