First Time Buyer
Condominiums are a good way to get into the housing market if you
can't afford to buy a house or prefer this type of lifestyle. Condos
are also great if you don't want to spend a lot of time doing yard
work or maintenance. One important thing to remember about a condominium
is that you don't actually own the unit you live in nor the lot.
You own the air space inside the walls, ceiling and floor of the
With a townhouse you own the unit
along with the lot. Owning a condo, you are restricted from adding
a room, painting the exterior or changing the landscaping. When
you buy a condo you are also joining a homeowners' association which
is responsible for the maintenance of the units, insurance, garbage
and outdoors areas. The monthly HOA fees may seem high at first,
but owning a home will have similar costs over a same period of
What to Consider when Buying a Condominium
Ask owners in the complex what they like and dislike about both
the unit and the complex. How good is the sound proofing? End units
and upper units generally sell for more when sound comes into play.
How is its location in the complex. Next to an access street, parking
facility, pool? Look for units that are not adversely affected by
Stay away from predominantly rental condo complexes,
those having more occupants that are renters. They are often poorly
maintained as absentee owners usually vote against improvements
and increases in maintenance fees. Many lenders will not make loans
if the percentage of renters is high compared with owner-occupants.
Compare monthly association fees with other similar
condo complexes and what amenities are included. Find out if any
increases in fees or special assessments are planned. Is the condo
homeowners' association in good financial condition. Before making
a purchase offer, obtain the latest financial statement from the
homeowners' association. Are there any lawsuits between the homeowner
association and the builder? Who manages the complex and how well
are the common areas maintained. Check to see if there are any unusual
bylaws, rules or CC&Rs. A good complex generally is a result
of restrictions of pets and rentals. Read all papers carefully.
Buying in a New Complex
Find out how many units are sold and closed. Don't be one of the
first buyers. Its better to have 60% of the condos sold before you
close your purchase. If the units don't sell or the developer goes
bankrupt, you may end up owning much less.
Make sure a warranty is provided for one year on everything in the
unit. It is important to know exactly what your developer will warrant
when buying in a new complex.
How do Condos Compare to Single-Family Homes?
Based on appreciation, condominiums in some areas have been as profitable
an investment as single-family homes in the last five years. In
some markets, condos appreciated even more.
Problems with Condominium Associations, are
Condos a Bad Investment?
Despite problems in many associations,
condominiums have done a good job of holding their value. Real estate
experts say that the reason there are more stories about conflicts
in associations is the proliferation of homeowners' associations.
Condominium associations involved in lengthy and expensive litigation
may find that such disputes will hurt resales because some lenders
are reluctant to make home loans on units in their projects. However,
experts argue that many disputes today are resolved more readily
without initiating legal action. In addition, the condominium community
has worked hard in the last few years to overcome image problems
that were brought on by disputes and lawsuits among condo owners
and developers. Associations today are becoming more sophisticated
about property management and are taking steps to prevent legal
problems and disputes. Buying a condominium is still an excellent
way to start home ownership.
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