This is part two of my little analysis of what you might want to consider when deciding between a house and a condo. So, let’s get right in to it.
1. Gated security may be just what you’re looking for right now.
Perhaps you are living alone. Perhaps you like to know that there are people right next door. These are all legitimate concerns that condominiums (at least the good ones) seek to address.
- How careful is the management company with the common area keys or codes?
- Is the common are well-lit?
- Is the HOA paying for any live security? If so, how much does that impact the monthly assessments?
- When you look at the condo, does it look like the other condo dwellers take security seriously?
2. Condos are often close to public transportation (the car-free life!)
One of the best things about urban dwelling is that you can leave that car in the garage, or just go without it completely.
- Some condos used to be apartment buildings and the parking may not always protect your car from the sun and weather while you are taking the light rail to work every day.
- The closer your condominium is to public transportation, the more likely that your condo will eventually sell for more.
- If you are thinking of the car-free lifestyle, also consider whether amenities such as groceries, the dry cleaners, and coffee shops are near-by.
3. Condos maintain all the goodies: pools, landscaping, general maintenance.
Especially on those hot summer days, it’s a great relief not to have to maintain your own landscaping, or pay somebody else to do it. This is especially helpful if the condo has a pool. Maintaining a pool at a detached residence house can cost thousands every year, and you may not even use it 10% of the time!
Some things to ask yourself before you buy a condominium**:
- Is the current HOA solvent? Do they have enough to properly maintain all of the features they promise when you buy?
- Who manages the property? Many HOA’s pay a management company to take care of details such as landscaping contracts and maintenance.
- How long has that company been working? How many properties do they maintain? What do the current residents think of their work?
** You can have a chance to ask these questions during the inspection period.
4. What is an assessment and what is expected of you in an HOA?
An assessment is a monthly fee on every unit in condo that goes in to a pot to pay to keep the place up. If you don’t pay your assessments, the HOA can record a lien against your property. If you have a lien against your property, you can’t finalize the sale of your condo to another person without paying off that lien.
The more units vacant in a condominium, the harder it is for the HOA to pay the bills.
Also, if there are outstanding big projects or maintenance issues on the condominium, or if the HOA board is not wise with its money (your money!), your assessment might go up every month.
Learn what you can about the HOA board, before you purchase a condominium.
5. What is a CC&R?
CC&R means “Covenants, Conditions, and Restrictions”. It means, basically, that all of the people in a Home Owner’s Association agree that their property came with (and will go with, in the future) certain conditions and restrictions.
In other words, condo owners can’t just do anything they want with their condo.
CC&R’s outline everything from how often the board meets, to what is considered common property.
When you buy a condominium, inspecting the CC&R before your purchase is just as important as inspecting the condo’s wiring!
If you are part of an HOA, read what is expected of you in the CC&R’s. The best way to protect your investment is to stay involved in the HOA.
6. Condos can be a rental investment.
Let’s say you live there for a few years and decide that you want me to help you find a house so you can rent your condo as a long-term investment.
Some HOA’s only allow a certain percentage of its owners to rent at any given time. Some say nothing about it at all. Be certain you look for that if you think this may be a possibility for you at any time in the future.
7. Other benefits in favor of a condo.
- Condo’s can be a great, low-cost alternative to a house, especially if you are just starting out. Many people continue to rent when they can own, giving away equity to a landlord.
- If you think you will live there for even the next two years, it still may be worth buying a condo.
- It’s like living rent-free for that time while you benefit from tax credits for interest on your mortgage!
- Condo’s are also a great stepping stone investment. Start there, pick up another one as a rental property in the future!
- Be involved in the HOA in order to protect your investment.
- Take the time to meet others who live in the condominium. You will learn a lot by just asking “How do you like living here?”8. HOA (the quasi-condo)
You can have your own yard and privacy, but trust the HOA to handle a lot of the community maintenance. Be aware, also, that gated communities may have restrictions that you not expect in a typical neighborhood.
They can restrict political signs (within reason) and sometimes even restrict the number of vehicles that you keep at your house.
Always read the CC&R’s!