Thinking of Buying a Condo? 5 Questions You Need Answers To
For many people, condo life is where it’s at. You get your own place, maybe some amenities like a pool or fitness center—all without the maintenance of grass cutting, landscaping and snow blowing.
If you’re in the market for a condo, there are five key questions you’ll want answers to before you sign the offer to make sure you’re making a decision that works for you now and in the future.
1. How much are condo fees, and what do they cover?
Monthly condo association fees can add quite a bit to your monthly housing costs. Understand prices today, but also ask how often rates are reviewed and increased.
Also find out what the fees will cover. In some cases, your heating/cooling and trash may be taken care of, while in other cases the fees could also cover cable and internet.
2. How does the condo board make decisions?
Some condominiums are professionally managed, and others are run by the homeowners association (HOA). Find out who makes the decisions and how they are made. There could be financial impacts—for example, if the board decides everyone needs a new $1,000 front door.
3. What percentage of the condo units are owner occupied versus rented?
Banks will evaluate the percentage of rental units when determining if they will give you a mortgage. Higher renting percentage is seen as more risky to banks because if owners default on loans or condo fees, those are passed on to the remaining units.
Second, if you are considering renting your condo in the future, you want to make sure the association allows it.
4. Does the HOA have reserves for special assessments?
The financial strength of an association can be evaluated through the reserves on hand. You want to make sure the association is properly managing the fund to avoid major expenses in the future. The older the units, the more reserve they should have.
5. Who fixes what?
A big mistake people often make is assuming repairs are covered by the association. However, that’s not always the case. Windows, porches and balconies are often areas that are commonly misunderstood. The key is to understand who “owns” what pieces to determine who will be responsible.
Condo living can be great, but there are more considerations to it than buying your own home. Use this list and do some investigating before you sign the offer to make sure you’re buying into a community that is right for you.