If you are consider buying a condo, you likely know that condominium purchases are one of the hottest real estate transactions going during peak home buying season. This is because for both first time homebuyers as well as those who are looking to downsize their housing needs, condos still remains quite affordable. While at one time condos had somewhat of a bad reputation in the real estate industry, today they continue to appreciate in market value at a rate that is almost as fast as that of single-family residences.
In the past few years, most condo owners have found they remain quite satisfied with their purchase provided they took the time to make the right purchase. If you are thinking about buying a condo, it is important to make sure you know what to look for as well as what to avoid in order to find a condo that won’t make you regret your purchase later on.
For example, there are several things to look out when buying a condo and which can be reasonably avoided.
First, it is important to check into how the condo is managed. Quite simply, some condo complexes are badly managed. It is also important to do some research and make sure you are aware of the fees that are associated with maintenance of the condo. While fees may be common enough, you want to make sure they are no absurdly high in relation to the level of maintenance quality the complex receives.
It is also important to take the time to find out who occupies the other units of the complex you are considering. Unfortunately, there seems to be a trend in many complexes for units to be occupied mainly by renters rather than owner occupants. This can create a problem when the occupants have very little pride of ownership; making it almost unbearable for those who have paid good money for their own units.
When considering a condo purchase there are two main factors that you should first look into.
First it is important to ask yourself whether a condo is really the right choice for you. While most condo owners are quite happy with their choice, it is important to understand it isn’t the right choice for everyone. The primary attraction for most condo owners is the lack of maintenance responsibilities. Unlike home owners, condo owners do not need to concern themselves with exterior repairs due to the fact that these duties fall to the condo homeowner’s association.
It should also be understood exactly what you are buying when you buy a condo. Condos are frequently known as vertical subdivisions because each owner is technically buying the airspace that includes their ceiling, inner walls and their floor spaces. The actual structure including the exterior walls, elevators, foundation, roof and parking area as well as the exterior grounds are considered common areas. These areas are owned by the homeowner’s association and are also the maintenance responsibility of the association. The homeowner’s association is comprised of all the members.
Once you have decided that a condo really is the right choice for you, it is time to turn your attention to deciding whether it would be best to purchase a new condo or a resale condo. As with purchasing a new home versus a pre-owned home there are both advantages and disadvantages that should be taken into consideration. The primary factor related to buying an older condo is one of maintenance expenses. Naturally, these can be more expensive than with a brand new condo. Generally; however, the condo association will have the foresight to budget for such expenses and have reserves to handle these issues. If the condo association did not; however, there could be special assessments.
When buying a brand new condo you will be able to enjoy the latest amenities and features. That said; however, you may pay more for these luxuries up front. Also, while new condos should be in excellent condition it is also possible that you might run into construction defects. If that is the case you may have problems if the builder doesn’t take responsibility.
Taking the time to ask the right questions when you are in the process of shopping around for a condo can help you to avoid these types of problems.
- How much are the monthly condo fees? What is included in the fee? How does the fee compare with other condo complexes?
- How does the homeowner’s association handle their finances? Do they have adequate reserves to handle repairs? Do they often make special assessments? Tip: To be sure ask to see the by-laws, rules, latest financial reports and the conditions, covenants and restrictions of the association.
- How is the condo association managed? Tip: a professionally managed association should have a professional property manager unless it is a very small complex.
- How many renters reside in the complex in comparison to owners? Tip: Avoid complexes where there are more than 20% of residents comprised of renters.