Are you buying a home? Consider a condo!
A condo can be a great way to get a first home, downsize without losing amenities, or build value for the future. However, there are a few details about condo living you might not realize.
What Are the Average Condo Fees? Because condos tend to share walls and landscaping, management needs a way to pay for community property. Condo fees meet that need, but they can be confusing for first-time buyers – partly because they go up and down.HOAs can levy assessments for improvements, such as repaving. These projects may have little impact on your quality of life, but you may be required to pay them.
What Do Condo Fees Pay For? Condo fees pay for "must-have" expenses like snow removal and lawn care. However, other features vary by development. Some condos offer free storage space, and others don't. Bear in mind luxury amenities like pools and tennis courts can lead to higher fees.
Are There Any HOA Red Flags? Several signs can indicate the homeowners association isn't all it's cracked up to be. First is a lack of reserve funds. Low reserve funds may mean fees increase in the near future – it only takes one fire, weather event, or other problem to trigger an assessment. Naturally, you should talk to residents (past and present!) to get the scoop. Be wary if there are complaints about poor maintenance or fund misuse. Also, ask if the development has changed owners or has pending litigation.
What Are the HOA's Rules? Everyone moving into a condo must agree to HOA rules sooner or later. They are spelled out in CC&Rs – "Covenants, Conditions, and Restrictions." This standard document will outline all the rights and responsibilities condo residents must follow. While most HOA rules are minor, some might cramp your style. You may not be able to paint your home any color you want or decorate outside in specific ways. Breaking these rules can result in fines and even eviction.
Are the Units Modern and Well-Maintained? It's crucial to go over every aspect of the condo with a fine-tooth comb. The units should be clean and tidy. Water heaters should be relatively new: They typically last 15 years. Be wary of older condos. Outdated materials and construction practices can cause big repair bills or even put you in danger. Lead paint and popcorn ceilings are risks, the latter because of asbestos. These hazards are most likely for condos built before 1982.
What is the Potential Resale Value? There's good news and bad news when it comes to resale value. First, the good news: Condos typically outperform detached homes when it comes to appreciation. The bad news: Most buyers aren't in the market for condos at any given time. Resale value is highest in developments where buyers outnumber renters. There should be few unsold units unless new units have only recently been completed. And, of course, HOA fees should line up with similar developments in the area.
When you're house hunting, if buying a single-family residence doesn't meet your needs, a condo can be just the thing. With these six questions in mind, you'll be equipped to make the best choice for you.