Thinking of buying this storage condo - Thoughts/Experience from the braintrust?

[Nickshu]

I have an offer in on this storage condo. I have been looking for about a year and these things don't come up very often in my area as there are not many around. I plan to store cars there, as well as some stuff for my business. Mostly cars. I would rent out space for 2 cars to my Dad.

Details:
1080 sq feet w/ 25+ ft ceilings
110/220v power outlets
Gas forced air heat
No water, but you can have it stubbed in w/ no tap fee.
Plastic floor tiles and furnace included in the sale
Constructed in 2006.
The area/grounds and buildings are in excellent shape. It's located in a commercial/industrial area and I've been there during the day, there's a fair amount of traffic in/out for security.
Drainage is good (away from the door).

They have countered my offer at $82,400 (Asking was $83,900) and will have the furnace fully serviced prior to closing. Price seems to be good w/ comps in the area. It's a bit smaller than I had originally planned, but the price is much lower than 2-3000 sq foot spaces I have seen and there's no yard to take care of as in a stand-alone building.

The surprise that is not in the listing is there turns out to be a land lease monthly fee. I'm on the hook for a total of $232 per month for Land lease ($158/mo) and CAM/HOA ($74/mo) fees. Agent says it's a 98 year lease w/ an option at 49 years to buyout (meaning either the stall owners HOA buys out the land, or the land owner buys out all the stalls), but that's a long time from now as the lease started in 2006.

Any concerns, experiences, or things I should look out for?

[fanaudical]

Interesting - I've never heard of a storage condo with an associated monthly land lease fee. ~$232/month on top of the purchase price sounds a little steep to me for this space. I would think you could build a comparable single-bay pole-building for about half the purchase price if you had the land to put it on.

[stomachmonkey]

What's fire suppression like?

Is it facility wide?

I've seen a couple of places like this and they generally had strict rules on how much work you can do on vehicles.

Regular maintenance type of stuff was tolerated but stuff like pulling a motor was not allowed.

[mreid]

For reference, I rented a 1,500 sf space with all of the above plus an office and full bathroom for $1300/month in CT in 2008. Your all in cost seems high, plus you are on the hook for any future maintenance and bad neighbors. Wouldn't a lease be a better idea?

Here's a pic:

[Seabear]

Nick
6 years ago I bought a 1200 sq ft garage at a 64 unit condominim garage development near my house, best move I could have made to store cars and my boat. The facility is gated and has cameras covering most everything, each unit has multiple fire sprinklers, plus there are 2 restrooms and a clubhouse on site. We pay appx $95/mo for HOA, up from the $55 in 2010 but we voted to cover roof replacement costs ahead of when we will need to do that.
I heat the unit with a warehouse heater, not gas, keeping it at 55-60F during the winter. Everything is secure, dry, and easily accessed to work on. I see in your foto there's a mezzanine, that's a bonus. All the mezzanines in our complex have been vetted by the local FD and meet code. I added more lighting (old eyes), and a 2-post Mohawk lift.
I dithered for about 3 months before buying the unit, but have been really happy with it since.
RV, Boat & Classic Car Storage Real Estate Ownership near Seattle, Federal Way, Bellevue, Tacoma

[Nickshu]

Thanks guys. The building is in the county (looser codes) and does not have a fire suppression system. There is a water service available and I could probably add one but that would be $$$.

Otherwise this place is a bargain compared to the alternatives noted above. I have looked into building a Morton building (nicer version of a pole barn) on a purchased lot and I really can't do it for less than $250-300k with the lot prices in our area unless I go 50+ miles east which I don't want to do. Plus that would require grounds maintenance as well and to break even I'd have to build big for rental space.

In our area the city and county is less and less commercial friendly so I don't see much more like this being built making this a good investment.

At least that's what is going through my head.


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[Por_sha911]

Insurance costs? May be higher if there is no fire suppression?

[Seahawk]

I have to ask: Any room for adding on at your house, either seperate structure or garage add-on?

If not, I see the appeal of this place big time.

Do you pay for power?

[Nickshu]

Originally Posted by Por_sha911

Insurance costs? May be higher if there is no fire suppression?

Yes this is a concern, I'll be looking into this next week.

Originally Posted by Seahawk

I have to ask: Any room for adding on at your house, either seperate structure or garage add-on?

If not, I see the appeal of this place big time.

Do you pay for power?

I have a heated 4 car garage on my house one of which has 12 foot ceilings and is used as a car workshop, so one bay's worth is taken up by tools/equipment, the other by my lift and whatever car I am working on. My problem is I want a place to store my "fun" cars so I can still park my daily drivers in the garage. Especially in the winter. Plus I want to buy more "fun" cars but am out of space to store them!! Might even get a Porsche again!

[MRM]

That seems very expensive for what you get. And you don't have any control over future increases in monthly association fees. You could buy a second house with a garage for that kind of money.

[Arizona_928]

Originally Posted by fanaudical

I would think you could build a comparable single-bay pole-building for about half the purchase price if you had the land to put it on.

No kidding. Especially w/o water.

[Nickshu]

Originally Posted by MRM

That seems very expensive for what you get. And you don't have any control over future increases in monthly association fees. You could buy a second house with a garage for that kind of money.

Not where I live. Real estate prices are probably much higher here than in MN. I agree the cost is a bit high, driven by high demand for these types of placed here and very few around.

[Nickshu]

Originally Posted by AZ_porschekid

No kidding. Especially w/o water.

If you had the land. 0.5-0.6 acre lots are around $200K within a 5 mile radius of my house. Add building costs, county fees, water/sewer tap, and you're over $300-400K easy. I've looked into it.

[MRM]

Minneapolis housing prices are on par with Chicago. We're in the highest 20 markets in the country for expense. You know your market better than me, but that seems like a lot of money for a ground lease that has substantial monthly association fees. I personally wouldn't touch a ground lease under any circumstances. Too much that can go wrong. Ground leases are for developing land in Manhattan, not Colorado.

[Charles Freeborn]

Do you need it? And more importantly do you need the stuff you'd put in it?

[dad911]

What are all-in expenses? (prop tax, insurance, elec, heat(gas?)? I would minimally want internet access so I could put in a security system/motion sensor webcams.

I'd also want plumbing/bath internet for my 'man cave'

Carefully read & review association docs & restrictions, and local zoning restrictions.

[Arizona_928]

Originally Posted by Nickshu

If you had the land. 0.5-0.6 acre lots are around $200K within a 5 mile radius of my house. Add building costs, county fees, water/sewer tap, and you're over $300-400K easy. I've looked into it.

IMHO I don't see it as good deal with the land lease, HOA, and no water. HOA might be a stickler on active restorations/late night jam sessions/music. At the end of the day it's only money, and if you can live with the terms.

I didn't realize how small that space was with two 914's next to each other!

[WPOZZZ]

How large is the property your house is on? Can you build an extension to your garage, or a stand alone building? Go smaller, but it is all yours and just steps from your home.

[Nickshu]

Originally Posted by WPOZZZ

How large is the property your house is on? Can you build an extension to your garage, or a stand alone building? Go smaller, but it is all yours and just steps from your home.

My house is on a 0.7 acre lot, I do have space but I'm in a "nice" neighborhood w/ an HOA that does not allow outbuildings. I have a storage shed 6'x10' which is the largest the HOA will allow. I also have very nice landscaping that I've spent a lot on and I don't want to ruin the esthetic w/ a polebarn.

The place I am looking for is not planned to be used for working on cars, just storage.

Thanks guys, the land lease is the achilles heel here, otherwise the place would work great for my needs.

Gonna have to give it some more thought.

[javadog]

Add a second garage onto your house? That's what I did. From the street, you can't tell that I have two garages.

I used to rent a 4,000 Sq. Ft. warehouse to store my cars (and other crap) that I couldn't keep at home. It's also where I spent most Saturdays, tinkering on cars. It was about a 10-15 minute drive from the house, one way. That got really old, after about 15 years. Since I had the two garages at the house that could hold up to 7 cars, if needed, I decided to downsize my collection to what I could keep at home. Then I downsized it again, to how many garage doors I had (one garage is two stalls deep). Now I'm down to one P-car and a daily driver for me.

Think carefully about what you want.

JR