Advertisement

If you can't afford a house, why not buy a piece of one?

June 27, 2004|by BOB MAGINNIS

In 1991, a Baltimore landlord named Fred Rovecamp decided he didn't want to be in the rental business any more. But instead of selling his properties - 44 units in all - he decided to convert them to condominiums.

Not only that, he worked with his tenants to help them buy the properties, then set up a management company to take care of maintenance and other items renters might have been unfamiliar with.

It was all described well in a column written by The Baltimore Sun's Michael Olesker.

I paid close attention because in 1990, I had written a column about the issue of affordable housing, noting that the average price of a home in Washington County had jumped by $15,000 in year's time.

A similar round of increases is going on today. It's time to look again at the idea of converting some of the old apartment buildings in Hagerstown into condominiums.

Advertisement

The objection I heard to this in the early 1990s was that by the time you finished renovating an apartment building into units someone would buy, they would be so expensive no one could afford them.

But when almost every decent house in this area is listed for at least $100,000 - and many for more - a $50,000 condominium doesn't look so bad. And unlike a rental apartment, your money goes to build equity.

Right now there are several apartment buildings listed in the $100,000 to $160,000 range. If you bought the $160,000 building, then spent another $40,000 on upgrades, you'd be up to $200,000. Throw in another $20,000 for closing costs and miscellaneous and you'd have spent $220,000.

At 6 percent, your monthly mortgage payment, with a $32,000 down payment on a 30-year loan, would be $1,127. Divided four ways - for the four units - the monthly payment would be about $300.

Now let's say my calculations are way off and the individual payment would be more like $400. That's still less than many rental units are going for these days. And when the two young professionals who've bought one of those units decide in five years that they want a detached house and a yard, they'll have some equity to apply to it.

Now a good friend of mine who lives downtown said that a major deterrent to such sales would be the neighbors in the rental units. Other factors aside, renters just don't have the same stake that owners do in maintaining a building or keeping the neighborhood nice.

For that reason, I wouldn't start this venture in the center of downtown, but someplace on its fringe, like the historic district on South Prospect Street, with its picturesque architecture, big old trees and beautiful City Park just a short walk away.

As it happens, that's where I lived when I first got married and I remember well all the things I didn't have to do there, like mowing the lawn, cleaning out the rain gutters and worrying about whether a thunderstorm was going to blow the shingles off the roof.

Those jobs would be the responsibility of a condominium association, which would contract with a management company to take care of any unexpected problems - like the furnace that stops working in the middle of a cold December night.

City officials should take a look at this, for a couple of reasons. One is that, as one city officials told me last week, the fixer-uppers that the city government has been buying, renovating and reselling are becoming harder to get.

That's because buyers priced out of better properties are electing to buy those that need work and do it themselves.

The other reason is that, as recently noted in Money Magazine, Hagerstown is the kind of city that, with a little work, could draw some very creative people, folks who might want to spend more time listening to live music than to the whine of their power mower.

These are the people who downtown needs - people with money to spend. And perhaps with the new University System of Maryland campus nearby, some of the USM professors and professional staff might want to walk to work.

We left downtown 25 years ago, for a detached home with about two acres of land. When the children were small, it was a thrill for them to feed handfuls of grass to the cows grazing in the pasture behind our place. But now, all that ground is getting harder to maintain and cranking up the string trimmer is not as much fun as it used to be.

For us, or people like us, smaller might be better, particularly if we knew who our neighbors were. In the case of Fred Rovecamp, the former landlord whose story began this column, he envisioned having some older people making extra money by doing child-care for their younger neighbors.

Those same gray-haired folks might benefit from having younger neighbors who could carry something heavy, or give them a lift somewhere. The possibilities exist. They just need someone out there with the imagination to make them work.

Bob Maginnis is editorial page editor of The Herald-Mail newspapers.

The Herald-Mail Articles
|
|
|