5 Things You Must Know Before Buying a Condo |
Posted: August 8, 2019 |
If you’re seriously thinking of becoming a condo person (complete with fashionable socks and elevator-sized dog), then before you sign on the dotted line and throw your first of many parties, here are five things that you must know: 1.Dig deep into the condo fees.All condos have fees. But not all condo fees are created equal. You want to do your research and determine how fees are determined, what operating costs are included (and what are excluded), and if certain costs need to be covered in advance. And while you’re at it, check to see how much is in the condo’s reserve fund. If it’s not enough to cover upcoming expenses, then guess what? You and your neighbors will be hit with a “special assessment”. 2.Find out who’s running the show. Condos are run by boards. You want to find out who these people are, and if they have a successful track record of managing and maintaining the property. Don’t ignore red flags like pushback if you request information or documents, or if the building lacks good security and looks run down. Also, make sure you look into how much community insurance the board has obtained. Remember: you’re not just buying a home, you’re investing in a property. If the insurance isn’t adequate, then the few hundred dollars you might save a year in condo fees can be more than offset by emergency repairs or renovations. 3.Find out if there are many absentee owners. If there are a lot of absentee owners, then you might have trouble getting a mortgage or selling your unit in the future. What’s more, many condo boards limit the number of units that can be on the market at any one time. 4.Analyze the building’s location, and not just the unit itself. You may have fallen in love with a particular unit (great views, big balcony, etc.), but take a step back and look at the property as-a-whole. Is it in a desirable location that will attract future buyers? If not, then you could find it difficult to sell your unit in the future for fair market value. 5.Watch out for restrictions. You may be surprised — and not pleasantly — about what a condo board can restrict: everything from pet size, to whether you can put up “Merry Christmas!” banners on your balcony. Make sure that you read the agreement thoroughly. Many people who go from living in a house to a condo experience a culture shock because of what they suddenly can’t do. The Bottom Line Should you buy a condo? Maybe, or maybe not. You won’t get the answer from this (or any other) article. The only way to know if it makes sense for you is to do your research and be objective. That means making a decision with your head and not your heart, and ensuring that you don’t try and “keep up with the Joneses”.
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