For many homebuyers, a condo is an attractive option – less maintenance, better amenities, and often lower sale prices. However, there are certain things you should be aware of when buying a condo.
1. HOW STRONG IS THE HOA?
Every condo complex has a homeowners association that manages HOA dues and enforces the rules of the complex. Some HOAs are stronger than others – managing the complex’s funds properly and enforcing rules to ensure happy residents. Reading the HOA agreement is incredibly important so you understand what HOA fees cover and what the rules of the complex is – this is particularly important if you have pets. Also, understand what circumstances would require a “special assessment” – a temporary increase in HOA fees or an additional payment. Special assessments typically cover big ticket common area or structural repairs. A strong HOA with good money management will ensure that emergency funds are available to help ease the burden of a special assessments.
2. RESEARCH THE BUILDER AND MAINTENANCE COMPANIES
New condo complexes are popping up in many metro areas. While a brand new building may be attractive, some builders have a reputation for using cheap materials or shoddy building. Ask your realtor if they know anything about the builder and check online sources for builder reviews.
In addition to the builder, ask the HOA about the maintenance and repair companies. Research these companies to ensure quality, licensing, and pricing. These are companies your fees will go towards if you decide to buy in that complex.
3. ASK CURRENT RESIDENTS ABOUT THEIR EXPERIENCE LIVING THERE
Don’t just rely on your realtor or the seller for their opinion on the complex. When you visit a potential complex, take a walk around and see if you can have a quick chat with current residents. Tell them you are considering buying one of the units and wanted to know what they like and what needs improvement in the complex. The current residents can give you great insight into the complex.
4. PERCENTAGE OF PERMANENT RESIDENTS
Condo complexes often restrict the number of rental units they allow, because complexes with many renters often have lower resale value. Also, some mortgage companies may require a certain percentage of permanent residents. However, this is also important to know if you plan to use your condo as an income property. Make sure to read the HOA bylaws so you understand if you’re allowed to rent or if there will be a large percentage of renters in the complex.
5. INSPECT COMMON AREAS
Even for condo sales, mortgage companies require an inspection. While the condo may check out fine, ask your inspector to check the community grounds – roofs, foundations, pools, etc. It will help you get an idea of how well the complex is maintained and may tip you off to any major repairs that may require a future special assessment.