The condo lifestyle
Is a condominium right for you? What to consider before buying
Buying a condo can be a great way to dive into homeownership without worrying about much of the upkeep that comes with single-family homes and townhouses. Condo dwellers can also typically take advantage of shared amenities, plus having professional management to take care of building maintenance.
However, condos aren’t for everyone, so it’s best to figure out what your lifestyle and budget needs are first.
Short for condominium, a condo is a single unit within a multiple-unit property. Your individual unit is privately owned, whereas other areas are shared — amenities which may include a park, pool, playground, gym and a dog area.
David Lee, team leader and Realtor of David Lee Group with Keller Williams Realty in Orange County, California, says that shared areas of condos are usually managed by a condo association.
“A condo owner has the title to their individual unit but shares ownership of the common areas,” says Lee. “Being a part of an association, condo owners typically pay an established monthly fee to cover their budget and expenses set by the association.”
Condo associations can differ based on the requirements of the individual property. Some may impose additional fees to cover shared expenses such as unexpected building repairs or even adding new amenities that are approved by the condo board.
Here’s a condo buying checklist to go over as you start your search.
Consider your lifestyle.
Hate to mow the lawn and trim the hedges? What about pressure washing your driveway? Are your finances such that having to lay out $5,000 or more for a new HVAC unit or roof will be a burden? If you answered yes to these questions, condo living may be for you.
However, if the desire to have a large backyard outweighs the time you’ll need to spend maintaining it, then another type of property like a townhouse could be for you. Or if sharing walls with a neighbor (as well as ceilings and floors) might shatter your peace, a condo may not be the answer. Condos tend to work best for those who have no problem with apartment living.
Work with a Realtor with experience in selling condos.
If you’ve decided that condo living is for you, it’s time to search for an agent who’ll have your best interests at heart. Ideally, you’ll want someone who has had a track record of selling condos so that you can trust that this person will help you address any concerns you may have, such as reviewing the condo association documents.
The agent will know the condo developments in your area and what issues, if any, they have including such things as finances, structure or infrastructure problems. They should be able to tell you if there’s been acrimony over community issues and they will know which developments have fared best in resale values.
Decide what types of amenities you want.
Properties can offer a wide variety of amenities — some you may use, some not so much. When chatting with your Realtor, make sure to address the types of amenities you want in addition to other factors like location and budget so you can find the perfect place.
Keep in mind too that amenities you don’t plan to use — a pool for example — may still be worth having because when you go to resell, a condo that lacks the amenities of others in the area will be at a decided disadvantage.
Make sure to find an FHA-approved condo.
Mortgages for condos may not be as simple as for other types of properties. That’s because in addition to the usual underwriting criteria such as your assets, credit and income, the condo building itself will come under scrutiny.
The FHA has a list of approved condo projects on their website. Conventional lenders may have similar requirements to that of the FHA, so seek the assistance of an experienced mortgage professional.
Research the property management company.
Understand who’ll be in charge of doing the upkeep is crucial since you want the property you purchase to be well-maintained. It can be frustrating to pay association dues only to have the amenities fall into poor condition, potentially affecting resale values or pushing dues higher.
When touring properties, ask who is in charge of maintaining the day-to-day operations. You can direct questions such as who handles resident requests and community rules to the property management company itself. Consider doing your own research on the company’s reputation.
Review association fees and regulations.
Apart from your mortgage, you’ll need to pay association fees for the upkeep of the property and its amenities. Review those fees and ask what’s included — examples include snow removal, lawn care and cleaning common areas.
In addition, ask about regulations that you’d need to abide as a resident. Are there any noise restrictions? Or rules about booking common areas in advance? Understanding these regulations ahead of time will help you figure out whether you’ll want to abide by them.
Ask about special assessments.
Special assessments are funds that the condo association requires to tackle a significant project — it’s typically voted on by its members (that’s you). It may not be common, but this is something you need to be aware of because you could end up paying more in association fees to cover this cost.
When looking at properties, ask about any planned special assessments or how one might work if there isn’t one in effect. That way, you can be prepared and not get caught off guard.
A well-run association will avoid special assessments, except in extraordinary cases. After all, it should come as no surprise when streets need to be repaved after decades of use or the 25-year-old clubhouse roof needs to be reshingled. Ask for copies of the association’s financial reports and make sure your lawyer or accountant reviews them to avoid getting stuck with a big bill for wear and tear created before you arrived.