How Do You Know if A Condo Is Right for You?
Condominiums provide an alternative to the more traditional standalone single-family home. Their appeal includes such things as:
- A potentially lower price
- Little to no outdoor maintenance
- A community rather than a neighborhood, which may act similarly to a “Neighborhood Watch”
How Does A Condo Differ From A Traditional Single-Family Home?
- In an apartment styled building, each occupant owns their own unit, rather than an entire building.
- Common areas are shared with other occupants, including the costs to maintain these shared areas.
- There may be features not available to a single-family homeowner, such as an elevator, clubhouse, or pool.
What Are The Pros & Cons of Condo Living?
- If you’d like to be a snowbird, or you travel extensively, maintenance of the exterior is built-in. The owner is not responsible for snow clearing or lawn mowing.
- Exterior repairs are covered by the condominium association; thus, if the building requires exterior paint, you are not responsible for this maintenance.
- There are no “rent” increases – you own your unit.
- Association fees are frequently less than monthly rent in an apartment complex.
- Locations, style of unit, and amenities vary, and often include items a single-family home does not, such as those mentioned above, as well as amenities one may find in an executive style apartment complex, such as a fitness center.
- Since you own your unit, you’re building equity, not just handing over money to a landlord.
- Changes to the interior of your unit are up to you, not a landlord.
- A community feel, providing a more “Neighborhood Watch” feeling of security.
- As part of an association, each owner has a voice in the operations of the association, such as what items are covered by your dues.
- Since the by-laws and association rules apply to all occupants, there may be restrictions not found in single-family standalone home ownership, such as an exclusion on pets.
- Since a unit shares walls with other units, there may be the feeling of less privacy (noise).
- If you do not take full advantage of the amenities offered, a portion of your dues may feel like a miss-use of money.
What Items Are Typically Included in Association Fees?
These vary by the
association. Regardless of what is or is
not included, you will be responsible for a pro-rata share of expenses dubbed “common
element fees”. These are detailed
in the condo declaration. They may not
be equally applied if unit sizes vary. Any of the amenities listeded, as well as
exterior maintenance of the structure, and any shared spaces inside the
building, such as hallways or elevators, would be covered by these fees, which
are typically collected monthly from each owner by the association. Typically, the more amenities and services
provided, the higher the fees.
How Are Unexpected Costs Covered?
Generally, each association will have an account set aside that a portion of the collected fees are held in for unexpected costs, such as a roof repair. This type of account is generally started by the condominium’s developer and is transferred to the association once the development is complete. This account then becomes an asset of the association and each year the unit owners decide how much funding should be collected or maintained in the account. Each occupant contributes to this account; however, the account is not “owned” by the individual owner-occupant of the units.
What Should You Know Before Purchase?
- How does the unit’s price compare with similar units in the market?
- How do the amenities compare with similar units in the market?
- What are the units’ resale track records like?
- Have the units appreciated or depreciated over time?
Are Condos More Secure Than Traditional Homes?
Since security varies by development, just like amenities, be sure to learn…
- The type of doors and locks are available in the unit.
- The type of parking available: secured by a gate; a garage; or open surface parking.
- Are there intercoms to allow communication with visitors before they approach your unit door?
- What type of common area lighting is provided, not only within buildings, but in open parking areas, near exits and entrances, in and around the grounds, and near garages.
- How are balconies accessed?
- Are mailboxes secured inside the building using a key system?
- Are the units wired for home security systems?
- What are the local area crime rates/statistics for the neighborhood, as well as that specific development?
For Specific Amenities, Be Certain To Learn…
- Which amenities are included in the association fees, and which have additional charges (such as use of a clubhouse, for instance).
- What are the monthly fees? How often, and by how much, are they increased?
- Are any of the offered amenities exclusive to certain owners?
When Evaluating Parking Arrangements, Learn…
- If enclosed parking (such as a garage or carport) is included in the condominium unit purchase. If not, how are they assigned (if they are considered common area property)?
- What parking is required and what is available as an option?
- What storage is required and what is available as an option?
- Are there additional parking and storage areas available to the minimum required? What, if any, are the additional charges?
- Where will visitors park?
Unit Type & Style.
- How are the units laid-out?
- Are the rooms adequate for your personal furnishings?
- Are there any exterior alterations allowed by individual unit owners?
- Are any of the units rented, or are all occupants owners?
- If rentals are allowed, what are the requirements to rent your unit to another party?
- Who manages the property?
- Does the facility appear well maintained?
How Does The Association Restrict Owners?
- Prior to purchase, ask to see the rules.
- Are there restrictions on children or pets? If yes, what are they?
- Are there limits on visitors? If so, what are they?
- Are there limits on how often common amenities are available for use (such as a clubhouse)?
- Are there restrictions on when one may move in or out (days of the week, weekends only, etc.)
What Will You Pay Monthly?
- How are special assessments handled? Will there be any in the near future?
- Are there currently any special assessments for which owners will be responsible?
- Are any of the utilities common? Which utilities are individually metered?
- How much have property taxes run historically?
- Is separate insurance required/needed?
- Read minutes from the past two years of board meetings, and be sure to review the association’s budget for the same period.
- If there are expansion or infrastructure changes planned, what are the estimated costs and who/how will they be funded?
If The Development Is New, Be Sure To Learn…
- The developer’s reputation.
- Costs involved in establishing the reserve account.
- Landscaping plans and costs.
- Whether there is a homeowner’s warranty, the term, and what is or is not covered.
- Will the units be pre-wired for communications (such as cable TV and internet) and who handles the cost (developer or owner)?
- Has a budget been established for the association? If yes, review it.
We welcome the opportunity to partner with you. To learn more about Integrity Real Estate Services and our core principles, select “Sustain”, “Contribute” and “Inspire”.
We look forward to hearing from you.