I agree with lhamo. The skyrocketing cost of insurance, due to CA's penchant for disaster, and the age of the complex will always put upward pressure on the HOA fee.
If you add just the amount of the HOA fee to the rent you're paying now, you're in the range of what a shared rental will cost in the new location. Paying $1k/month means you're out $12k per year for housing. It's guaranteed that the condo is apt to cost you well beyond that, especially with the possibility of Special Assessments.
Condos are cheaper because they're less desirable. They will appreciate less than SFH's because of this. If you really want an eye opening exercise, use the Sales History function in Zillow or Redfin to track how similar units have performed over time. The Santa Clarita area got hit hard very during the Great Recession, especially the condos.
Never buy a condo unless you're willing to be on the HOA Board. Having an insider's view is essential to protecting your investment.
I owned, lived in, and served on the Board of two condos in NorCal. Our three SoCal SFH rentals are part of the same expensive, uber-controlling HOA, so I have some experience on this topic. In your case, in the current situation, with your income, I would give this a hard pass. Rent for at least another year.
Yes I was planning to be active in the HOA board as much as I can at least going to any public meetings and being involved. The problem with any "better" than a condo is the price and really at this point I need dual income to really make that income which is not expected to be soon. I have looked at the previous sales history of this location and units within the past year have sold as low as $275,000 but substantially less remodeled. Even so I'm aware the price has substantially increased. I'm going to see what is out there but keep an eye towards the value I'm getting.
@Dicey I'm curious given my situation would there have been any point in the last 10 years or so would you think a purchase of a condo would have been the right situation for me or do you think that market conditions just don't justify it this entire time?
There's a saying that you make money when you buy and when you sell. Buffet says something about being bold when others are afraid (wild-ass paraphrase there). I have bought and sold many properties. The standout performerss are the ones I/we bought in down markets.
This summary is bit of a guesstimate because I don't have time to look up the exact numbers.
First condo, paid $120k on a short sale in 1996. Seller was being transferred during a weak market. Sold it 4.5 years later for $255k. This one was small (2+1) and old, but killer location, location, location.
Next, a townhouse. Paid full market price of $390k in 2001. Put it on the market in 2011 for $529, got $600k, because the market was just starting to heat up, post recession. I also put more money into fixing that one, so more work, more time, and comparatively less return on my investment. A SFH in the same time frame would have more than doubled, but it suited my needs well. It was quite large (4+2.5) and in a prime spot in the development (end unit on a huge greenbelt).
Rental #1 - New build. Paid market price ($301k) in 2003 and it's barely kept up with inflation.
Rental #2 Resale in the same community. Bought in 2015 for $259k in a down market in the same area and it need work. It smelled of sewage and the bathroom linoleum was lifted and peeling around the toilet. No one wanted it, but we figured it was only a failed wax seal, and we were going to replace the flooring anyway. It has appreciated quite nicely. It's now our best cash flowing property.
Rental #3, also bought in 2015, was insanely overdecorated by very proud owners (there were 50 cuckoo clocks in the Great Room, and that's just the beginning of the list), who overpriced it in a falling market. It sat on the market for a year. It's the biggest and fanciest of the three. Paid $335k, which was $100k less than their original asking price.
These properties are in a 5,000 home community. Our goal then was to own five properties in the development. We've been looking ever since, and have plenty of cash reserves to do so, but we haven't found anything that makes sense, so we're
impatiently waiting. And constantly scanning the market, of course.
Our current home was purchased on a short sale in 2012. The market was just starting to heat up. We had to outbid a dozen other buyers. Paid $928k. Now worth at least $1.6M.
Lessons: Buy in a down market.
Buy cosmetically ugly properties and fix them ourself.
Buy what buyers want, so when it's time to sell, there's plenty of interest.
In short, timing is everything.
Hope this helps. It is not a complete list, just the most relevant properties.
