Before discussing the pros and cons of living and investing in a condo, it’s important to know the steps that are involved in such process. Not only can you ask for help from our How to Buy a Home associates, but you can also check out our mortgage calculator to see if you’re financially ready to invest in a condo.
Condos often include monthly fees for maintenance and operation costs of the entire property, so when investing, take these costs into consideration. If you are buying the condo, you will also be responsible for its property taxes and insurance. Your realtor can help you research these costs to make sure that you’re adequately informed of them. They can make sure these costs are included in your budget when you are making your decision.
Lastly, and perhaps more importantly, are utility costs. Utility costs are sneaky, and many homebuyers forget about them when budgeting! When looking to invest, turn to our realtors at How to Buy a Home. They can help you make sure that you know what costs are included in your condo fees. More often than not, water and heat are included, but it is up to you to pay for electricity. Your realtor can help you explore these contracts and help you decide what’s best for you. Therefore, it is vital to understand condos are a package deal, and at times, they don’t include all your needs. To summarize, when buying a condo, take into consideration these factors to calculate what you can afford and what meets your expectations:
When deciding where you’re going to live next, it is important to consider all options and what they have to offer. If you happen to be a “all-in-one” type of individual, then a condo (sometimes referred to as condominium) may be for you! A condominium can be anything from a townhouse to an apartment- and can be a great investment. When looking to buy or even rent a condo, one of the most important things to take into consideration is the management team that takes care of it. Aside from this, another vital thing to take into consideration is the amenities the condo may offer. Make a list of what your priorities are and what you want in your future condo: Is it a gym, a pool, a community patio for socializing or all of the above?
Whatever your preferences may be, it is important to keep these in mind when you search for condos:
Down Payment
Mortgage
HOA Fees
Property Tax
Utilities
Possible future special assessments
Interior Condo Upkeep
Like everything in life, there are pros and cons to buying a condo. The major pros of investing in a condo are maintained maintenance of the area, great perks like luxury pools, tennis courts, and gyms, a move-in ready environment, and a close-knit community (if that’s what you wish for). It is important to note that these pros are highlighted when the condominium has a great management team, so make sure that residents in the area approve of the management! In fact, talking to residents of the property can be a great way of seeing if this is the investment for you. This can be key to identifying a good condo investment. However, if you’re looking for maximum personalization, a condo might not be for you. Homeowners Associations (HOA) often regulate what can be done to a condo, and this might limit your expression in terms of your future home. Aside from this, it is common for builders of properties to underestimate the cost of maintaining a building, leading to an underestimation of HOA fees. For this reason, many condo owners see HOA costs rise as the years go on. However, if you have a good realtor by your side, they’ll be able to help you determine if this is the case.
As stated above, management is key to a condominium investment. Condos have a Board of Directors and are almost always managed by a professional manager. The Board of Directors make sure the property is being adequately managed and maintained. Yet, like all things in life, there are times when the Board does not have enough money in the condo’s reserve accounts to pay for the repairs the property needs. If this occurs, the Board will look at the homeowners to pay for the repairs. This occurs in addition to the HOA fees and is done through a “Special Resolution.” If this resolution passes, all homeowners must pay whatever is necessary for the repairs to take place. This process is usually called a “cash call,” and it can be a tricky process to manage. But yet again, your realtor should be there to help you. An investment is one for a lifetime, so turn to your realtor and ask the tough questions! Make sure to ask if any new cash calls are being taken into consideration before you invest.
To make sure what you’re signing is within your budget and it does not any specific clauses you’re unaware of, having a lawyer review condo documents is essential. A lawyer can help you review the corporation’s operating budgets, financial statements, and status certificate. The status certificate includes information about the corporation’s insurance, reserve fund, and overall management contract. A lawyer can help you make sure a corporation has all the things necessary in place for the protection of your home, as well as your finances. Our How to Buy a Home team is here to help you understand how to manage the housing market. Reach out to us if you have any questions or concerns, and we can help you find your ideal condo!
