5 Questions to Ask Before You Buy a Condo
Buying a condo can give you the best part of home ownership without all the pesky upkeep eating into your leisure time. Although a condo can seem like an excellent choice regardless of whether you’re buying a first home or looking to downsize, buying the wrong condo can quickly become a nightmare. Before you make any down payments, be sure to familiarize yourself with the five questions to ask before you buy a condo.
How much are condo association fees?
Unlike living in an apartment where the rent you pay is all that’s expected, owning a condo comes with more financial obligations than just the cost of your mortgage. In most cases, your condo will have a homeowners association or condo association that requires a monthly fee. While this typically goes to general maintenance on the building and common areas, as well as funding the repair fund, it may also include certain utilities.
In addition to asking how much your monthly dues will be, always make sure you know exactly what you’re getting in exchange for this extra cost. For instance, a condo complex that comes with a pool, tennis courts and state-of-the-art fitness center may require you to pay an additional fee for use of these facilities.
Bottom line: Never assume; always get what the condo association provides in writing prior to making an offer.
How stringent are the rules?
The best way to answer this question is to get a copy of the bylaws and read every word. This can help you find out whether certain things are allowed, such as:
- Hardwood floors
- Home theater systems
- Renovations within the unit.
While some of these may seem like no-brainers, anything that contributes to the noise level—and may possibly disrupt neighbors—could be a no-no. Even relatively small grills placed on your balcony can represent a fire a hazard.
As far as pets, be sure you specify exactly what kind of pet you want before you assume it’s allowed. Having a 50-gallon aquarium could create a water hazard for the people below you if it were ever to break. Similarly, the condo association may have a strict size or breed limit on dogs allowed on property.
Bottom line: If reading the bylaws doesn’t answer all your questions, ask.
Is there adequate storage and parking?
Unless your condo has a townhome layout, it’s unlikely your unit will come with an attached garage. This makes it critical to find out whether you’ll have assigned parking or if it’s first-come, first served. Now is also a good time to find out whether the condo you’re interested in has adequate parking space for any guests who may visit.
Much like an apartment, condos are notorious for not having much interior storage space. If you have recreational equipment and individual garages aren’t available, find out what, if any, additional storage space the condo provides to residents.
Bottom line: Even if the condo and amenities are just what you’re looking for, having inadequate storage or a daily fight for parking can make living there much less desirable over time.
What’s it like living here?
Before you take the plunge, make sure you visit the condo complex on different days and times to ensure you’re getting the atmosphere you really want. It’s also a good idea to talk to existing residents about what it’s like living there, as well as whether they rent or own their unit. In some cases, a condo complex with a high ratio of renters will make it impossible to obtain a mortgage.
Now is also a good time to learn how the condo association handles disputes and requests. Whenever possible, obtain a copy of the minutes for the last few condo board meetings. Do you like what you see? Are issues handled fairly and in a timely manner?
It’s also important to understand what the ratio of renters to homeowners is, assuming the condo association even allows rentals. While this may seem like a relatively small thing as long as the renters treat the property as through they were owners, it can make a big difference to your mortgage lender. In some cases, having a high ratio of renters to owners can mean being unable to secure financing for the unit.
Bottom line: An ineffectual condo board could make it impossible to lead the lifestyle you want.
When do I foresee moving again?
Finally, take a good look at your stage in life. If you can see this condo working for your family for at least the next five years, you’re probably in good shape. If, however, having a baby, making a job change or retiring are on the horizon, you may find yourself ready to move before the five-year mark. Since condos aren’t known for quick appreciation, this could mean taking a hit if you need to sell your condo before the five years are up.
Bottom line: Buying a condo, just like buying a house, is a long-term financial investment. If you have any reason to believe it won’t be a good fit for your needs within the foreseeable future, now may not be the best time to make the move.
Additional information to obtain
Although answering the five major questions above will go a long way toward helping you make your decision, there is some additional infomation that can help you ensure condo ownership doesn’t quickly spiral beyond affordability, including:
- Are any special assessments pending and, if so, will the seller cover these?
- How much is currently in the reserve fund for condo repairs?
- How recently have major systems/structures been updated (electric, plumbing, roofing, etc)?
Remember, while you may be able to live with rules that forbid you from renting out your condo in the event that your situation changes, you may find living in a building that will need a plumbing or electrical overhaul in the next few years unacceptable.