Friends of Laska,
In my last post we saw that living in an average downtown Minneapolis condo costs about $870 more than living in an average house in south Minneapolis. However, if you look at some of the direct benefits of living in a downtown condo you'll find that this figure may be closer to $500. Let's take a look.
Transportation. The average family owns 2.28 cars. Living in the denser downtown neighborhood, numerous transportation options (commuter rail, light-rail, bus, bike and walking) make it easier to drop down to 1 car. There are many things you used to drive to that are now only blocks away, including restaurants, bars, convenient stores, banks, grocery stores, theaters, stadiums and more. We did it and couldn't be happier. And, as you can imagine, this means less money spent on transportation costs.
According to the Bureau of Labor and Statistics Consumer Expenditures in 2009 the average transportation expenditure was $7,658 or about $638 per month. This figure includes purchase costs, gas and oil, insurance and other associated costs. Over the past year I have added up all costs for our one car and came up with a cost of $438 per month, a savings of $200 per month. There is a VERY conservative estimate as some put the cost of owning one car alone at over $6,000 per year.
Lawn care and snow removal. Living in a condo, we pay for all mowing, landscaping, raking, weeding, pruning, trimming, shoveling, salting, etc. in our association dues. If you were to pay for these services at your home, you could easily be looking at a bill of $100 per month if you averaged the costs over a year.
Security. At our building, our associations dues pay for 24 hour security with a guard on duty around the clock. A comparable service from ADT would cost about $36 per month.
Other facility advantages include a shared grill, fireplace, picnic tables, game room and social room with additional kitchen. We also have a cleaning service which vacuums and washes our hallway carpets, cleans common bathrooms and maintains other common areas. I don't think I'd be a stretch to say these benefits about to $30 per month or more.
If we take these benefits into account, our $870 difference is now about $500, which is still a sizable sum. So why would we still live downtown then if we are are paying $500 more per month or $6,000 more per year?
Stay tuned for Downtown Condo Costs - Three....
Monday, September 5, 2011
Sunday, August 28, 2011
Downtown Condo Costs
Friends of Laska,
When my wife and I were deciding whether to live in her downtown condo or at my house in south Minneapolis we knew it would cost more to live downtown. We just didn't know how much more so we first looked at our direct housing related costs. I've attached a spreadsheet showing the exact comparison we used except the PITI (Principal, Interest, Taxes and Insurance) represents an "average" home or condo. (The median condo price in downtown Minneapolis (zip code 55401) is roughly $275,000 and the median home price in south Minneapolis (zip code 55406) is roughly $140,000. If we assume a Fix30 mortgage at 4.75% interest and a $20,000 down payment with about $5,000 in closing costs, the PITI for a condo in downtown Minneapolis would be about $1,880 per month and a house in south Minneapolis would be about $980 per month.)
From this spreadsheet you can see that it costs about $870 more per month to live in a downtown condo than in a south Minneapolis home. You cannot deny that this is a VERY substantial difference. Had we opted to stay in our south Minneapolis home we arguably could have saved over $10,400 per year towards our dream house or our child's education.
However, as you will find out in my next blog, there are very good arguments for paying more to live in downtown Minneapolis and even whether the difference truly is $870 per month.
Sunday, August 21, 2011
A brief history
Friends of Laska,
Back in January of 2006, at the peak of the US housing bubble, I purchased a quaint little bungalow in south Minneapolis. It had "good bones" but needed some attention as the previous owners had not made any substantial updates since the 1960s. But I had time on my side and was eager to roll up my sleeves and do the necessary work.
A few months later my wife, merely an acquaintance at the time, purchased her condo in downtown Minneapolis. Thinking there was a good possibility she might not meet "the one" and not interested in maintaining a house on her own, she began looking at condos in the downtown area just blocks away from her job at the University of Minnesota.
Sparks flew, and we began dating a late 2006. In 2007 it soon became apparent that we would have to figure out our living situation and, being partial to our own residences, we debated the merits of a house in south Minneapolis vs a condo in downtown knowing that we were going to start a family soon.
There were many advantages to living in my house and I had grown personally attached to it. Living expenses, including the mortgage, were about half of that cost of the downtown condo. My house had more living space, a backyard, a garden and a two car garage. I had spent time and money on a new bathroom, roof, hardwood floors, landscaping, a sewer line and other cosmetic items.
There were also many advantages of living in my wife's condo which made life easier. We were close enough to her office that she could walk daily and it had underground heated parking along with a pool and workout facility. We were within walking distance of a Target store, Lunds (a grocery store) and numerous bars and restaurants. It was adjacent to the Mississippi parks and trails system and, most of all, we didn't need to worry about shoveling snow, mowing the lawn or taking care of any maintenance.
Our decision was difficult and we couldn't decide. Instead, in the spring of 2008, we put both up for sale thinking we would move into whatever place did not sell. Well...as you might have guessed it...neither sold. Due to limitations in rental units allowed under her condo association we were not able to rent her condo at the time so I officially moved into her condo and converted my house to a rental to cover the mortgage costs.
Then...something happened.
Living in a condo in downtown Minneapolis grew on me. I REALLY liked that I did not have to shovel snow. Or mow the lawn. And I grew fond of the fact that we only had one parking spot and were forced down to one car. And, despite the fact that we have less space, I appreciated that it forced us to make difficult decisions when buying things that we did not necessarily need. (But I digress...you'll hear more about why I like condo living later.)
And then something else happened. In early 2011 we found out we were expecting our first child. The baby is due in September of 2011, and we couldn't be happier. But as our pregnancy progressed I began to think...why aren't more families raising children in downtown Minneapolis? All the things I like about downtown Minneapolis cannot be unique to me. And all the benefits of living in downtown certainly seem to extend to families as well as couples and young single people.
And so I launched this blog to talk about raising a family in downtown Minneapolis, meant to explore all facets of family living in a dense urban-style environment in this Midwestern town. For all of you out there reading, I welcome your thoughts and input as I begin my blogging adventure.
Thanks for reading.
-Eric
Back in January of 2006, at the peak of the US housing bubble, I purchased a quaint little bungalow in south Minneapolis. It had "good bones" but needed some attention as the previous owners had not made any substantial updates since the 1960s. But I had time on my side and was eager to roll up my sleeves and do the necessary work.
A few months later my wife, merely an acquaintance at the time, purchased her condo in downtown Minneapolis. Thinking there was a good possibility she might not meet "the one" and not interested in maintaining a house on her own, she began looking at condos in the downtown area just blocks away from her job at the University of Minnesota.
Sparks flew, and we began dating a late 2006. In 2007 it soon became apparent that we would have to figure out our living situation and, being partial to our own residences, we debated the merits of a house in south Minneapolis vs a condo in downtown knowing that we were going to start a family soon.
There were many advantages to living in my house and I had grown personally attached to it. Living expenses, including the mortgage, were about half of that cost of the downtown condo. My house had more living space, a backyard, a garden and a two car garage. I had spent time and money on a new bathroom, roof, hardwood floors, landscaping, a sewer line and other cosmetic items.
There were also many advantages of living in my wife's condo which made life easier. We were close enough to her office that she could walk daily and it had underground heated parking along with a pool and workout facility. We were within walking distance of a Target store, Lunds (a grocery store) and numerous bars and restaurants. It was adjacent to the Mississippi parks and trails system and, most of all, we didn't need to worry about shoveling snow, mowing the lawn or taking care of any maintenance.
Our decision was difficult and we couldn't decide. Instead, in the spring of 2008, we put both up for sale thinking we would move into whatever place did not sell. Well...as you might have guessed it...neither sold. Due to limitations in rental units allowed under her condo association we were not able to rent her condo at the time so I officially moved into her condo and converted my house to a rental to cover the mortgage costs.
Then...something happened.
Living in a condo in downtown Minneapolis grew on me. I REALLY liked that I did not have to shovel snow. Or mow the lawn. And I grew fond of the fact that we only had one parking spot and were forced down to one car. And, despite the fact that we have less space, I appreciated that it forced us to make difficult decisions when buying things that we did not necessarily need. (But I digress...you'll hear more about why I like condo living later.)
And then something else happened. In early 2011 we found out we were expecting our first child. The baby is due in September of 2011, and we couldn't be happier. But as our pregnancy progressed I began to think...why aren't more families raising children in downtown Minneapolis? All the things I like about downtown Minneapolis cannot be unique to me. And all the benefits of living in downtown certainly seem to extend to families as well as couples and young single people.
And so I launched this blog to talk about raising a family in downtown Minneapolis, meant to explore all facets of family living in a dense urban-style environment in this Midwestern town. For all of you out there reading, I welcome your thoughts and input as I begin my blogging adventure.
Thanks for reading.
-Eric
Saturday, August 20, 2011
In the beginning...
Friends of Laska-
My wife and I are expecting our first child in about a month and like most first-time parents we couldn't be more excited. We've purchased all the standard baby equipment, taken the new parent classes and sought the advice of "experienced" parents like all new parents before us. However, contrary to the Midwestern norm, we've diverged in one aspect; we've committed to raising our child in the neighborhood and community we love - downtown Minneapolis.
We've hunkered down in our condo with one car, two bedrooms and three bikes. Join us as I blog our exploits of raising a family in downtown Minneapolis, flavored with opinions on dense urban-style family living, downtown development and family events in the downtown area.
Stay tuned....
My wife and I are expecting our first child in about a month and like most first-time parents we couldn't be more excited. We've purchased all the standard baby equipment, taken the new parent classes and sought the advice of "experienced" parents like all new parents before us. However, contrary to the Midwestern norm, we've diverged in one aspect; we've committed to raising our child in the neighborhood and community we love - downtown Minneapolis.
We've hunkered down in our condo with one car, two bedrooms and three bikes. Join us as I blog our exploits of raising a family in downtown Minneapolis, flavored with opinions on dense urban-style family living, downtown development and family events in the downtown area.
Stay tuned....
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