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Comment by rootusrootus | Hacker News Reader

> Especially people buying condos; a big part of the point is that a lot of the hassles are taken care of for you.

I sometimes wonder about that. For what it costs in ongoing condo fees, you could pay someone to provide exactly the same level of worry-free maintenance on a regular house.

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The part that's worrying is the catastrophic cases. I had complex roof leak and while I had to yell and scream and threaten legal action, eventually the management company fixed it; my friend who had a similar problem in his house ended up wiping out his savings replacing the roof.

Well, that probably wasn't necessary. That's basically what home equity loans were supposed to be for, back before people started treating their houses as ATMs.

I used mine as a way to deposit, and I'm pretty sure I'm not the only one. Banks have been pushing hard for people to mortgage against the property gain. It is easy to blame 'people' but banks were absolutely in on this and a major driver.

He had the savings available (he'd been planning on retiring the next year), so I don't think getting a loan and keeping the savings would have made him any better off.

I believe the idea is, if you secure the loan against your house, and your house is beyond repair, you can default on the loan, surrender your house, and still have your savings.

Though I'm skeptical of the terms you'd get on a loan secured by a badly damaged home.

Well you're out the value of your house in that case, so I don't think that leaves you any better off. A loan might let you smooth out a sudden big expense, but it's not going to make it go away.

If a five-figure roof replacement wiped out his savings, how was he planning to pay for things in retirement?

Sell the house? I think that's a pretty common 'strategy', at this point.

And live..where?

Plus, if you sell the house with a bad roof, a smart buyer would insist on paying market value minus cost of roof replacement. If you replace roof, you’ll get market value. Either way, you’re going to lose the roof replacement cost.

I don't know all the details of his finances, but he'd worked in government all his life and had a pretty good pension. He also moved out of the city to a lower cost of living area, although I don't know whether that was in his original plan or not.

Ah, some government pensions are pretty generous, that makes sense.

I can see that happening, but only when people don't save for such an eventuality. I was talking with a friend of mine a couple weeks ago and found out that his monthly condo fee is $1000. He spends $12K a year investing in the maintenance of the building. If a homeowner saves that same $1000/month into a maintenance account, they can put a very nice roof on their house every couple years. But roofs usually last 20+ years.

I certainly wouldn't pay $1k/month, lol. I'm sure there are bad deals out there, but the fundamental idea still seems sound, similar to insurance - pay a bit more on average in exchange for getting rid of the tail risk. If you rely on your own maintenance fund, you have to cover the whole of the worst case on your own; pooling that risk should make it cheaper.

condo fees also cover walls out insurance, many utilities, neighborhood upkeep, etc. given you're already paying these yourself in SFH, it's not quite apples to apples to say full HOA fees would be ON TOP of all of that.

i'd subtract whatever your water/trash/sewage bills are from "typical" HOA rates in your area, and subtract typical difference in home vs HO6 insurance rates, then get to net to compare.

You could. At the same time, a new construction townhouse (and maybe even SFH) there is extremely limited maintenance work needed.

Plus, you don't need to be concerned with a HOA saying you can't rent your place out on whatever platform you choose.

Single family home and townhome HOA can, and often do restrict rentals. And short term rentals are restricted city wide

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