Buying a condo apartment can be a great solution for people who don’t want to deal with the hassle of maintaining a whole house or simply don’t want to spend their entire life’s savings on a property. When you own a condo, you don’t only own the apartment unit you live in, but you also have an ownership stake in the amenities and other common areas of the condominium. These common areas, which may include gyms, pools, parks, or playgrounds, are usually maintained by a property management company that is hired by the condo’s association. The condo association includes a governing board that sets rules in place and collects fees in order to manage the condominium and its residents.
If you have lived in a house until now and are considering purchasing a condo, you should know a few things related to condo living and how that may affect your lifestyle and your budget. Below are 5 tips in buying a condo apartment that will not only help you have a better understanding of how condos work but will also enable you to compare between different condos.
1. Consider the change in lifestyle
As we mentioned earlier, condos are a more affordable option for homeowners compared to purchasing a house. According to the National Realtors Association, the median price of a condo is 20% cheaper than the median price of single-family homes. However, this price comes at a cost. Condos usually have less living space than a single-family home. Moreover, you don’t have access to things such as your own backyard or porch.
Although, it is not all bad news. Condos can also provide owners with a variety of amenities that they may have otherwise not had access to. For example, not every house has its own pool. If it does, the price will definitely be heftier. By owning a condo, you get access to a number of amenities and don’t even have to worry about maintaining them.
Lastly, living in a condo means that you will be sharing wood paneled walls with your neighbors. This can make for less privacy and more potential room for conflict. However, if you are someone who enjoys socializing, then living closer to your neighbors may not be the worst thing after all.
2. Work with an experienced realtor
A real estate agent with experience in condo purchases can not only make you more aware of different aspects of the condo you are considering, but also help you in comparing your options and negotiating. When looking into a condo, you not only have to consider its price and look but also things such as the building’s management, HOA rules, and fees, whether there are any upcoming developments. A real estate agent can ask for these documents and carefully review them to warn you if there is anything you should be cautious of. For example, if the condo association running the building has any special assessments that the residents are expected to pay for, then you may change your decision on the condo.
A real estate agent can help you compare a specific condo to what else is available on the market. What are other similar condos selling for and what do they have to offer? The research work behind a real estate agent’s expertise can make a difference in whether you purchase a place or not. They can also help you know what financing is available for the condo of your choice. For example, if you are looking to take out an FHA loan, you should know that the condo chosen must be on the list of properties approved by FHA.
3. Ask about the condo association fees
In order for the condo association to manage the building and provide services such as maintaining amenities, it has to be funded somehow. These funds come from the condo owners in the form of periodic fees charged by and paid to the condo association. Depending on what expenses they cover, association fees can go up to hundreds of dollars. It is important to ask what the fees are and how often they are adjusted in order to forecast how they are going to affect your budget in the long run. Moreover, you must be clear on what is included in the fees you pay. Will you have to pay extra to use any parts of the amenities?
The fees collected that do not go towards paying for maintaining the building or any special projects undertaken are saved in a community reserve fund. This money is used when huge repairs need to be made in the condominium.
4. Know the rules of the association
The condo association sets rules in place in order to maintain order in the community. While these rules serve to make this type of living arrangement more peaceful and help clear out any conflicts, some people may find the rules too dictating. Rules can cover anything from the types of pets that you are allowed to keep in your unit and quiet hours to not being able to rent out your unit at all. This last point is very important especially if you are planning to make some extra income by renting out the condo for some time or the whole year. Therefore, it is very important to research the rules in place and decide whether you will be able to live under those rules.
5. Research the property management firm
While the condo association is the one that manages the condominium, the board typically hires a property management firm to take over the actual work of maintaining the property. A tour around the building can give you a rough idea of its maintenance, however, some issues are not that easy to detect. For example, if there are constant problems with the electrical system then without a home inspection, you won’t be able to reveal this problem until you live in the place. It is a good idea to research the reputation of the firm beforehand, to know what to expect if you do purchase the condo apartment along with fruits and plants.
In conclusion, living in a condo is very different from living in a single-family home. On one hand, being a condo owner means you do not have to worry about maintaining a whole house and its cheaper price means the mortgage payment won’t take as much away from your monthly income. However, it also means giving up on some of your freedoms and having to learn to live by rules that apply to an entire community. Depending on what aspects of owning a property you consider most important, you can decide whether purchasing a condo or not is the right decision for you.