A condominium can fit the lifestyle of many people today. They can offer a variety of amenities and conveniences that other options may not give you. If you have been considering buying a condominium here are a few things you should know before making the investment.
- use a Realtor
- get a comparative market analysis
- inquire about the HOA and HOA fees
- read the bylaws
- be aware of the amenities
- buy a condo as an investment
- skip the home inspection
- take anything for granted
- be mislead
- sweat the insurance
Although some of today’s real estate firms charge a small commission fee to the buyer, the value that they bring to the process and transaction is priceless. A Realtor can not only help you find the right condo per your specifications, but can provide insights on financing, help to negotiate with the seller, and make your buying process much smoother.
Much like an appraisal, this analysis is an estimate of the value of a property based on the sales of properties with similar characteristics. Your Realtor will be happy to perform this service to help you protect your investment.
HOA stands for Home Owner’s Association – many HOA’s are run by the condominium owners themselves, while others employ management companies. Check the financial stability of any HOA you may be buying into, and what fees you will be responsible for on a monthly and annual basis.
Every condominium complex has covenants and bylaws that govern permitted use of the units and surrounding common areas. For instance, some complexes will only allow pets under a certain size and weight, or may not allow you to rent your unit in the event that you move and do not wish to sell.
Some complexes have a clubhouse, pools, tennis courts, and walking trails, while others do not. Don’t assume amenities that may or may not be there. Ask your Realtor to provide you with as much information as possible, before you decide which condo is right for you.
You should not buy a condo just to be an investment, unless you are buying in a resort area and it will be easy to rent. Even in a good market, condominiums do not typically appreciate at a high rate, making them less attractive as a real estate investment.
Even though the roof, foundation, and other exterior items may not be your responsibility, it is still a good idea to inspect the unit that you’re buying. It’s always a good idea to have a professional assure you of the condition of your investment.
While most exterior maintenance of a complex is taken care of by the Homeowner’s Association, some things like decks for example, are often the responsibility of the condo owner. Find out what things are your responsibility and what things are theirs.
The HOA at some complexes offer low monthly association dues, making it attractive to buy there. This could be a sign of poor management. While low HOA fees seem great and all is well for the time being, there is a reason why the fees are lower than other comparable condos and something could be missing in their funds, like future repairs not being accounted for in a reserve.
One of the advantages of owning a condo is your homeowner’s insurance is less expensive because you only have to insure the inside of your unit and your personal contents. The exterior building’s insurance coverage is typically covered by the HOA, making your own homeowner’s insurance a lot cheaper.
Owning a condominium is not for everyone, but it does fit the lifestyle of many people today. Whether you’re considering a condo or a home, you need to be sure that you know what it is that you are getting into. Keep in mind this advice, and happy hunting!