Stop! Before buying a condo, here are a few things you should consider prior to committing.
Things to consider before buying a condo
Date Published: May 28, 2019
You’re contemplating buying a condo but you’re not quite sure how to go about it. This is totally normal because buying property is one of the biggest decisions you’ll ever make in your entire life. That’s why you need to take your time with it and ensure that you’re making a responsible choice.
Below we have a helpful guide on the most important factors to consider before buying a condo. Read on for more.
What is a condo?
Condominiums or condos for short are private residential units within a building that has many units. It can be an attached unit in a building or a detached unit. Condos are typically owned by individuals or families, and they’re particularly popular among retirees.
What are the benefits of owning a condo?
The cost of owning a condo varies according to different factors like location, the size of the unit and the cost of living in the area where it’s situated. But, industry experts agree that condos are generally cheaper than single homes overall.
In addition to the unit that you own, you also co-own other spaces such as fitness facilities, a swimming pool, theater or entertainment room, barbecue areas, and other value-added services that you wouldn’t otherwise afford as a single homeowner.
At a time when safety is a major concern, condos offer state of the art security systems and usually with security guards available 24/7. There’s also the fact that you live in close proximity to other owners, meaning if anything were to happen, they’d be available to assist you. If you’re a frequent traveler, it does help to know that your property is safe when you’re not around.
As a condo owner, you’re only accountable for the interior maintenance of your unit. All exterior repairs and maintenance tasks are taken care of by the homeowner’s association (HOA) or Condo Management Company in charge of your condo building. This includes things like lawn mowing, repainting, replacement of broken windows, etc.
Sense of community
You don’t have to be a social butterfly to appreciate the sense of community that comes with living in a condo building.
What are the drawbacks of owning?
The above luxuries have to be paid for through HOA maintenance dues. These fees guarantee that all the planned, on-going repairs are carried out and that the common areas are well-maintained. The money also funds future projects and unforeseen emergencies.
At this stage you’re thinking; wait, more money? But this is all for the benefit of maintaining the condo building. Assessment fees are for emergencies that are not covered by the association dues. They are for unexpected property improvements like a plumbing situation or a breakdown in the HVAC system.
Rules and restrictions
Outside your unit, there are rules and restrictions that property managers have to enforce. You have to abide by these rules whether you agree with them or not. You’ll also have limitations on how much you personalize your interior. You might also need to ask for permission to do certain things like installing a burglar door, cable and ask for approval to host a certain number of friends for a barbecue or pool party, etc.
Much like an apartment, a condo has neighbors on each side of your walls, top, and bottom. Depending on how thick the walks are, chances you will hear your neighbors breathing (probably not) but you might hear their conversations or their kids making noise.
Important questions to ask before buying a condo
Now ask and research answers to the following questions:
Where to buy a condo?
Based on your lifestyle, you need to determine which area you would like to stay in. From there, find out what the neighborhood is like. Is it a quiet or a busy area? What are people from this area like? What’s the crime rate in this area?
What is the condition of the condo?
Now that you’ve determined the area, you’ll want to find out more about the condos that are available. Is the condo building or complex in a good state or does it look a little worse for wear?
How many units are owner-occupied?
It’s important to know how many units are already owned and how many are still for sale. This is an indication of issues with that certain complex. Good quality condo buildings are usually so in demand that they’ll sell out within months or a couple of years of breaking ground.
How much are the condo fees?
You wouldn’t want to end up paying beyond your means. Find out how much the condo costs and a break-down of what is included and not included in these costs. This includes finding out about insurance costs, tax fees, utility costs, parking costs, association fees, a general outlook of the assessment dues and delinquency rates. Learn about the reserve fund and whether it’s sufficient to handle the repairs and other expenses it’s intended for. Further investigate how many times the percentages increase each year, by how much and what factors contribute to this increase.
A few other factors
Here are a few other things consider before finalizing:
Storage space and parking
Find out if your condo offers personal storage space and the costs attached to this, or if you have to rent the space. Find out whether you have a parking spot allocated to you as part of the condo package and how much it’ll cost.
Property management company
It’s good to have some insight into how the property is managed. Is it managed by an HOA or a condo management company? Are they reputable? Find out about the type of complaints owners usually put forward and how these are handled by the management. Industry experts suggest that it’s a good idea to know if there are any past or pending lawsuits against management or even owner to owner.
Condo rules and restrictions
As mentioned above, adhering to rules and restrictions is part of condo living. But you have to know what the rules are first. Condo rules typically determine how many pets, if any, are allowed per owner. Or how many kids per family. What you’re allowed to do with your balcony. For people who are looking into buying a condo for investment purposes, you might want to find out the rules about rentals as well. In some condos subletting is forbidden. If they are allowed, find out what the procedure is and the number of people you’re permitted to rent out to.
Take into consideration that you’ll probably cause disruptions when you move into your new condo, so you might have to notify other owners. Make it a point to find out what is required from you on the day you move in. Do you have to book extra help? Do you have to book the elevator or the stairs? These factors might seem minuscule but they can mean the difference between a smooth or frustrating move.
The process leading to buying a condo is not that different to that of buying a single-family home. What is important is doing your research. Know what to look out for, what to ask and understand what you’re getting yourself into. Then, use this information to make an informed decision that you will be happy with at the end of it all.